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I started my first business in 2007. My search for vibrant office space in downtown Chicago hit a dead end when brokers realized I wasn’t interested in a long-term lease. After turning away from outdated options and opting out of a coworking space that isolated me to my office for hours on end, I decided to take my expertise in niche real estate and create the company I was looking for. I saw an opportunity to fulfill the needs of business owners like me who wanted an affordable, modern space and a sense of community that allowed them to focus on building their business.
As we embark on 2020, many new business owners are contemplating how to start on a strong foot, while more established organizations explore ways to improve operations and find sustainable cost efficiencies. Whether you fall into one of these categories or somewhere in between, here are some practical tips and considerations to make a coworking space work for you and your business:
Challenge: The costs associated with a traditional office. Office space rental can account for a hefty portion of a company’s overall fixed costs. It’s also one of the most common budget projections that business owners underestimate. Finding a great space in a desirable location is only the first step. Some often-overlooked considerations outside of rent include taxes, improvements, repairs, utilities like power and internet, furnishings, supplies, and more. When breaking it all down some company leaders are stunned to learn that their office costs can range anywhere from $100-$1,000 per employee per month.
Solution: Select a working space that reduces your rent and associated expenses. Most traditional office spaces require five- to 10-year leases, which is a hefty commitment of time and money. Look for a coworking setup that allows you to commit to shorter-term contracts, like 30 days to one year, to avoid the investment of capital into real estate.
One way to get the optimal benefit from coworking is to understand not only the cost of rent, but also what is supplied in your lease. Does the space take care of the many little things that add up financially and drag down morale when running an office? Consider how amenities and necessities like a coffee station, printer supplies, bathroom essentials and furniture affect your bottom line. When these services and staff are spread over a wider pool of users, it should reduce the cost burden and give you a higher ROI.
When comparing prices across your coworking options, it’s also important to know the leasing terms between the company and the owners of the property. If the price structure you start with is sustainable and your space is secure, this will help you ascertain whether you decide upon a short- or long-term leasing agreement. Don’t be afraid to dig into the terms and ask questions.
Challenge: The potential isolation of traditional offices.
Solution: The essence of coworking space design and operation is the ability to allow members to develop connections naturally. Offer employees the opportunity to interact and collaborate with professionals with a wider range of expertise serving many different industries; it ignites a potential for new ideas and new revenue streams. From design firms and accountants to tech support and app developers, it is not uncommon that businesses find valuable vendors or clients in the office next door. Take advantage of the networking opportunities inherently present in coworking spaces that can help your business grow.
Challenge: Being locked into a too-big or too-small office for a long lease term.
Solution: Identify a coworking space that provides the flexibility that suits your office’s needs. It’s absolutely OK to have an upfront discussion about whether you can upsize or downsize your space at any given time based on your business needs. In fact, I encourage it.
If you’re unsure just how much space you need, a rule of thumb is to start where you are. Consider your current number of employees and contractors. How often do they all work from the office at the same time? Does your company have trade secrets or sensitive subject matter that necessitates privacy, or is open space more amenable to your culture? What budget range is most comfortable for your organization based on revenue, growth projections and other investments back into the business? Knowing that meeting room and conference space, kitchen areas, and restrooms are included in the typical coworking agreement can allow you to focus on your workspace itself. Take an inventory of your needs to inform your decision on the right amount of space and the most ideal leasing agreement for your company.
Challenge: Attracting new and engaging existing talent in uninspired office environments.
Solution: When it comes to office space, looks do matter. People absolutely want to work in spaces that are well maintained and inspiring. Don’t discount the importance of amenities like coffee and refreshment stations, functional and high-end furniture, office supplies, and floor plan flexibility as you weigh your coworking options. Understand whether the space you choose will naturally create an engaging and inspiring office.
We have also seen an increase in large enterprises moving to the coworking model to minimize reinvestment in construction reconfigurations and capital improvements. Whether you’re a small or large organization, take advantage of the ability to have an aesthetically pleasing space without the maintenance obligations, and redirect that effort, money and time toward growing and expanding your business.
Business owners looking to improve creativity, fuel innovation, build a sense of community, find a cost-effective office solution and a realize a better way to recruit, train and retain talent would be wise to consider a coworking space. Once there, take stock of what your environment offers and take purposeful steps to leverage it into meaningful business growth.