Any experience or guidance relocating a business to another state? - Searchfunder

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by a searcher from Northwestern University - Kellogg School of Management
in Dallas, TX, USA

1yr ago

Any experience or guidance relocating a business to another state?

looking at acquiring a B2B fabrication company
- the business is currently located in an industrial park in the California Bay Area
- seller owns the building and rents the space to the business at a heavily discounted rate
- the building is worth 6-8x the business
- seller is retiring and will be selling the building inredactedmonths
- seller wants the building to be vacant for the sale so the business needs to relocate within 18 months
- I would operate the business for ~12 months in the current building prior to relocaction
- this business sells to customers nationwide and not dependent on local customers or relationships
- looking to relocate the business, potentially to Texas
- there are a few large pieces of equipment that would need to be disassembled and reassembled
- the cost/time/risk to relocate is being factored into the purchase price
- I know there are many legal and tax hoops to jump through
- aside from needing to relocate, the business checks nearly every other box
- not too concerned about losing employees, the fabrication work does not require specialized skills

Anyone have experience with something like this?
Any references for potential commercial moving companies?
Is this too crazy to do?!

Thanks!

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reply by a searcher 1yr ago
from Bowling Green State University in Surrey, BC, Canada

This really adds to the complexity of the transaction/transition. If I'm you, I would make the case with the owner to sign you up for a market-based lease for 5 + 5 and include a 'right of first refusal' on the building purchase - give him a path to selling the building down the road and make his life easy in the meantime.
If you are committed to moving and the seller is committed to selling, then make sure you're talking to a regional bank with a presence in both markets. And make sure your business plan details and budgets the move - you may want to look at buying the building on the other side of that move. Give the lender another reason to do the deal - a nice chunky owner-occupied property mortgage.
For your investors, you will need to pitch the value of premses ownership which may or may not resonate. For me, I see premises ownership as a benefit for something like a manufacturing business - control your destiny, moving sucks, the building is a great means of building tangible equity to potentially draw on in tough times.

reply by a searcher 1yr ago
from Northwestern University in Dallas, TX, USA

Isaiah! SMALL WORLD! Great to connect with you again. There are 2-3 large pieces of equipment, like industrial ovens that are around 10x10x10 ft. The rest of the equipment is fairly small handheld-type fabrication equipment.

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