How to budget for your office move
Budgeting thoroughly is one of the most fundamental processes underpinning an effective and successful office relocation.
If you can budget properly, with precision and visibility on all the key areas then you will go a long way towards creating the conditions for a smooth transition – failing to do so, on the other hand, can be seriously problematic.
Here’s our look at how to map out the financial side of moving offices and a rundown of the most likely areas of expense.
Occupancy costs Vs capital expenditure
Perhaps the most important distinction to draw from a financial perspective in the context of an office space move is between occupancy costs and capital outlays. The difference is essentially between those expenses which will be ongoing and those which will be one off outlays that are only necessary as you make your office space switch.
So, what are the ongoing occupancy costs you will need to cover once you’re settled in at your new office? They could include payments relating to:
- Service charges
- Business rates
- Building insurance
And what might the one off capital outlays be? They could certainly include expenses allocated towards:
- A new business phone system
- A fit-out or refurbishment
- Installation of IT equipment
- New furniture, including desks and chairs
- Stamp duty land tax
- A rental deposit
Targets and expectations
When you’re budgeting for an office space switch it is well worth trying to gain the greatest possible degree of clarity on what expenses are likely to need covering and what your budgets are as you embark on the process.
However, budgeting in these scenarios is not an exact science, so the aim will generally be to ensure that all your necessary expenditures do not radically exceed your expectations of them.
To put it another way, the aim should be to ensure that there is relatively little divergence between your budgetary targets and your actual expenditures – in the context of both ongoing expenses and one off outlays.
TIP – It can be helpful to lay out your budget plan in a spreadsheet with three columns headed ‘budget target’, ‘actual cost’ and ‘difference’. From there your goals and your outcomes will be clearly visible and you can further divide these elements into ‘occupancy costs’ and ‘capital expenditure’.
In addition to the types of costs already outlined, there are various other likely expenditures that anyone moving offices ought to consider and take full account of at the planning stage.
This may include:
- Property agent and legal advisory fees
- Costs associated with removals and clean up/exit from your old offices
- Marketing spend linked to your relocation
- Payments to cover excess storage facilities
TIP – It can be important and certainly worthwhile to secure a number of quotes from different office relocation specialists to get the best possible deal on whatever services you need.
Moving offices can result in a degree of reshuffling within an organisation’s workforce. This can involve a certain number of redundancies or turnover among your staff, which can in turn lead to extra hiring and training costs that should be accounted for as precisely as possible in advance.
Switching to a new office location may also lead to a higher-than-normal reliance on travel expenses among your employees. This may well settle down later down the line but if you know there will be more expense claims to cover during your transition then it is important to be aware of that.
One final point to consider is whether your office transition will cost your company a certain amount of revenue in the near term. If this is the case then this needs to be factored into your budgetary estimates at the earliest possible stage.
Getting what clarity you need
The key to effective financial management in any situation is transparency and a successful budgeting process in the context of an office move has to take account of as much detail on potential outgoings as possible. The more clarity you can establish on all the various issues involved the better equipped you’ll be to avoid problems or to deal with them confidently as and when they arise.