For some startup founders, working from home or out of someone's living room is fine when you're first getting off the ground. Eventually, though, most companies graduate to an official headquarters where their employees can report every day.
When you're ready to take this step, you may be intimidated by the prospect of finding and leasing office space. Good commercial real estate can be difficult to find, and it's even harder to find something in an affordable price range if your business is strapped for cash. One alternative is a co-working space, a shared office where multiple businesses all work together under the same roof at a lower cost than that of a traditional office lease.
Co-working spaces aren't right for everyone. If you value privacy for your business and would like the ability to design and change your own office layout at will, a traditional office-space lease might be a better choice. But if you don't mind having neighbors and sharing resources like Wi-Fi, bathrooms and kitchens with other businesses, co-working can be a cost-effective, beneficial option for growing companies.
Why co-working spaces?
While it may be nice to have an office to call your own, there are numerous advantages to using a co-working space, especially for fast-growing and budget-conscious startups. One of the greatest appeals of a shared office is that it's work-ready, right when you need it. The typical office-leasing process can take months; once you find a space, you'll need to negotiate a lease, design and construct your layout, purchase furniture, and get your equipment set up before you and your team can begin working in the space, said Phil Domenico, co-founder of shared office space Assemble. A co-working space is available to you almost immediately once the arrangements are finalized, complete with desk space, conference rooms and Internet access.
"Co-working spaces are havens of productivity, inspiration and happiness," said Liz Elam, founder of Link Coworking. "You don't have to worry about getting the internet turned on or fix the printer jam. People come to the space because they need to get something done but they stay for the community, collaboration and the networking."
Jayna Cooke, CEO of event-venue listing site EVENTup, said that her company chose a co-working space because of the flexibility it offers for companies who are planning to scale up or down in the near future. She plans to expand her staff, but it didn't make sense to spend money on a huge office space based on growth that may not happen for a year or two.
"When you sign a lease, you usually can't sign for less than two years," Cooke told Business News Daily. "Last year, [my company's staff] went from zero to 25, [and] we're hoping to double. On day one, I wouldn't have wanted to sign a $10,000-a-month lease and project where I'd be in three years."
Similarly, Kim Paone, senior vice president of Highwire PR, noted that her company's co-working space allowed the business to easily grow without worrying whether its leased office space would accommodate that growth.
"We've already upsized offices once and were able to do so in the same building with minimal hassle," Paone said.
Another plus of joining a co-working space is the built-in community. Sharing an office with other similar-minded small business owners gives you the opportunity to network while you work and share resources that you'd otherwise have to track down on your own. Many co-working spaces also organize regular events to help their occupants get to know each other and find ways to work together.
"When you're just starting out, it pays to maximize every resource you already have at your disposal," saidAlon Alroy, co-founder and CMO of event-management platform Bizzabo, which operates out of a co-working space. Make "the most of the community — you get as much out of it as you put in. Put in the extra effort to get to know your neighbors, [and] attend the professional meetups and seminars. You never know who you might meet or what you might learn."
What to consider when choosing a space
Most shared offices operate on the same basic business model, but there are a few differentiating factors that you'll want to consider before signing an agreement. Here's what to look for when choosing your co-working space.
Location. Shared offices are most frequently found in large cities like Chicago and New York, which can be a real cost-saver for businesses who want to be in these areas without signing an expensive urban office-space lease. However, be sure that your new co-working address is one that you feel comfortable not only showing up to every day, but also inviting professional contacts to. A lower price isn't worth it if your office is difficult to get to or in a run-down part of town.
"When looking for a co-working space, you should go visit everything that your city has to offer until you find the space that suits you and your team," Elam said. "Most [shared offices] offer a free day to test out the space."
Paone said that location was an important factor when her company was looking for a shared office space: "We wanted a place we could bring clients and media to that was consistent with our brand."
Office setup. Because you can't rearrange and customize a co-working space the way you could a private office, you have to be satisfied with the existing layout and setup of a shared workspace. Cooke said that her office has assigned desks and equipment, so her staff members don't have to worry about taking their belongings home every night or using their personal cell phones for work. Other co-working spaces offer less stability, she said.
Domenico said facilities with open seating arrangements, where all businesses work together in the same space, don't always work very well. For this reason, the space his company offers its members includes glass-walled offices to balance privacy, security and openness.
Pricing structure and membership benefits. While a co-working space might have everything a growing business needs — Internet-enabled computers, phones, copiers, coffee and snacks, cleaning services, etc. — not all of these amenities are necessarily included in your membership price. Be sure to read the fine print and know exactly what you're paying for, so you don't end up with any hidden fees after you've already set yourself up in a space. On the flip side, you'll also want to know what you do have access to so you can make the most of your experience.
"Make sure you understand all the benefits you receive with your co-working membership and take advantage of them," Alroy said.
Your neighbors. Unlike in a private office, where it's just your company, you don't get to choose everyone in your immediate workspace when you're sharing an office. Your co-working neighbors can make all the difference in your everyday work experience, so try to find out what other businesses are in the space before you sign up. In most cases, you'll find that there are a lot of other startups and small companies like yours, so you can really benefit from each other's experiences and connections.
A shared office "is a built-in network," Cooke said. "If you're in a spot by yourself, you're going to be isolated, but at a co-working space, you have the ability to ask questions to a larger group. It's a more collaborative work space."