What demand should the new premises plan assume?
- Topic
- Relocation decisions
- Reading time
- 3 minutes
- Last reviewed
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Use more than one demand figure when choosing a new site. A current order book, a pattern of repeat orders and an attractive enquiry carry different uncertainty. Combining them into one optimistic total can make a premises decision look better supported than it is.
The British Business Bank's forecasting guidance stresses the importance of assumptions and updating forecasts when material facts change. For a move, record what demand each proposed operating arrangement assumes.
Start with the evidence behind the workload
Booked work can establish a near-term requirement, subject to its actual terms. Repeat demand suggests a pattern but does not guarantee future orders. An enquiry or possible new contract belongs in a clearly labelled opportunity assumption until its status changes.
Keep the evidence date and responsible commercial contact with each entry. Check whether a large historical order was exceptional before treating it as normal weekly demand. Also distinguish units from workload: two products may take very different amounts of time through the same department.
A product-family map helps prevent a total sales figure from concealing that difference.
Make scenarios change a decision
This fictional example concerns similar standard jobs, so their weekly counts can be compared for illustration. It is not a forecast for a real business.
| Scenario | Assumed weekly jobs | Evidence or assumption | Decision to examine |
|---|---|---|---|
| Lower | 60 | A repeat customer reduces orders | Can the fixed operating cost still be supported? |
| Base | 80 | Current repeat pattern broadly continues | Can the intended operation meet the service promise? |
| Higher | 110 | A discussed contract is won | What extra capacity and support would be needed? |
The higher case is 30 jobs above the base, or 37.5% more. That arithmetic does not show the resources required. Inspection, staffing, material arrivals or customer response may become the constraint before the main process does.
Ask the relevant operating leads to explain what changes in each case. If all three scenarios lead to exactly the same assessment, check whether the scenarios are specific enough to inform the premises choice.
Separate capacity from affordability
The site may physically support the higher case while costing too much in the lower case. Or the base case may work financially while leaving no accepted way to handle the opportunity. Compare future operating costs with the accountant using consistent assumptions.
Treat growth space as a deliberate option with a trigger. Define what evidence would justify it and what the business would do if that evidence never arrives. Do not silently spend the higher-case revenue in the base budget.
Update the decision pack when an important order, cancellation or customer discussion changes the facts. Record which site or equipment conclusions need reconsidering.
If the agreed base operation leaves equipment surplus, UK Auction Group can receive an enquiry. Explain where a potential future order still affects the owner's release decision, rather than describing all unused capacity as permanently redundant.
Return to Relocation decisions for the wider move choices.
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This guide is general information and education only. Legal, tax, employment and safety decisions may need a qualified adviser who knows your situation. Read the disclaimer.