In March 2016, WeWork, a coworking startup, raised $430 million at a $16 billion valuation. Across its 20-odd locations, the company is considered a second home to 40,000 members that rent desks from its shared office spaces.
The “WeWork phenomenon” has caused many entrepreneurs to rethink where and how they work. Instead of holing up with a couple of your best friends in your parent’s garage or informally setting up shop at a local cafe, creatives pay a few hundred dollars a month to join a thriving community of professionals that actively want to coexist together. But coworking spaces are not for everyone. So, below we have included a list of pros and cons to help entrepreneurs understand if coworking is right for them.
A case for coworking
For entrepreneurs and creatives, coworking spaces promise opportunities to mingle with like-minded peers and provide full-service support for all your office management needs so you can focus on what really matters to you — building a business. Renting shared office space allows you to outsource some of the menial tasks that come with office management such as sourcing and replenishing office supplies, procuring furniture, hiring a cleaning and maintenance crew, and worrying about the electricity bill or WiFi hiccups. In shared office spaces too, you get access to bottomless coffee, saving you multiple trips a day to Starbucks, and sometimes beer on tap, which can come in handy after a long day of staring at your computer screen.
Many workers feed off of the energy in coworking offices. Sharing a workspace can help professionals stay motivated when they see peers surrounding them working hard on cool and exciting projects. Some companies even see a productivity boost when they move their staff into a coworking space; with a high concentration of talented people, businesses often find that coworking spaces are the perfect place to source potential partners, contractors, customers, and employee recruits.
Small and growing firms value the flexibility that shared office spaces offer too. One of the harsh realities businesses face when they go shopping for dedicated office space is the fact that most commercial office leases have 2 to 3-year minimum commitments. Thus, companies that anticipate doubling their headcount within the next year may face the dilemma of having to lease a smaller space now and cramming extra desks in when new staff arrive or leasing a larger space upfront and absorbing the costs of unutilized space. Coworking spaces help you get rid of all the guesswork since members have flexible contracts. Each month, they have the option to update their lease terms to properly meet their business needs, making scaling up (or down) quick and painless.
Reasons why a traditional office may suit you better
Typically, coworking spaces work best for businesses with less than 10 employees. Beyond that, it may be more conservative to find your own dedicated office. At a certain point, there are economies of scale in renting a permanent office space. Although companies incur larger upfront costs in procuring furniture and office supplies, they may save on rental expenses.
Traditional offices also help employees within an organization grow together. With a dedicated office, teams are able to create and reinforce company culture. In a private setting, coworkers are more inclined to hang out together, engage in small talk and exchange jokes.
Furthermore, companies with traditional offices have full control of their environment. Unlike in coworking offices where distractions are abundant, management can choose to set “quiet hours” or “quiet spaces” to keep productivity levels high.
Ultimately, different businesses thrive in different environments. If your current office lease is about to expire and you are curious about what life is like working in a shared office space, rent a few desks for you and your employees for a month at a local coworking office. You may find you truly enjoy working alongside hundreds of other creatives more than in a private office. Or, you may resolve to lease a new traditional office for your growing business.