Moving Offices

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#1
TaxCut  
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So my lease is coming up for renewal fast. Am not crazy about the new terms so I'm thinking of moving to a new office.

I've been at my current location for 3 years and have way more space than I need. It's just me and my office manager and I don't plan on expanding.

I'm currently in a first-level suite. The office I'm considering is 1 mile away in a 2nd level suite with an elevator for 1/3 of what I'm paying now. Quite a savings.

75% of the clients I have, I acquired within the last 3 years from a former preparer. I guess you can say they are relatively new.

Have any of you noticed a significant decline in clients after making a move? My office manager thinks it's too soon for a move.

What say you?
 

#2
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Can you negotiate with your current landlord? (Although 1/3 is hard to beat.)
I'd probably start there and kill 2 birds with one stone.

Are you a retail type store front with less sophisticated clients that would not know where/how to find you?

How much is the move going to cost you in $ and aggravation (movers)?
Is the new place that much less attractive?
How much in foot traffic or visibility does the current location compare to the new location and how much of the 75% new clients were a result of the location?
How much more do you want to/need to grow?
 

#3
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I bought a book of business about two years ago. A grand total of two clients went to the wrong place first time, despite me including "driving directions" - his old office was 200 yards from mine. I also included a fridge magnet when sending the letter in the summer. It was inexpensive and I know it kept my details in front of a handful of clients at least. Mind you, some clients did not realize it was a fridge magnet. I kid you not.

The prior EA had moved several times, including a season or two working out of his home.

Recked asks some very good questions.
 

#4
TaxCut  
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Can you negotiate with your current landlord?
A: Not very flexible. Got them down from a 5yr to 3yr but that's it. Wasn't getting a better deal for a 5yr, just a longer commitment.

Are you a retail-type storefront with less sophisticated clients that would not know where/how to find you?
A: Not a retail storefront. Most are 1040 clients. As far as sophisticated? Hard to say. Some of the smartest people can be some of the dumbest too. :lol:

How much is the move going to cost you in $ and aggravation (movers)?
A: Cost I think will be minimal as most of the current furniture stays. I'll have to purchase new furniture, but it'll just be a reception and main office area.

Is the new place that much less attractive?
A: The new building is on a busier more recognizable street compared to where I'm at. My current office probably looks nicer and roomier but the layout sucks. I have two empty offices. I've tried renting them out but haven't had any luck. I also have to be careful who I rent to as I have personal information to guard.

How much in foot traffic or visibility does the current location compare to the new location and how much of the 75% new clients were a result of the location?
A: Not much traffic or visibility at either location. 75% of the new clients are a result of the current location but that's because they followed the prior preparer I acquired from to the current location.

How much more do you want to/need to grow?
A: Not looking to add staff at this point but that could change. Plan on continuing with the same type of client and looking to grow the asset management side. I can generate a decent income with just tax preparation and asset management.
 

#5
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One cost of moving, in my opinion, is the negative impact on your Google listing.

I get a lot of clients from people typing "tax Services near me" etc.

But I suppose that this will normalize after a certain amount of time at the new location.
 

#6
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The Office
Could send out a survey eblast if your firm has those capabilities.

That will gauge your client reception. Might not be that big a deal to your clients, perhaps you're just building it up in your head?
 

#7
Taxaway  
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Are most of your clients living in the surrounding area of your current office, or drive a little bit? If the latter, one mile won't make a difference for an annual visit, True, some who are lazy territorial and one mile out of their way is too much to break their routine.

Think about whether you'll be satisfied staying under the new lease or is this time for a change. Serendipity?

I moved from a time-share 'conference room' to a leased office when I expanded my business about 13 years ago, didn't lose any clients from that I think, and being happy with your office setup is important to your business mental health too. I think you're overestimating loss of clients.
 

#8
smtcpa  
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I know this is not your situation exactly, but I moved from IL to CO 5 years ago and had almost no dropoff. Two years ago I went 100% virtual and lost maybe 2 clients, both of which I was happy to lose. Granted, the Covid shutdowns helped the virtual concept immensely. Last month I moved from Colorado to Virginia and don't expect any dropoff.

