Taking a longer view to your real estate delivers benefits well beyond reduced facility costs. Real estate affects every aspect of your business and can be the key to transforming your organization and unlocking new top and bottom line growth.
While real estate may represent your largest single monthly disbursement, it is likely to be third or fourth on your list of monthly expense categories. Depending on your industry, labor, raw materials and transportation typically account for larger shares of an industrial business’s costs.
Strategic real estate planning recognizes that your location and your facility each play a key role determining those costs. By optimizing your location for your specific requirements, you can create a sustainable advantage over your competition that will serve as a foundation for long term success.
Beyond achieving cost reduction, location strategy can improve service response times and improve your access to new prospects, suppliers and distribution channels. Because of this, you may be able to reduce raw material or finished goods inventory levels to positively affect your cash flow.
Your location also impacts your ability to recruit and retain the best employees. By studying the workforce demographics, competitive employment opportunities and current wage environment of the labor draw area, sites can be evaluated against one another and against industry standards. As workforce issues become more prevalent across the country, this analysis has become a vital aspect of site selection. Conversely, choosing the wrong location can inflate your labor costs significantly and create challenges in finding new employees with the skills and experience that you need to run your business.
Inside your facility, your efficiency, quality, safety and security are impacted by your real estate decisions. Facility design should provide for an efficient flow of goods while maximizing the utilization of the entire cubic space of the building. High space utilization can be achieved through racking, mezzanines, material handling equipment and most of all a thoughtful approach to designing your space. The payoff to this approach is seen in raising your revenue capacity per square foot as well as a reduction of material handling labor per unit of throughput.
The end goal is to create a separation between your company’s position and that of your rivals. In today’s hyper-competitive business environment, the difference between success and failure is razor-thin. Attracting and retaining better employees, being closer to your customers, having lower costs, producing better quality, or achieving tax savings could be that difference.