When Does a Coworking Space Stop Working for My Business?
Don’t get us wrong, there are many benefits to coworking, especially from a cost perspective. By the end of 2018, more than 1 million people will have a desk in a shared office space! But for many businesses, there comes a point when it’s time to acknowledge that you are ready to move onto a space of your own. How do you know when it’s not working? Here’s a guide:
1. Your business is getting consistent revenue
You liked coworking because of the short-term cost commitment and the lack of office renovation and maintenance costs. However, the cost premium paid in exchange over flexibility may be harder to justify over time with consistent, predictable revenue.
2. Your team is distracted
You were attracted to the networking opportunities in coworking. However, you spend more time mingling with coworkers over coffee. Perhaps it’s time to admit coworking is probably doing a lot more for your social life than your business.
3. You are growing your team and your business
If you are growing your permanent headcount, as well as needing space for logistic storage, think about reviewing the cost of real estate per headcount in a co-working space vs a conventional office.
4. You need distinct corporate branding and identity
You have a culture of your own as a company, and you need your own space to thrive. Has the shared space felt somewhat “restrictive” to your company? Can you invite clients over to close the next deal?
5. You want to spend more sensibly in the long run
In Singapore, monthly pricing for a hot-desk per head in a co-working space in District 1 is approximately S$600+ monthly. You could do the simple math- compare the total co-working office rental cost (include meeting room booking fees) against renting your own space, one-time cost such as furniture purchase and renovation and monthly operating cost like utilities, internet, cleaning and possible ad-hoc maintenance. Else, submit your basic headcount information and get a cost comparison of renting coworking space vs your own office space.
So when does coworking make sense?
For solo-workers such as freelancers, independent contractors or regional sales people, renting a desk in a coworking space can be economical with added benefit of a built-in community. Coworking is also ideal while your still-small company is in flux. The month-to-month commitment offers flexibility as your team grows or business needs change.
However, you’ll likely outgrow shared space as you expand. Then it’s time to consider spaces with private rooms or your own space, with more predictable and consistent cash flow in order to support rent for a market norm of a 2 to 3 year lease.
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