The point is, clients are lazy and don't like to change service providers. I don't think a move would hurt as long as you communicate it well.
 

#9
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A local CPA moved from NY to NC to cut back.
Some of the local firms picked up clients from his move, but more stayed with him than he anticipated, to the point that it defeated the purpose of his move.

My firm moved back in 2007 about 20 minutes away from a rural setting to a more city setting (city for upstate that is).
No noticeable drop in clients. (New location was more convenient for most I would say.)

I think a lot of it depends on how established your practice is, how much its retail vs people coming to you because of who you are and what you are to them.

I would think a mile move would not result in any client losses as long as you keep the clients aware.
A postcard to existing clients in Nov and Dec, plus tax mailers/organizers in Jan and you should have pretty significant retention.
 

#10
TaxCut  
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ManVsTax wrote:Might not be that big a deal to your clients, perhaps you're just building it up in your head?


Lots of good info and advice here. Appreciate your input.

Am going to use the new location as leverage to negotiate a better lease term for the current location. I'm fine if I stay where I'm at a little longer but will consider the advice if staying is not in my best interest.

Thanks
 

#11
ATSMAN  
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IMHO moving always causes confusion especially if your current location has been over a long time. That said you will have to decide if the savings in rent is worth the hassle. In my case the strip mall that I rented at was getting busier by the month. During winters 1/4 of the lot was a snow farm! Clients often complained that parking was scarce and they absolutely hated parking across the street and crossing during busy hours. Original lease had heat/ac included because landlord could not get separated billing. They then wanted us to pay for that separately based on a proration but I was really operational 4-5 months out of the year with any real traffic. I don't need AC during winter months. It was unfair to me to be seasonal.

So I left, and kept very very good communication with my clients, who more or less went along. I did lose a few but they would have been gone anyways for some other reason. My move was only 10 miles away.

So if you can renegotiate again and get better terms do the math and see how it works out. You may be in a better position if you don't depend on walk in traffic.
 

#12
TaxCut  
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I agree about the confusion. Prior preparer moved to current location 3 years ago after being at prior location 3 miles away for 30 years. He was in a strip mall but didn't depend on walk-ins and neither do I. Now I'm thinking of moving again after 3 years to a new location 1 mile away from the current to a smaller 2nd level suite.

I think the big question I need to answer for myself is where do I see myself going forward. Do I want to continue working the status quo or do I want to go in a different direction? I'm thinking of going in a different direction, reduce the workload, increase my average fee, put more emphasis on gathering assets to manage, and not pay for office space I don't need. The extra office space I'm paying for roughly works out to an extra 50 1040 returns per year. While 50 doesn't sound like a lot, I also don't want to do them just to pay for extra space I don't need. Don't need the headaches or liabilities associated with it.

That's the way it works in a perfect world.. :lol: Unfortunately, we're not in a perfect world and I may end up staying where I'm at for another 3 years.. Ugh..
 

#13
ATSMAN  
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I think the big question I need to answer for myself is where do I see myself going forward. Do I want to continue working the status quo or do I want to go in a different direction? I'm thinking of going in a different direction, reduce the workload, increase my average fee, put more emphasis on gathering assets to manage, and not pay for office space I don't need.


Well that probably is a big factor that you did not mention before. If the new direction means less return but more profitable returns and the location is not really a factor to achieve that goal then I think the decision is already made. Long time back I figured out when I got out of "walk in traffic" as the prime driver that my location was really for my convenience.
 

#14
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Even though I started off "retail ", I've always thought that retail space of any kind is a mistake when thinking for the long term.

I'd rather pay for advertising instead, so that once I was busy enough to sustain a full book, I wouldn't be stuck with the rent.

It certainly seems like OP should move. Clients will always find you, in my opinion. Sometimes, it's hard to hide.
 


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