There are many reasons why you may want to relocate your business. Your business may be in a building in which the rent is too expensive or the management does not adequately maintain the property, or, you might be looking for a better area that services faster broadband. (you can find a broadband connection comparison right here.). You may decide that another area of town would bring more traffic and clients in your doors. Alternatively, you may decide for personal or business reasons to move your office to an entirely new city or state.
Relocating a business could result in loss of clients or employees who do not want to make the move to the new location. The farther the move, the more likely the chance business managers and owners face this challenge. As a result, business owners and managers should consider whether the benefits associated with a move outweigh the potential loss of valued clients and employees. How difficult will it be to replace these clients and employees in the new location? What are the potential financial gains and losses to the business?
Businesses may not be aware of all the potential tax changes that a relocation could trigger. Even a move across town could involve crossing city limits or county lines. Crossing over those lines could result in changes to business tax, locality tax, sales tax, and property tax. Business owners should consult with an accountant about the tax implications associated with even these local relocations. Relocating across state lines can also introduce changes in business and sales tax for both the business and its clients. Depending on the location, businesses may be required to pay tax on commercial leases. Pay close attention to all of the potential tax changes and how they can impact net income.
Finally, consider not only the additional income that may be generated in the new location but also the costs of relocating and doing business there. How do real estate costs compare to your current location? How much will it cost not only to physically relocate but also to inform clients and create innovative marketing materials? What time and cost will managers incur in hiring and training new employees? Are the required costs of salaries and benefits different in the new location? Will the company be paying any relocation costs for current employees? An accountant can help you estimate and prepare for these additional expenses.
Relocating your business to a new location can bring many new, exciting opportunities for growth. In all of the excitement, however, do not lose sight of the need to prepare for all possible expenses and changes that will impact the business. An accountant can help identify potential costs and tax implications that will impact your business as well as help minimize the impact on your business finances and tax bill after the relocation.