You’ve probably heard of shared office space before, but it’s not just for solo entrepreneurs doing their own thing. Your business could actually be a good fit for sharing an office with another company. Not only could shared office space be the answer to your cash flow issues, but it could provide a number of other key benefits.
In this post we will dive deep into how sharing has helped my personal business as well as countless other businesses around the World.
Understanding Shared Office Space
When you look at the rise of coworking and shared office space, it’s clear that this trend is closely connected to improved remote technologies and an increasingly large share of self-employed workers. In fact, the growth of independent workers is reportedly outpacing the overall U.S. labor market.
What’s also interesting is that individuals are becoming more comfortable with space. Not only are office layouts becoming more open and less partitioned, but more people are being put into smaller offices with very little negative feedback. Today, the average American office has 151 square feet per worker. That number is down from 176 square feet in 2012 and 225 square feet in 2010.
Then there’s the fact that 63 percent of millennials – also known as digital natives – are just as comfortable working from mobile devices as they are from desktop computers.
When you add all of these factors together, you get a workforce that’s much better positioned to accept and thrive in unique work environments than any previous generation.
“Our overall economy is shifting toward small businesses, where there is net growth, resulting in increased demand for flexible office space,” says Andrea Foertsch, author of Workplace Innovation Today: The CoWorking Center. “Freelancers and startups now have places to work other than their kitchens or neighborhood coffee shops. The energized, motivated sense of community that coworking offers has proven its value and caught on. Shared office providers are supporting small business growth as well as flexible shifts in the use of building space. Building owners run a greater risk by not facilitating this explosion of shared office space than by facilitating it.”
Popularity of Coworking Spaces
Coworking is more popular than most people realize. One of the reasons today’s employees and business leaders like it so much is that it’s highly beneficial on a personal level. Just consider the following statistics as curated by Officevibe:
- 70 percent of people surveyed report feeling healthier in a coworking space than a traditional office setting.
- 64 percent of coworkers say they’re better prepared to complete tasks on time, while 68 percent can focus better.
- 91 percent of people surveyed have better interactions with their peers after coworking experiences.
- 90 percent of people who cowork report feeling more confident on the job, which leads 60 percent to feel more relaxed at home.
- 78 percent of coworkers are under the age of 40.
- One out of every two coworkers reports a higher income.
These statistics obviously paint a very broad picture. But they do show just how beneficial it can be for individuals to share office space. They also show that surroundinn themselves with other ambitious professionals. However, the benefits to the individual arguably pale compared to the advantages shared office space offer to businesses.
Company-Side Benefits of Shared Office Space
Managing cash flow is often one of the more challenging issues small businesses and startups deal with on a monthly basis. It’s an especially poignant issue when revenue fluctuates dramatically over the course of a year. Unfortunately, a few bad months can spell disaster and end up compromising the entire business. Having said that, anywhere your business can save money and ease cash flow problems should be carefully discussed among your team. Shared office space is one solution a lot of progressive companies are utilizing.
Without a doubt, the biggest company-side benefit of coworking is the cost savings that come with replacing the traditional office with a shared space. To fully understand this, you have to crunch the numbers and compare the two options.
While each situation is unique and will largely depend on your location and needs, almost any company can expect to see considerable initial savings and extended financial relief down the road.
Solutions to a Growing Trend
Jay Suites, one of the leading providers of shared office space in New York City, shows just how much their clients save by directly comparing the costs. Between architect and contract fees, carpeting, painting, lighting, construction labor, networking infrastructure furniture, office personnel, upgrades, maintenance and the dozens of other expenses required to get off the ground, the startup costs associated with traditional office space can amount to $50,000. In comparison, the cost of a two-month security deposit and startup fee with Jay Suites is $2,295.
On top of the high startup costs, a traditional office space in New York City costs a minimum of $15,000 when rent, taxes, utilities, and other expenses are taken into account. A Jay Suites office starts at $1,199. But do you know what the real benefit is? Instead of the 10 to 15 year commitment that comes with traditional office space, a shared space from a company like Jay Suites has loose commitments ranging from one day to five years.
Imagine the relief it would be to replace the long, expensive office lease with flexible, cost-effective shared office space. For many businesses, cash flow problems would all but disappear. But want to know the best part? The business-side benefits of shared office space don’t end with cost savings. There are numerous other advantages, including:
Something interesting happens when you and your team are surrounded by other individuals, startups, and small businesses. Not only do you begin casually interacting with these “peers,” but they start to rub off on you (and vice versa).
Shared office space is a breeding grounds for creativity. Whereas your team would be shut off from the rest of the world in a traditional office space, a coworking space gives you the chance to rub shoulders with professionals in other industries. As a result, everyone learns new skills and forges unique relationships.
Getting tied into a 10- or 15-year lease is a lot like being in an unwanted relationship. When things begin to change and you start to have new desires, preferences, and needs, do you really want to be tied down?
The wonderful thing about shared office space is that you can use it for as long as you want. Only need shared office space for the week? No problem. Need it indefinitely while you figure out your next solution? This can also be worked out. As a business owner, you can’t put a price on this sort of flexibility.
Existing IT Infrastructure
“Conducting modern business without reliable technology is an exercise in futility. For many young companies, this can be problematic; with few employees and a small budget, finding the room to pay for IT services can be next to impossible,” explains iQ Office Suites, a provider of shard office in Toronto.” Shared office spaces offer a solution to this problem, as most of them have dedicated IT support on-site.”
Not only is this a cost benefit, but it’s also a huge headache saver. When you don’t have to worry about keeping up your own network, your team is free to focus on what really matters: adding value to customers and growing the bottom line.
This benefit sort of ties in with the creativity aspect of shared office space. When you’re surrounded by different businesses and professionals in other niches, you’re naturally going to build networking relationships. In the long run, these relationships can pay off in a variety of ways. They can lead to a stronger and healthier businesses with deep roots in the local business community.
Have Extra Space?
While most startups and small businesses choose to look outside company walls for shared office space, you may have an opportunity right where you are. Already own or rent office space, but have more than you need? It’s possible that you could turn your own office into a shared space for your community.
This is obviously a totally different challenge. It requires you to structure prices and invest in additional infrastructure. But this is just an option. It doesn’t matter if it’s in a building you own or one down the street. The perks of shared office space are numerous.
Give Shared Office Space a Chance
Shared office space is no longer a taboo work setup reserved for solo practitioners and independent contractors. Entire startups and small businesses are getting in on the action and discovering the freedom that comes with coworking.
If you’re like most business owners, you’ve heard about the rise of shared office space. Naturally assume it doesn’t fit your business. But why is that? When you study the practical benefits of coworking, it’s clear that it eases cash flow problems. It provides a myriad of other perks as well – what are you waiting for?