When Commercial Space Is a Good Move

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I am contemplating moving my business from a home office to a commercial office space. What pros and cons should I weigh? Any tips on making the transition?

—D.B., Dallas

Once you've decided to take the plunge and move your home-based business to a commercial office space (see BusinessWeek.com, 1/22/07, "Home Office or Commercial Space?"), there are a number of decisions you'll have to make. First, where will you go and what facilities will you need?

Taking an office close to your home and your employees' homes is always a good bet, as it will cut down both on gas costs and on driving time. An office outside the home should provide a comfortable space—such as a conference room—where you can meet with customers and employees, particularly if one of your motivations for leaving home is to impress clients and appear more professional.

A real estate agent who works with business clients should be able to help you determine what square footage you will need. Space for a service business is usually easier to calculate than that needed for a company that produces a product, says Robin Lasher, a consultant with the Tarrant County College Small Business Development Center in Fort Worth.

An Eye Toward Growth

"A consultant may need no more than a small office with furnishings to create the desired image with clients, whereas a company that manufactures a product and has outgrown the garage may also outgrow commercial space sooner than expected," she notes. "However, even a service business that starts with 300 sq. ft. may find it a tight squeeze if an administrative assistant is hired."

So be cautious about the length of the lease you sign, Lasher advises, no matter how good a deal a landlord offers you on a long-term lease. "Try to negotiate a one-year lease with a one- or two-year option if you have any reservations about your move or whether the space will meet your future needs. If you're two years into a three-year lease with no immediate space available for expansion, you may have no choice but to stunt your growth until the lease expires, try to sublease your current location, or operate from two locations by leasing additional space elsewhere, which usually creates logistical problems," she says.

Jeffrey Landers, a serial entrepreneur and the owner of Offices2share.com, agrees. "The most common and often the most fatal mistake made by fledgling businesses is signing a multiyear lease which can require a financial obligation that may outlive the business itself," he says.

Call Your Lawyer

As long as you're looking for space, why not try to find an office location that has some prestige or local prominence? "Many prestigious office locations have some small spaces available as a result of dividing up larger spaces," notes Robert Donnelly, an entrepreneurial consultant and author.

"Negotiate for a reasonable rent," he adds. "You're doing the landlord a favor by taking a space that usually is not attractive to larger prospective tenants." It doesn't hurt to get your attorney involved in these negotiations. Commercial leases can be notoriously one-sided, and a savvy attorney should be able to help you get much better terms.

Once you've settled on a location, draw up a list of costs to include in your budget. You should include one-time costs associated with the move and the purchase of new furniture and equipment, as well as ongoing fixed costs, such as rent, insurance, and utilities. Will the building provide adequate parking for you and your employees? Make sure you include parking costs in your budget.

A final expense will be changing your business address to reflect your new location and revising all your marketing materials. Good luck!

Karen E. Klein is a Los Angeles-based writer who covers entrepreneurship and small-business issues.

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To People Who Want Your Own Business – But Don’t Know Where To Start

Getting Past Your Business Launch

Aries Spears Stand-Up Comedy

If starting a business were easy, everyone would do it. But they don’t. Only those of you who know deep down inside you're entrepreneurs at heart will ever take these steps--even if you’ve denied that entrepreneurial spirit burning inside you for a long time.

Using that burning desire to grow your business, however, is a far different task from simply lighting it. Most people start with the odds stacked so much against them that it’s difficult for them to fan the fire beyond the first few months or years. Here are a few pieces of advice I can offer to help you keep your new business growing in size and profit:

1. Hire people who are better at the job than you are. It’s a fact that companies are built by people, and the best people build the best and most profitable companies. Put simply, great employees may cost you 20 to 30 percent more in wages, but they can be twice as productive as mediocre employees. Invest in good people.

2. Place high urgency in everything you do. Always do everything you can today. When I started each of my businesses, I'd work constantly until I just had to go eat and sleep. Too many people treat their businesses as nine-to-five jobs. Never put something off until tomorrow if you can do it right now.

3. Get customers coming back. The road to profitability is through repeat business. Too few business owners set themselves up for long-term success. Your business grows when you add regular new customers on top of existing regular customers. Think of it this way: What if every customer you ever got stayed for life? How many regular buyers would you have?

4. Make decisions quickly. New companies don’t have the time or resources to stand still. General H. Norman Schwarzkopf once said to me, “When placed in command, take charge.” He also believes it’s better to make a decision and move than it is to stand still.

