Whether to Move the Shop

Relocating to a different shop space can involve complicated pros and cons, including commute times, neighbor relations, marketing implications, and more. November 29, 2014

Question (WOODWEB Member) :
We're quickly outgrowing our little 1,100 square foot custom cabinet shop and the lease is up in March. My main goal is to minimize my commute, as traffic here is the root of much of my stress. So I've considered some spaces that are closer to home, but further from the bulk of my clients. I've also considered leaving the Bay Area entirely for less expensive space and a better pace of life beyond the suburbs. Most of my clients are contractors and they probably don't care where I am as long as the price, product and service are good. I currently have one employee, and if the good business continues I'll have one-two more soon. What did you consider when locating your shop?

Forum Responses
(Business and Management Forum)
From contributor C:
I just relocated from Tiburon to San Rafael and I have to say that having contractors, designers and homeowners stop by the shop is a valuable experience. If you work in the boondocks (say Cotati or so) my suspicion is that being the lowest bidder is what will get you the job if you have no solid connections. If you do have solid connections it doesn't matter where you are.

From Contributor W:
I have moved 4 times in 28 years and learned to use it as a growing experience. Better shop setups corrected electrical and support setups, etc. I always set up a new shop and moved with new start work, never in-process work. Planned well it can be a real step up. Location for me is more about employees than clients. If I move too far away from places to lunch, ease of just doing the things one has to do, and general commute problems I could have problems.

From contributor E:
Wood shops in Tiburon? The rent must be a nightmare, but the clients aren't short of cash either. Contributor C it's funny that you should be in the North Bay, we are strongly considering the 101 corridor between Santa Rosa and Novato. Do you have any comments in particular about that area?

From contributor F:
It is important to work out any details regarding signage in advance. I had planned to have roadside signage however I had later found out that the industrial parks existing sign was in violation of the towns road setback and that the situation would too complicated for the landlord to work out with the association. In regards to convenience vs low rent, you need to decide if your time is worth more than potential savings on rent. If you are billing out all of your time consistently, then I may strongly consider convenience.

Given a hypothetical addition to commute times of 45 minutes two times per day we are talking about 7.5 hours per week. Could you use that extra time to make more money? If you are getting ready to hire additional help it sounds like you could. Maybe on the flip side the cost difference with rent is so high that you would be better off commuting further.

Also, get to know the neighbors! I can't stress this enough. Talk to them, and explain what you are planning on doing. Red flags are existing disputes/tensions past lawsuits, etc. especially within associations. Make sure you will be welcome. I know a business owner personally that just went through a lawsuit from two other tenants that decided they didnít like what he was doing.

Ninety five percent of the case against him had no merit and was frivolous, aside from some minor leverage they had. After this dragged on for a year, my friend came out on the winning side, in mediation, but only after spending $30k plus on legal fees. He chose to pay out of pocket, rather than risk higher insurance premiums.

Some additional words of wisdom:

1. Finding a space already setup as a wood shop is a challenge. Even if you do you will need to reconfigure electrical, and other mechanical systems, dust collection to meet your needs. A couple of days of electrical work can quickly add up. Think about all you have spent on your current shop over the years. Add time spent configuring machines/dust collection.

2. You will need two times more space than you think.

3. It will take two times longer to move than you think.

4. Moving and setting up the new facility will cost two times as much even with careful planning.

Be very careful not to overreach financially. In other words, if things are working out now in a way that you need to grow you are in a good position, and probably better off than 90% of shops. Things might not be as bad as you think, with your current facility/operations as that is what got you to where you are. Make sure you have good cash reserves. Negotiate a sound lease, and remember that generic legal protections afforded to residential tenants often do not apply in commercial situations, as it is assumed persons involved in business will work such details out in the lease. This is your opportunity to get this part right.

Also make sure any improvements/repairs promised by the landlord are put in writing, and actually completed. When I moved into my shop initially the landlord had verbally agreed to have one of the door's re-keyed and of course five years later I am still waiting for that to happen. Lesson learned if it isn't in writing odds are the landlord will never get around to it, no matter how sincere they sound. Find out who will be managing/maintaining the prospective property on behalf of the landlord, and get to know them, and size them up well. I am currently leasing a unit in a building that the landlord does not maintain until well after something becomes a major problem. The red flags were obvious, but I was too inexperienced to see them. Next time around I plan to spend a bit more time getting to know the landlord and property manager.

From the original questioner:
Thank you for the very thorough and thoughtful response. 7.5 hours per week is enormous, especially because I'm stretched very thin between work and family. I could move the shop two miles away from my house with a 10% bump in square fee rate (which would be somewhat compensated by fuel savings). My current landlord can be a bit of a pill, but the property is very well maintained and they are by-the-book with the lease terms and legal stuff. "The devil you know" as they say.

I might have the option in the near future to add the identical space next door, which has some sizable benefits. I would not lose all the investment I have in the current space (several thousand in electrical, and countless hours in dust collection, air and other infrastructure). Not to mention the many days that would be consumed with dealing with change of address with vendors, utilities, government, and customers. The only real reasons I can find to leave our current area are the astronomical cost of living and the traffic. One dollar/square foot gross is a lot of money for industrial space, and $700k is twice as much as any decent three bedroom house should ever cost.