Is a co-working space a good environment for small business?
A co-working space is an office environment designed to accommodate different businesses and workers in the one place. Barely heard of a decade ago, co-working office spaces have become increasingly popular as technological capabilities continue to give small businesses greater flexibility in the workplace.
A co-working space is an office environment designed to accommodate different businesses and workers in the one place.
Barely heard of a decade ago, co-working office spaces have become increasingly popular as technological capabilities continue to give small businesses greater flexibility in the workplace.
This trend is expected to continue with recent research predicting the number of co-working office spaces in Australia will nearly triple by 2030, and will make up around 12% of workplaces.
For small businesses in the professional, creative, IT or other predominantly online fields, co-working office spaces are now a viable option when looking for an effective working environment.
In this article, we’ll address all the positives and negatives of co-working office spaces to help you decide on the right environment for your small business.
What are the positives of a co-working space?
1. Physical environment
By far, the biggest benefit of a co-working space is getting access to excellent facilities which would be otherwise unaffordable for a small business.
Many of these offices have undergone multi-million dollar fit-outs and renovations to create an enjoyable work environment and attract businesses. These often include open-plan office spaces, high quality fittings and equipment, outdoor areas, parking, natural lighting and amenities.
Traditionally, only big businesses with many years under their belt had the money and resources to work in such facilities. But, with more co-working popping up around the country, small business owners and workers now have more options when it comes their workplace.
As well as the physical location, co-working spaces can also offer greater flexibility with the actual location your workplace.
High demand areas such as the CBD or near train stations draw higher rental rates, which has historically pushed smaller businesses out to less convenient locations. Co-working spaces, however, are often in located in popular areas and can be an affordable solution when picking the perfect spot to work.
This brings us to one of the other biggest benefits which is the cost.
Particularly when starting out, leasing part of a co-working space can be much more affordable than renting out your own office entirely.
As is usually the case, co-working operators offer different packages to suit the size and needs of your business. Packages can start from just using a desk for a few hours a week and can scale up to having your own offices and work areas.
This flexibility can be a big help when riding the small business rollercoaster, allowing you to upsize or downsize when reacting to changes.
For small business owners like ourselves, saving on costs is extremely important and with a co-working space, you only pay for what you need.
If you have an experience similar to ours, co-working spaces are a fun and exciting environment to work in.
Whilst working from home or an empty office can get quite lifeless and dull, co-working spaces are thriving with different businesses and individuals. This kind of workplace give you a forum to interact with like-minded people, many of whom are at similar stage of their small business journey.
The hive of activity brings an enormous amount of energy which is hard to replicate in a small business.
When it comes to boosting morale, creativity and productivity for yourself and your employees, co-working spaces can’t really be beat.
This leads us to the other big advantage which is the ability to easily network with potential clients, partners and competitors within your respective industry.
For business owners who aren’t naturally outgoing people, networking events and meet ups are a dreaded chore.
However, a co-working space surrounds you with these people everyday, making it much easier to connect and build long-lasting relationships. This makes the sharing of information, ideas and referrals far more effective as it is done organically, rather than being forced in a formal setting.
What are the negatives?
1. Scaling costs
As you begin to scale up your business and take on more employees, co-working spaces do start to become less cost-effective.
Each new team member on board means a significant addition to your monthly costs, especially when compared to having your own office space.
On top of this, managing a bigger team becomes much more challenging in a busy co-working environment. Due to this, most businesses eventually outgrow co-working spaces and decide to create their own office environment once their team reaches a certain size.
Naturally, the issue of privacy may be a concern for business operating in a co-working space. The layout of many of these office spaces are open-plan, meaning that you’re surrounded by movement and chatter from everyone around you.
This can create problems when needing to take phone calls or meetings, particularly when talking with clients or discussing sensitive material. Needing to duck outside constantly or book meeting rooms ahead of time can become an increasingly bigger annoyance over time.
You will ultimately need to assess whether the burden of not being able to control your work environment outweighs the benefits of co-working spaces.
In a co-working space, you are far more prone to distraction from others which can hinder productivity for you and your staff.
Typically, these spaces are an active and noisy environment with the potential for many disruptions to your work day. At times, being surrounded by chatty friends and peers will feel more like being in high school than in the workplace.
Efficiency is crucial to output, so distractions can ultimately encumber your ability to run a business. Building your own work culture grows in importance as your business matures, so choose an environment that aligns the closest with your goals and needs.
To hear about our experiences and a thorough discussion on co-working spaces, listen to our Elephants on Business episode below or on your podcast app.
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Elephant Advisory is an accounting and mortgage broking firm based in Melbourne, with a successful history of helping our clients achieve their goals. With a little help from us, you'll be prepared to make the right decisions for your business or property journey, avoiding many of the potential mistakes along the way.