Taking The Lead

Is it time to move your business out of your home?

Working from home is a hot trend, but it's not the best idea for every business. How do you know if it's time to move your homebased business to a commercial location? Consider these two key issues:

1. Does your home office efficiently and effectively accommodate your operation?

2. Are you sure you'll have the revenue necessary to support the increased overhead you'll have if you move?

When Dean Constantine, president and CEO of Zevex Inc. in Salt Lake City, founded the company in 1986, he housed it in his basement. His long-term goal was to build a high-tech company that designs, develops, manufactures and distributes medical products; his home office was just the first step. "It was primarily a cost issue," he says. "There was no funding to do anything else."

He operated from home for about a year before he landed a contract with a major company. The terms of the contract included a promise that in return for the fixed income, Constantine would move his company into a commercial location, hire additional staff and set up a manufacturing facility.

"We could have lasted at home a little longer than we did, but we made a commitment to that first major customer to move," Constantine recalls.

The move actually fueled additional growth. "As soon as we moved out of my home, we had other customers visit us and the location gave us credibility to the point where we won small contracts and then built on those."

The company's first commercial facility measured 4,000 square feet, and in the beginning, Constantine used less than half of it. After a series of incremental moves over the years, Zevex now occupies its own 51,000-square-foot building and is looking to expand again in the near future.

Constantine's advice to homebased companies is to keep the business at home as long as possible. "Keep your overhead as low as you can without stifling your growth," he says. If you need room to grow, however, and you have customers supporting you, it's time to move.

Contact Sources

American Media Inc., http://www.ammedia.com

The Game of Work Inc., (800) 438-6074, game@gameofwork.com

Zevex Inc., 4314 Zevex Park Ln., Salt Lake City, UT 84123, (801) 264-1001

This article was originally published in the December 1998 print edition of Entrepreneur with the headline: Taking The Lead.