Managing Property Businesses - Term Paper Example

A business is a system organised to provide goods and services to others who have needs; it transforms "inputs" into valued "outputs". Businesses canbe organised by: - function, into departments according to their role: Individuals, teams and line managers in sales, for example, can be grouped together and report to the head of department, the sales director - geographical area, - product - into departments, each of which focuses on a different product - project management - for example, a company that is divided by function takes a member of staff out of each department to form a temporary project team that will work on one specific task, (e.g. develop a new product); In today's dynamic business world, organisations are faced with increased competition and evolving business models. To remain competitive, organizations have to evaluate their strategies to make sure they align with business needs - both today and in the future. They need to deliver new business value and growth in the market through product innovation, more personalized customer service or transforming business processes They must be able to anticipate, rapidly respond and always be available. Organizations are looking to make better use of resources that they have, whether by saving a step in a business process or by improving linkages with their business partners. Organizations are looking to get more out of the resources they have in place so they can be freed up to generate additional opportunity. They want to reduce their operating costs so that they can invest in growth and opportunity. Relocation of a business can be defined as the movement from one location to another. The main reasons for changing location are: labor and work force issues, the desire to reach new markets, the need to upgrade facilities or equipment, the desire to lower costs or increase cash flow, and considerations about quality of life. The need for a suitable work force seems to be in the top of these reasons for relocation. For firms that need specialized employees, it may be well worth it to relocate to an area where these kinds of employees can be easily found. "Most businesses start in a small facility, such as the founder's garage, and then move to bigger quarters in the same city", says L. Clinton Hoch, director of location advisory services for DCG Corplan Consulting (a site selection consultancy in West Orange, New Jersey). Later, the business outgrows that location or begins to find fault with its facilities, services, utilities, infrastructure or other features. "Usually only after a business owner goes through those stages is he or she ready to make a move out of the original area," says L. Clinton Hoch. Relocating may be one of the best things that can be done for a business. Whether we are moving by choice or by necessity (our lease is up and our landlord is raising the rent), relocation is not an easy task. There are issues like location scouting, commercial realtors, negotiating, number crunching, licenses, packing, unpacking, mail forwarding. Where there is a change, be it strategic or geographic, there is inevitably a level of cost which can, in some instances, be significant. There may appear potential problems like lost employees, lost clients, lost productivity, and just plain lost time. But once the process of relocation done, business may benefit from the executed move: lowered costs, improved morale, a more robust pool of recruits, government incentives, closer proximity to suppliers. A great deal depends on what kind of business we operate and where we move to. A Small Business Administration's guide says that when we are thinking about relocating, the lease rate is not the only consideration. In order to realise this process we may follow a checklist like the one below, for we or our employees to be ready to work once the move is completed: we have to complete negotiations with future landlord, taking into account location, price, remodelling needs, space and electrical requirements; to negotiate release from current lease, if necessary; to contact the phone company to reserve new phone numbers or transfer existing ones; to prepare artwork for announcement letter, business cards, stationery and envelopes; to get change of address cards from the post office, or create your own; to make appointments with the utility companies for cut-offs and new hook-ups; to schedule phone installation; to design new office space, including use of old furniture or purchase of new furniture and also to discuss plans with employees and solicit their input; to establish criteria for purging files and throwing out old materials; to install custom wiring for telephone and computer networks; to inform current customers of the move, visiting some in person, where appropriate; to arrange for extra help to pack, clean and unpack; to arrange for extra help at home for family needs1. Finance issues of a business relocation process are: budget forecasting and tracking, finance of move and major procurement, funding of relocation - grants and capital allowances. A grant is a sum of money which is awarded to our business or organisation. Grants are often referred to as "free" money, although in reality, while you don't pay interest on a grant and as long as you meet the terms of the grant you don't have to return the money, the application process still takes considerable time and effort. Grants are issued by central and local governments, the EU and other organisations. Funding usually relates to a specific project. This may be relocation, the development of a new product or the investigation of a new export market, for example. Usually, the project must be demonstrated to be viable after a certain amount of time. The project plan must well defined, with clearly identified deliverables, a well-constructed business plan, being a very important part of the proposal. Grants are available for specific purposes. For example: export, relocation or investment in plant and machinery. A business shall be eligible for the grant only if the request matches the scope of the grant's intended purpose. "Deviation from this rule results in non eligibility". (Small Business Center) One of the conditions of a grant is that the purchaser will be required to contribute some of his own money. Grants normally cover between 15% and 50% of the cost of a venture. Specific measures (e.g. training) or beneficiaries (e.g. public bodies) may get as much as 75% - 100% of financing. Payment is often made according to a schedule. And even though you might have received the grant in principle, we may still need to make alternative arrangements to finance the project until the grant comes through.2 We must allow plenty of time for the application process and don't embark upon our project before our application has been agreed. Smaller, local schemes may be dealt with quickly, but more extensive applications for national funding can take several months. For European funding this may take even longer. The right premises in the right location can be the key to the success and growth of any company. The organisation may: consult with the business concern regarding the amount of space and other requirements needed at the new location; advise on cost and availability of suitable new premises and supply names of real estate brokers who may be able to assist the business concern with referrals; the right premises in the right location can be the key to the success and growth of any company. - inform the business concern of the availability of other programs and agencies providing guidance and financial assistance; assist the business concern with the documentation of its relocation claim. For example, the Economic Development Team of Riverside Business Park, in Irvine, have developed a wealth of knowledge on the local area and have nurtured relationships to ensure: - Rapid outcomes to planning applications and building warrants for incoming companies. - The availability of a property search service to identify the most suitable premises for the company's needs. - Close working relationships with the main property agents in the area to ensure lease negotiations are concluded quickly and successfully - A range of flexible lease deals for both public and private owned properties in the area. - The development of North Ayrshire Ventures Limited, a public/private partnership established to jointly fund further property provision in the area. (Source: North Ayrshire Council, Sites and Premises). While moving carries risks, a move can be one of the best things we do for our business. There are no guarantees in relocation, and as many things can go wrong with a move as can go right. Common mistakes include rushing the decision, focusing too narrowly on a few costs, failing to use available economic development services, ignoring quality-of-life factors, missing important environmental or regulatory concerns, and, believe it or not, failing to plan for future expansion. These mistakes can be boiled down to hurrying too much and trying to do a move too cheaply. According to psychologists relocation is among the most stressful events that can happen to a person, or a family. For many people the decision to relocate involves a complex set of variables of a financial, personal and emotional nature. These factors contribute to the stress in varying degrees, depending upon the individuals involved. The questions above can be broken down into two broad categories: objective and subjective. The emotional and personal aspects of relocation are subjective and thus difficult to model. Fortunately this is not true of the financial ramifications, which are easier to quantify. A relocation article from Mortgage Library says that an analysis based upon a superficial comparison of cost of living indices does little to reduce the significant stress associated with relocating; the analysis must be individualized to each family, because families have different financial profiles such as different incomes, house sizes, etc. Relocation can be a significant financial planning tool when relocating to a lower cost of living area, which can increase cash flow and provide significant lifetime benefits which will help employees achieve their financial goals. The same article says that a thorough analysis may not only reduce pre move stress by eliminating financial uncertainty but may increase post move happiness for all involved." Sources: www.Career Journal.com , Employer Center Small Business Encyclopedia, http://www.entrepreneur.com/sbe/terms/0,7548,325639,00.html Read More