Small Business Relocation Planning: Convenience Store Guide

Introduction: The Challenge of Business Relocation

One of the most integral parts of any successful business transition is thorough and exhaustive research. A literature review of the particular issues associated with any business trend or transition can serve any business owner, no matter how small their operation. Though it is important to understand the local and regional aspects of small business — knowledge that can sometimes only be gained through owning a business in a particular area and practicing controlled trial and error — the larger concepts of business relocation and retail service practices also serve as tools for better understanding needs and best practices.

In this particular case, the owner of a small convenience store must assess both local and national information sources on issues specific to the transition he or she is facing. Business relocation is not a simple prospect, and developing some understanding of what has worked for other businesses — and what has not — can be of great assistance to any entrepreneur.

The possible confusion and pitfalls of negotiating a value and compensation package from the North Carolina Department of Transportation (NCDOT) require careful understanding and a concrete idea of what to do and what to avoid when developing a transitional business plan — especially one sufficient to obtain a government compensation package award. (Gambarotto, 1993, p. 34)

Developing a Business Plan and Negotiating Government Compensation

Fortunately, winning a government deal or contract is not as complicated as one might think. The government — especially in a challenging economy — can be a reliable source of funds. According to Gambarotto (1993, p. 34), being successful really comes down to two ingredients:

1. Analyzing the relevant federal and provincial agencies, corporations, colleges, and universities to identify which could benefit from your offerings; and

2. Determining who makes the key decisions in those divisions and how those decisions are made.

Although the process and outcome may be essentially the same in the present case, the challenge of identifying agencies is less of a concern here, since the relevant party is already known: the North Carolina Department of Transportation. Gambarotto suggests that the largest obstacle may be simply believing the process is too complicated. It may require both expert advice and expert intervention. For a small business owner, however, the resources needed to retain such an expert may be out of reach beyond local and regional business association assistance. The best solution may therefore be to become your own expert.

The results of a survey conducted by PlanWare show that the typical business plan runs about 15 pages, requires a few months to research and write, and goes through approximately three drafts. General plans are more difficult to prepare than usually anticipated, especially the financial projections and market analyses. Only limited use is made of external advisors, and most plans are viewed as critically important — frequently used to help raise venture capital. Much more time is spent researching plans than writing them. Two types of plans were identified: basic plans, fewer than 10 pages long, are widely used for internal purposes or to assess the viability of a business; comprehensive plans are mainly used to raise venture capital or bank loans.

Business planners should consider the following lessons drawn from the PlanWare survey (PlanWare Survey, 2002, pp. 9–10):

1. Decide the underlying purpose of the plan first, to get an idea of the required length, amount of research, and overall timescale.

2. Compile a detailed table of contents early. Use it to identify critical issues requiring research and/or outside assistance.

3. Plan a work program and timetable that allows adequate time for researching, rewriting, and redrafting. The more important the plan, the longer it will take to complete.

4. Recognize that the process could be more difficult than expected. Consider seeking outside help at the beginning, especially for the most vital areas of the plan.

With the challenging climate of the post-9/11 economy, the prospect of business relocation holds significant pitfalls for any entrepreneur. Regarding small businesses — and more specifically retail small businesses — there are both benefits and drawbacks that affect transitions such as a relocation. (Small Business Survival Committee, 2002, p. 12) One benefit of smaller size during a transition is that the operation is more focused and often involves much less inventory and a smaller employee base.

In the particular case of this Four Oaks, NC convenience store, the relocation is unavoidable due to the new diamond interchange the NCDOT has slated for construction. The impact of changing location from Main Street to Keen Road at the zero hour could possibly negate the improvements and expansions the owner has undertaken in recent years. Yet it could also give the business the opportunity to expand to a larger degree than could have been funded without the fair-market compensation package offered by the NCDOT. Additionally, the improvements already made may not have realized their full potential, but they will surely increase the fair-market price the business might command in negotiations.

Though the present owner does have some capital available for this transition, the negotiation of the compensation package will be crucial to the success of the plan. Integral to negotiating an equitable settlement is the entrepreneur's forethought on budget issues, including present and future operating costs, loss of revenue during the transition, costs for architectural and planning services, moving services, environmental impact costs, employee impact, city and county permits, and the possible cost of legal services to facilitate contract negotiations. Another consideration is that the owner may take advantage of significantly reduced interest rates on small business loans. The Federal Reserve cut short-term interest rates from 6.5 percent to 1.75 percent in 2001 — a substantial reduction — and while access to credit remains a challenge for small businesses, lower rates should have a positive impact. (Small Business Survival Committee, 2002, p. 12)