When William Gadea was launching IdeaRocket Animation, he worked out of a coworking space. He wasn’t ready to commit to a multi-year lease, and didn’t think he could qualify for one anyway as a new business. But as his company grew, he leased an office. Now he’s thinking of going back.
“The biggest benefit of coworking is the ability to upscale and downscale on a month-to-month basis,” he says.
Gadea is part of a growing number of entrepreneurs and small business owners who are turning to coworking spaces—one of the hottest trends in real estate for small business. They are discovering a variety of benefits, some of which may not be immediately obvious.
“Many people often mistake coworking spaces as merely being a cheaper alternative to renting a private office; however, this misses many of the benefits they offer,” says Scott Woodley, co-founder and CEO of Tutora, a tutoring company based in the UK.
In Tutora’s early days, Woodley worked out of a coworking space. He says, “I would encourage entrepreneurs to be more imaginative to gain the most from the communal offering: building a black book of contacts who can help you, purchasing resources needed by you and others, or even exchanging skills by working on each others’ projects if you have specialist skills you would otherwise not be able to secure.”
James McArthur, CEO of FormTap 3D, a self-publishing 3-D product platform for inventors, has run a variety of businesses out of coworking spaces. For his current venture, he works out of Electropositive in Brooklyn’s Crown Heights, which McArthur says is focused on social good and community. There he can turn to entrepreneurs who have answers to questions that may be eluding him, just as they can ask him questions related to 3-D printing. “The community and sense of home is what is most important to me,” he explains, adding, “That and coffee.”
Connections, Community and Creativity
“Coworking spaces are a great place to connect with people who are entrepreneurial like you but who may have a different skill set,” says Nicole Martins Ferreira, co-founder of e-commerce business Galleon Co. “When you work in the same space with a diverse group of people, you realize you have so many great resources around. You can collaborate with other entrepreneurs on projects that wouldn’t be possible if you were working at home in your pjs!”
Many entrepreneurs find coworking to be a great source for networking, collaboration, and even business development. You don’t want to appear to be trying to drum up business, though. “If you do not try to sell your coworking colleagues on your business, but instead focus on building genuine relationships, your business can survive based on the referral business you can get from your coworkers,” says Carrie Wood, chief marketing officer for Lease Ref. “They not only will come to know, like, and trust you, but they will see you in your element—they will see how good you are at your profession.”
Stacy Taubman, founder and CEO of RISE Collaborative Workspace in St. Louis, sees coworking as an ideal way to build social capital, which she says is essential for entrepreneurs, especially women. She says, “Research shows women have significantly less or different access to social capital than men.” RISE is a female-focused coworking space.
Working in one of these spaces may also light a creative spark, says Bryan Koontz, CEO of Guidefitter.com; he has worked in several coworking spaces in his entrepreneurial journey. “Free to pursue entrepreneurial ventures that commonly stem from a passion or hobby, many people benefit from added meaning and significance to their work,” he says. “When people are in control and free to work on meaningful tasks, happiness and productivity can flourish.”
RELATED: 9 Factors to Consider Before Moving From a Coworking Space to a Private Office
Financial Flexibility
Many coworking spaces offer a variety of options at different price points. You can rent a space for a few hours a week very inexpensively, or you can spend more for unlimited access and/or private office space or conference rooms. Different options can provide entrepreneurs with a great deal of financial flexibility. Some people even choose to bring employees into their coworking space as their companies grow.
According to Alex Cohen, Lead Commercial Specialist with brokerage CORE, “Coworking spaces are also typically fully built-out (in flexible configurations) and don’t require a tenant to expend capital on fit-out, furniture, or voice/date wiring—all of which are potential expenses when a company leases dedicated office space.”
The money you save may be used to grow your business. Tight cash flow is one of the top problems new businesses face. It can prevent you from hiring new employees, taking on new projects, and buying new supplies. Plus, it’s often one of the things lenders look at when deciding whether to give you a business loan (along with your personal and business credit scores). Keeping an expense like office space variable instead of fixed can keep your books flexible and help you grow your business at the right time.
Choose Wisely
Coworking isn’t for everyone, of course; there are pros and cons to coworking spaces. One entrepreneur told me the walls in the private offices in his coworking space didn’t extend to the ceiling. Not only were phone conversations not as private as he’d hoped, but the entire space would get very noisy at times. William Gadea says, “The biggest downside is the acoustics, especially if the offices are all glass—it makes it really hard to have two people on the phone at the same time.”
Make sure the space is a good fit for your workstyle. “Certain floor plan components will help you maximize productivity in coworking spaces,” explains Maura Thomas, founder of RegainYourTime.com. “Knowledge work requires quiet, thinking space for flow. However, you can still build in opportunities for collaboration in an open work space.”
Noise-canceling headphones may help, but you don’t want to be so distracted that you can’t get any real work done. Consider renting space for a few hours to try it out before you commit.
Overall, though, many entrepreneurs are enthusiastic about coworking benefits that can help their businesses grow. As Michael Zimmerlich, founder of 80/20 Records, who works out of CO+HOOTS in Phoenix, says, “The real-time education that I’ve learned from my [coworking] peers is invaluable in keeping my business current and relevant in today’s society.”
RELATED: Big City or Small Town? Choosing the Best Location to Start Your Business
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The post Coworking Spaces: The Office Trend Every Entrepreneur Needs to Consider appeared first on AllBusiness.com. Click for more information about Gerri Detweiler.
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