Solomon Bruce Consulting Blog

Monday, May 13, 2013

Suzie is Leaving--We are Moving-- We Reduce Overhead by 60%

     A business owner told us the other day that they were moving to a new location.  Now, this business owner had done all of the calculations that we have discussed on this blog previously and determined that moving made good economic and business sense.
       One of the major determining factors in the move was that Suzie was leaving for another opportunity.  Technology is such that the remaining staff members can pick up the workload that Suzie accomplished.  However, the business owner determined that by moving to a new location, she could save about 60% in overhead!  WOW--60% in overhead savings-- said another way, that would be a 60% increase in profitability or a 60% reduction in expense!
         This is the type of simple analysis that we suggest when a client is considering moving.  This particular business is not dependent upon foot traffic.  The location that the business is currently located is a premier location, in an upscale part of the community in which it is located.  However, the new location is also in a very trendy and growing neighborhood, about 3 miles away from the current location.  What is exciting is that the space in which the business is relocating to has been "re purposed" for offices and is a fun, funky and exciting location, located closer to the center of the business center.
          Suzie, the employee that is leaving the firm is receiving a wonderful new opportunity in the firm that she is going to.  Suzie's loss to the firm actually is beneficial to the firm because of the remaining staff as well as technology enhancements.  Would the owner have relocated the firm if Suzie was not leaving?  I don't know, however, I suspect that a 60% reduction in overhead would be very compelling.
         Have you looked at moving?  Does it make good economic sense?  If yes, then thinking about a relocation may make great business and economic sense.


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