Considering a move beyond the home office or local coffee shop to get your work done? Coworking spaces have become a primary provider for small businesses and freelancers seeking professional settings for focused work and valuable connections within the local business scene.
Here are some of the pros and cons of these shared workspaces and how they operate.
What is coworking?
A coworking arrangement is essentially an employer-agnostic office. Self-employed professionals and workers from different companies can all come to the same space to do their individual jobs. Think of people setting up their laptops to work in a coffee shop, but in a more traditional office-style setting.
Coworking spaces may have different layouts, setups, and membership options, but they are typically characterized by a set of simple bring-your-own-device (BYOD) workstations and shared amenities like internet access, kitchenettes, and printing services. There’s also not a set employer size requirement—both individual freelancers and large companies that employ thousands can join a coworking space.
The precursor to modern coworking started in 1995 in Berlin as a “hackerspace.” The movement evolved and grew in the early 2000s and significantly accelerated in the aftermath of COVID-19. Today, a growing number of large companies continue utilizing coworking to reduce costly office space while promoting a “work-from-home” office culture.
[Read more: Startups & Legacy Brands Monetize the Pain Points of Remote Work]
Benefits of coworking
Coworking spaces offer more than just a physical space to work; they unlock real advantages for small businesses, such as:
Flexibility
The primary benefit of a coworking space is flexibility. A coworking space typically has a variety of different office and desk layouts that workers can reserve based on their individual work requirements. Since office spaces are typically shared by numerous individuals and teams, a business can simply adjust its coworking plan to accommodate a shrinking or expanding number of teammates, therefore only paying for what they need.
Sense of community
The foundation of a “company culture” used to be the face-to-face interactions between employees and the community they formed in the office. In today’s remote-first world, this can be harder to achieve when colleagues are all working in their own isolated spaces.
A coworking space helps employees replicate that sense of community they may be missing in the virtual workplace. A coworking space allows workers to interact with like-minded individuals and those with different perspectives for a well-rounded experience.
Opportunity for networking
A coworking space is a social environment, and the ability to mingle and share ideas with fellow workers inevitably creates meaningful connections. To start networking in a coworking space, offer support or trade services in a casual conversation. Keep it as light and friendly as possible, and don’t push sales too hard or force conversations—this can turn connections off.
Still, workers have an opportunity to keep an open mind when meeting their fellow coworking members. A simple problem-solving conversation can quickly turn into a business opportunity, and a casual working relationship can develop into a strong friendship.
[Read more: How to Network With Other Entrepreneurs]
Increased productivity and creativity
Professionals often find the most creative solutions by interacting with different people. New thought processes and unique perspectives are a significant benefit of working around a multitude of teams in various fields and industries.
Some workers are more motivated when the people around them are productive and rely on a fast-paced office environment to ensure their deadlines are met. According to a Business.com survey, nearly half of coworking professionals reported improvement in work skills, work quality, and productivity.
Lower costs
A coworking space allows companies and workers to share common business expenses. Coworking participants can share reception services, internet, printers, desks, computers, break room space, and bathrooms. Since the prices for these services are shared, the quality of the office space can be greatly improved for a fraction of the price. Why work in a dingy office when you can work in a spacious modern location?
Since coworking space is not a long-term real estate lease, the coworking space has to remain attractive to tenants. Therefore, property repairs are more frequent and timely, locations are centralized, and parking should be accessible.
Potential downsides of coworking spaces
While coworking spaces offer numerous benefits, they also come with potential drawbacks. Here are a few to keep in mind:
- Lack of complete privacy. Open-plan layouts, while fostering collaboration, can often mean less privacy than a traditional office. Sensitive conversations or focused, heads-down work might be challenging in this environment.
- Potential for distractions. The social interactions that make coworking appealing can also be a source of distraction. Noise levels and general activity may interrupt concentration.
- Limited customization and branding. Unlike having your own office, you typically have less control over the coworking space and its branding. This might not be ideal for businesses that prioritize a visual identity.
- Dependence on shared resources. You'll be relying on shared internet, printers, and meeting rooms, which could occasionally lead to slower speeds or booking conflicts. This requires flexibility and a willingness to adapt.
- Greater expenses. While often more cost-effective than a traditional lease, the monthly fees for coworking can add up, especially for multiple team members. Remote work eliminates these costs entirely.
The primary benefit of a coworking space is flexibility. A coworking space typically has a variety of different office and desk layouts workers can reserve based on their individual work requirements.
How much do coworking spaces cost?
The cost of coworking spaces varies considerably. On average, a desk in the United States can range from under $100 to over $600 per month. However, it all depends on your location. Expect to pay more in major metropolitan hubs like New York City or San Francisco compared to smaller cities or suburban areas.