5. Deliver more than you promise. If you tell a customer it'll be three days, deliver in two. If you think it'll be two hours, say three hours and surprise them. This is the best form of marketing ever.

6. Price yourself for profit. Don’t ever be the cheapest. You're the little guy; you don’t have economies of scale. Big companies can make up in volume what they lack in margin. You can’t.

7. Never spend a dollar you don’t have to. You don’t need a new desk, you need a cheap desk. Too many new business owners go and buy the best stuff because they think image is important. Listen, when you get profitable, you can have a big mahogany desk. Right now, just get a desk.

8. Set a big vision.Start Small, Finish Big should be the title of your book. Don’t aim to be the best dog trainer in Montana--aim to be the best in the country. Remember, building a business is a 10-year plan, not a one-year plan.

9. Marketing is math. Don’t ever let an advertising sales rep teach you anything about marketing. Reps will say dumb things like, “Half your advertising works and half doesn’t--and you’ll never know which half.” Rubbish. If an ad that costs $100 makes you $100 back in profit, it’s a good ad. One other tip: Image advertising doesn’t make sense when you're not yet profitable.

10. Learn to sell. There's nothing worse than a business owner who isn’t willing to sell--or even learn to sell. No company makes money unless someone sells something, and you can’t just rely on people you hire to do the selling for you. If you want to grow a profitable business, you’ve got to learn sales yourself.

11. It’s simpler than you think. Before most people even go into business, they work it up to be far more complex than it really is. Business is very simple: Sell at a profit and keep at it. Overcomplicating the process won’t help anyone. If your business seems too complex, it probably is--so make it simple and watch yourself succeed.

Remember, you have a lot to learn--and that’s a good thing. You'll make mistakes. Just try to make them small ones at the start. Never bet the ranch on one deal.

---

Brad Sugars is Entrepreneur.com’s Startup Basics columnist and the founder of Action International, a business coaching franchise.

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Local Search Marketing For Local Business

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Small business is often local business covering a 50-mile radius. The global connection of e-commerce makes sense for Internet companies taking orders over a wide area. But for small business the Internet age has meant creating a brochure format website and forgetting the power of search engines. The majority of small businesses have left search engine marketing out of the web marketing mix.

Your Customers Are Searching Locally

Today, the change in search engine marketing and consumer behavior has created a great opportunity for small business to connect with customers locally. This local focus means the Internet is a viable method to market to local prospects.

Local search is defined as consumers using search engines such as Yahoo or Google to research and find goods and services in their local markets.

Just how many consumers search locally? A recent comScore Networks study found over 849 million searches were performed in the U.S.

during one month in the summer. The Kelsey Group estimates over 30 billion local searches annually will be conducted by 2009. Even more significant is almost 50% of local searchers visited a local business as a result of a search.

The Value of Local Search

How much can a local search be worth? In Dallas, local search in one month revealed by Overture resulted in 1250 local searches for the keyword Dallas flowers. With over half of local searchers visiting stores, the Dallas market for flowers (at an average sale of $50) would be worth over $30,000 per month in business.

5 Tips to Catch the Local Search Wave

Learn the Basics: Before embarking on a local search engine marketing campaign spend sometime becoming familiar with search. There are many sites and books to learn more. Your new understanding will go a long way whether you do it yourself or hire a professional to handle your search marketing.

Master the Big Three: The big three search engine players; Google, Yahoo, and MSN command over 70% of the local search market. Visit the local search section of these sites and submit your businesses to the add a business area.

Use the Little Guy: With the big three as the best place to focus your local search engine marketing efforts, smaller local search players can be a viable alternative. If you're competing in a competitive keyword field, the small local search engines can provide better search ranking and lower costs per clicks. Smaller local providers include Local.com and Truelocal.com.

It's All Yellow: Local search is more than just search engines. During pre-Internet days, we heavily relied on the Yellow Pages directory. Although, print usage has declined, web-based yellow pages have seen an increase in use. Include in your local search marketing campaign the added listing to YellowPages.com and Superpages.com.

Be Address Friendly: When the search engines go scouting the Internet for local websites, they scan pages featuring local addresses. Beyond just adding an address to your contact page, include your business address in key areas throughout your website.

The Internet is an ever changing medium. Any local small business can't afford to be left behind. Make sure your small business is on the local search engine wave.

Read more on About.com.

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