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The biggest question I hear when I tell people I own a coworking space is, why should some use a coworking space over a traditional office, working from home, or visiting a cafe? Coworking is still a relatively new industry being younger than 20 years old. So, it makes sense that not everyone knows what coworking is or the value it can provide. I want to break down the cost impacts of the different options not just financially but the other costs that impact a small business.
Option One - A small business can lease a commercial office space
Let's look first at the financial impacts of this decision:
Rent:
Rent for a commercial office space will vary depending on how big the space is and where it is located. Most commercial office spaces will range between $12 to $24 per sq. ft. this price divided by twelve will give you your monthly lease price. There may be other fees that are added into the rent if you are in retail.
Term:
Most commercial office spaces will require you to sign a minimum of a year lease but standard practice is a 5 year lease.
Other Fees:
Other fees will include electric, gas, water, sewage, taxes, internet, phone, insurance, condo fees (some landlords include this as something the tenant pays).
Furniture:
Once you have an office space you will then need to furnish it with desks, chairs, guest seating, storage, etc.
Supplies:
You'll need to keep adequate supplies including those to stock bathrooms, hand towels, water, and things for guests. This also includes printing supplies, ink, paper and items for mailing packages.
Cleaning:
Someone also needs to keep the office clean, so you'll need to pay someone or do it yourself.
Next, let's look at a more intangible cost and that is the cost of productivity and opportunity.
In a commercial office space, the space is occupied by only you and your team. While this can be an excellent option for big companies who have their own cultures established, a smaller company may find that their productivity isn't as high as it would be if their team was around other people. There is something to be said about being around like-minded people. Even if you aren't always talking to other people, just seeing someone in the same space as you can be not only incredibly motivating but also stave off the feeling of isolation.
Networking and meeting others is also something you will need to go out and do proactively rather than be less passive.
Option 2: Working from home
Let's look first at the financial impacts of this decision:
Rent:
This is the cheapest option unless you decide to build yourself a fancy in home office.
Term:
There is also no terms you are subjected to when working from home, well except maybe by your partner.
Other Fees:
You will have to think about what expenses your business will contribute to the overall expenses of your home. These expenses might include electric, gas, water, sewage, taxes, internet, phone, and insurance.
Furniture:
While you don't necessarily need to have special furniture, in order to claim a space for tax reasons you need to have a specific area in your home dedicated to your business.
Supplies:
The supply cost is less and is largely paper, printing, mailing, and the like.
Cleaning:
Someone also needs to keep the office clean, so you'll need to pay someone or do it yourself. But as with the rest of the expenses, the size of your space will be smaller and most likely cost less.
Additional expenses:
Networking expenses and meals when going out and seeing clients.
Working from home comes with a very different set of intangible challenges that one might want to consider:
The honey do list - working from home it might be hard for others to realize that when you are home during the day you should be working not doing things around the house.
The ever-ready baby sitter - sometimes working from home gives people the impression that you have the immediate availability to watch children who are on school vacation, sick, or home on holiday.
The I'm not working so why are you - boundaries and understanding how people work from home can be hard for those who work in a traditional office. If they are home, they might assume that since they aren't working that you should be able to spend time with them.
The constant distraction - It can be really hard to focus when the house is loud, when there are projects left undone, when the kitchen is a mess, when kids are asking for snacks, when the dog is barking, when the house phone is ringing, when the baby is crying.
Bringing Strangers Home - Not everyone wants to invite strangers into their homes for business meetings making finding reasonable safe places to meet a must.
Option 3 - Working in a Shared Office or Coworking Space
Let's look first at the financial impacts of this decision:
Memberships and Day Passes:
Memberships for a coworking or shared office space will depend on the type of space you need to use. Virtual Offices can start at $75/mo and a Full Time Office can go up to $1200/mo in Boston. Our larger Full Time offices are available at $750/mo. Flexible Private office plans depend on the space, ours start at $120/mo. There are a lot of options and it is always a good idea to ask the coworking space you are visiting what options they have available and if they provide custom plans. We love providing custom plans for our members and we have many members on plans that work perfectly for their businesses.
Term:
Many coworking spaces will allow you to purchase day passes, hold memberships month to month, or sign year long membership subscriptions.
Other Fees:
Usually a membership is all inclusive and may include other fees such as a deposit, a registration fee, a locker fee, printing fees, or fees for using space outside of your membership.
Furniture:
Usually furniture is included in your membership unless you request specific furniture that is above what is standard issue.
Supplies:
Most supplies in a coworking space are included in the membership fees some exceptions may exist for guests of a member. If you have questions about this ask your coworking space.
Cleaning:
The management of the coworking space will usually handle all general cleaning, but it is common that coworking spaces ask their members to be mindful and clean up after themselves if they make a mess. This is just being part of being a good member of a community.
The intangible value and opportunities for using a coworking space are numerous, here are just a few:
Opportunity to meet like-minded people you might not have met somewhere else
Synergies that happen when people with similar goals come together in a common place
Marketing and increased visibility in and around the space
Community adding to a community not only increases what you have to offer, it elevates the whole group and what they can each achieve
The ability to share the cost of resources and infrastructure across many people
Handing over the maintenance and people issues to management for them to take care of so you can just focus on your business
As you can see there are pros and cons for each of these three options, but there is definitely great value for a small business to use a coworking space especially when they are first starting out. Most small businesses struggle with two things lack of support and expenses, a coworking space helps with both of these pain points.
If you'd like to learn more about coworking and how we might be able to help you, we'd be happy to jump on a video call with you, click here to schedule one now.