The type of membership you have also significantly impacts cost. “Hot desks,” offering flexible access to shared spaces, are typically the most budget-friendly. Dedicated desks, on the other hand, provide a consistent workspace at a higher price point. Private offices are the most expensive, as they offer the most exclusivity and, oftentimes, branding opportunities.
Furthermore, the amenities offered can influence costs. Spaces with premium features such as meeting rooms, high-speed internet, printing, cafes, and networking events generally have higher membership rates. Commitment length can also play a role, with longer-term agreements sometimes offering discounted rates. Small businesses should carefully assess their needs and budget to find a coworking space that’s right for them.
What to consider when choosing a coworking space
The right coworking space for you will depend on your business’s needs and individual circumstances. Here are some key factors to keep in mind before signing up for a subscription.
Location
One of the first things to consider when finding a coworking space is the location. Do you want a location central to your team members? If you meet regularly with clients, you may prefer to choose a coworking space near their offices. Even though you may see this as just a coworking space, it will be an unavoidable part of your business presentation to your clients. Make sure you like the area or you may have wasted money and resources on a space you never utilize.
Amenities
A coworking space most likely has more to offer than an empty room with four walls. It’s important to take into account the maintenance, Wi-Fi, printer, security, lockers, heating and cooling, power backup, and cafeteria that may or may not be included in your package. All of those amenities will also factor into the price; you may want the most bang for your buck or you could prefer to prioritize the offerings most important to you.
Office environment and atmosphere
It’s no secret that an office’s atmosphere will have an effect on the people working in it. Do you want a space that feels more comfortable or do you prefer a professional feel? Is the space particularly noisy? Even if something seems small, it can become a nuisance if you’re experiencing it all day.
Flexibility
Workers everywhere are openly prioritizing flexible working locations and hours, and more workplaces are offering hybrid work options than ever before. When considering a coworking space, familiarize yourself with the location’s hours as well as where you can work within the space.
Privacy
Socialization and networking are important in every workplace, but they can sometimes get in the way of actual work. If you want to minimize socialization, you may prefer a coworking space with separate offices for each business. If networking is important to you, you might want a space geared towards building community.
Internet speed
Internet is a must-have for every office—it may even be the reason you can’t successfully work from home. Slow internet can make even simple tasks tedious ordeals and cause you to look unprofessional in video meetings. When choosing a coworking space, make sure to ask about, or even test, the speed of the internet.
[Read more: 6 Services Your Local Business Can Offer Work-From-Home Employees]
Security
Although you know and trust your own team members, coworking spaces introduce other companies and individuals as well as the coworking management team. Some coworking spaces offer locked-door offices for small teams to give you peace of mind. You may also want to consider things like security guards or card access into the building itself.
Budget
The budget for your coworking space will need to include the cost of membership, any additional costs, the price of the equipment you’ll bring with you, and the costs of commuting. Coworking spaces will incorporate the costs of maintenance, IT support, power backup, air conditioning, and furnishings, which can save you a lot of money and time, especially if your business is just starting out. See if the coworking space you’re considering offers a trial period.
Ease of commuting
Just as important as the location for your coworking space is the ease of commuting there. How long will your and your team members' commutes be? City locations may be pricier, but will likely have the benefits of connectivity and easy commuting.
Extra costs
After you’ve carefully crafted your budget, you should verify any additional costs with the coworking management team. Some places may charge extra for the very amenities that drew you to them in the first place: kitchens, meeting rooms, and lockers, for example. Extra costs can quickly turn your dream coworking space into a nightmare for your budget.
Top coworking spaces for small businesses
For small businesses seeking flexible and community-driven workspaces, here are some of the top coworking spaces to explore:
- WeWork. As a major global player and one of the most recognized brands in the game, WeWork provides diverse workspace options, from shared desks to private offices. With a presence in numerous cities worldwide, they offer flexible memberships with pricing varying by location and plan.
- International Workplace Group (IWG). This umbrella group, which includes brands like Regus and Spaces, offers an extensive global network of professional workspaces. Catering to various business styles, IWG provides options from traditional offices to collaborative coworking environments, often appealing to those seeking a balance of professionalism and flexibility.
- Industrious. Known for its focus on creating upscale and productive workspaces, Industrious cultivates a more mature and professional atmosphere. The company offers a range of solutions, including private offices and coworking memberships, often attracting established small businesses seeking premium amenities and flexible terms.
- Knotel. Knotel offers flexible office space solutions, including customizable private offices and coworking options for businesses of various sizes. The company focuses on providing scalable workspaces, allowing companies to adapt their office needs as they grow.
Sammi Caramela, Danielle Fallon-O’Leary, and Sean Peek contributed to this article.
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