Real Estate

All companies still need a place from which to operate, to base their operations, to transact business, or to meet with employees and clients.  The size, shape, look, and locations of these spaces continue to change, and companies have finally begun to analyze the necessity for, and costs of real estate portfolios. 

 

 

Own or rent, terms of lease, number of locations, efficiency of layout, and more are critical decisions for companies planning to grow.  If not carefully planned, real estate can become a big black hole that absorbs a lot of capital without a corresponding return, and can divert attention and resources from where you create the most value in your business.  Prior to executing any form of strategic growth, factors to evaluate include:

 

  • Construction.  If it is determined necessary as part of a growth plan, whether new construction or remodeling of existing space, you should consider options regarding who will pay for associated costs, timing for completion, plans for contingencies (both cost and time), and who will oversee the work.  Opportunities for savings and efficiencies are possible with proper supervision and direction.
     

  • Facilities Management.  Whether one location or multiple, in one city or across the country, attention to uses, operation, and care of spaces increases in importance as companies grow.  It is easy to push this down the list of priorities, but lack of focus will not cause the problems to go away and ultimately will lead to diverting funds from their intended use.
     

  • Lease Negotiations.  Leasing real property can be a lower cost alternative for companies looking to expand rapidly.  Companies that already own real estate may wish to consider selling to monetize their investment, and then leasing the same space to retain control.  Finally, companies may find situations in which it makes sense to extricate themselves from a lease in a cost effective manner to focus on more profitable locations.  In all scenarios, limitations on costs, control over use, and flexibility of exiting leases will need to be negotiated.
     

  • Office Location and Design.  How, where, and when people work has drastically changed the uses for traditional office spaces.  Prior to growing, much consideration will need to be given to proper workspace design which can increase productivity and job satisfaction, while decreasing operating costs.
     

  • Prototype Development.  Rapid growth can be facilitated by taking processes and creating simple steps that can be easily repeated.  When trying to gain an edge, time to market can be critical.  Designing a standard model that can be replicated, without having to create something new each time, can save costs and allow for the opportunity to generate revenue faster.
     

  • Site Selection.  It does not matter if for client meetings, administrative operations, or a warehouse, selecting the best location can provide you one advantage which no competitor will be able to overcome.  Many considerations come into play when selecting the perfect locale.  When growing, these criteria must be clear and understood, with plenty of lead time to identify and prepare.