Updated: Apr 26, 2018
Starting a small business or freelancing? Then coworking might be an ideal option for you. With benefits such as lower costs, conducive environment, community and collaborations, coworking is great for some small businesses, entrepreneurs and freelancers.
Continue reading to find out if coworking is right for you.
What Is Coworking?
Coworking is traditionally defined as the sharing of an office space by self-employed, independent professionals who want to work together in a communal and collaborative environment.
In recent years, global companies such as IBM and Microsoft are giving their employees the option to work from coworking spaces.
Rise Of The Gig Economy
Self-employment is on the rise as companies prefer to hire freelancers over permanent employees to stay agile in a fast paced economy. With a thriving gig economy in many countries, freelancers are taking charge of their careers and choosing flexible working hours.
In 2017, the total number of self-employed Americans increased to 40.8 million or a 2.8% increase from 2016. And they represent 31% of the total workforce.
"We will have a community of 80,000 people (in China) this year, and it will grow to 1 million by the end of 2021." - Adam Neumann, Co-founder & CEO of WeWork
And it is this rise in self-employment that has led to a surge in demand for coworking spaces. According to Statista, the number of coworking spaces has grown by 28% in 2017 with global coworking companies like WeWork growing to become billion dollar companies.
Why Coworking Is Ideal For Entrepreneurs?
Coworking offers many benefits for small businesses with limited resources. Benefits include lower financial costs, conducive environment, community and collaboration opportunities.
1. Financial Costs
If you don’t need or cannot afford a private office, coworking gives you the benefits of an office without the costs.
Renting a commercial office space usually requires signing a long-term lease of 2-10 years with a large deposit. And depending on local laws and regulations, breaking a commercial lease can be difficult and expensive.
On the other hand, coworking spaces offer packages similar to club memberships. Spaces can be rented on a monthly, weekly or even hourly basis. From a cash flow perspective, coworking is ideal for startups, entrepreneurs and small businesses without the high upfront costs and long-term commitments.
Coworking gives entrepreneurs the flexibility to scale up when their businesses grow. Small businesses can add or remove team members at any time without the costs associated with a long-term commercial lease.
With affordable packages, you can access coworking spaces for a few hundred a month. In most major cities, entrepreneurs have the option to choose the right coworking space based on location, type, amenities and price.
2. A Conducive Environment
Working from your home or coffee shops can be distracting. And most coworking spaces offers you the flexibility of working from either a communal workspace or a quiet room.
Coworking facilities are usually all inclusive. Spaces provide furniture and amenities such as WiFi, printers, meeting rooms and even beer! You won't have to waste time hopping from one coffee shop to another in search of WiFi or power outlets.
Coworking is especially popular with millennial entrepreneurs as there are fewer responsibilities. The facilities management is responsible for cleaning, maintenance and administrative matters with a single invoice issued each month to members.
Most coworking spaces provide access to meeting rooms. You can schedule face-to-face meetings with your clients, group discussions or interviews. Leave customers and new hires with a lasting and professional image of your business.
3. Community & Collaboration
As the saying goes, "No man is an island." But for most freelancers and entrepreneurs, the feeling of isolation is very real. Self-employed individuals don’t get the social interactions and synergies from working in a traditional office environment.
Coworking offers entrepreneurs with the opportunity to share and discuss ideas with like-minded individuals. New ideas can help you better understand consumers and improve your products and services.
Networking is an important part of any business. And coworking spaces are ideal environments to network with other entrepreneurs. Need a web designer for your business website? Or need to a social media marketer to promote your products? You could potentially partner with a fellow coworker.
Is Coworking Right For You?
While coworking offers many benefits, it is not suitable for every entrepreneur or business. A startup that has access to funding may prefer a commercial office space for these reasons:
1. Create A Professional Brand Image
By having your own office space, you can design a unique brand identity by customizing signage, office layout and furniture.
2. Protect Confidential Information
Coworking may not be suitable for businesses dealing with sensitive and confidential client information (e.g. law firms, fintech startups). In an open coworking environment, other members may overhear conversations and see information on computer screens.
3. Avoid Excessive Distractions
Collaborations and networking can be beneficial to many startups but if you are an established company, you may not need either. Coworking spaces with communal workspaces and social interactions can be disruptive to your work.
4. Control Over Physical Environment
Coworking members have little or no influence when it comes to ergonomic issues such as desk space, lighting, temperature and seating. Having your own space allows you to design your office to optimize your team's productivity.
5. Need A Quiet Work Environment
Coworking spaces may not be suitable if you need a quiet work environment to focus. Background noise from conversations and coffee machines can be very distracting. However, many coworking spaces offer both dedicated desks and private rooms.
6. The Right Vibes
The vibes of coworking spaces might not be your cup of tea. For example, if you are in the web design business, you might want to work in a creative and casual environment compared to a professional workspace.
While many successful businesses with dozens of employees probably need the privacy and security of their own office space, coworking spaces are viable options for solo entrepreneurs and small business owners.
Entrepreneurs and small business owners can definitely benefit from low costs, flexibility and the community that coworking spaces offer.
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