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Justifying Coworking As an Investment

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coworking spaceCoworking is a great trend, one that is taking root in even the most unlikely of soil, including areas where it has a chance of making a big difference, like Detroit. For freelancers and small startups, a coworking space provides a great opportunity to work with others, and to have office space to show off when a client comes calling, without incurring the cost of a more permanent lease.

But coworking doesn’t come with zero cost, unless it’s done on the very small scale of inviting someone into your own home, or being invited into the home of another. You could also try meeting at somewhere that doesn’t charge beyond the price of a coffee, like a Starbucks, but how reliable is that really? In a big city, space is at a premium, so there’s no guarantee there’ll be room to meet there. So the question is, is investing in proper coworking space worth your while? How and when does it become a justifiable expense?

Step 1: Identify What You Have to Gain from Coworking

I’m not talking about the good feeling and sense of camaraderie you miss from your days working in an office setting, although you should feel free to list that, as well. It may not have a tangible monetary effect, but it will help with morale, which is always important.

Putting that aside, though, what are you intending to get out of coworking? Have you spoken to others who’ve tried it, and attempted to gauge the actual impact it’s had on their business? Maybe what you’re actually looking for is meeting space for occasional use, which is something else entirely and can be had much more cheaply.

If you are looking to build meaningful professional relationships, the kind that can’t come from email exchanges and the occasional lunch, then coworking presents a tangible benefit. If you need your company to have a public face, and one that exists in a brick-and-mortar sense, and you need that consistently, then coworking presents an attractive proposition. If your working hours are interrupted in consistent and unpredictable ways at your home office, damaging your productivity, then coworking could help.

Step 2: Assess the Risks and Costs Associated with Coworking

Once you know what you want to get out of the deal, carefully examine what it will cost you to get it. Depending on how long you’ve been working remotely, you may be in for a surprise at what a return to the commuting lifestyle will actually run to, all told.

For example, where is the nearest coworking venture in your city? Does your city even have one? (We won’t address the costs of starting your own at the moment.) Will you have to take transit, or do you have your own transportation? Just getting to or from your new office could represent a significant additional cost that your usual budget doesn’t include.

Workspace rental fees is another cost associated with coworking. For example, one near my home in downtown Toronto charges $350 a month for office space that’s accessible 24 hrs, with some meeting room time included. It’s $75 per work day if you don’t need the freedom of 24/7 accessibility. For many of us, those aren’t costs that our working budget can easily absorb.

Step 3: Make an Informed Decision

Once you have all the variables on the table, you still probably won’t have a very cut-and-dry choice. At least you’ll be informed, though. The more you focus on the hard benefits and costs associated with coworking, and the less you focus on your desire to socialize or try something new, the better. If all else fails, work out a set term for an initial trial, and then do a rigorous follow-up analysis to see if it’s economically tenable in the long run, and, more importantly, if you got some tangible benefit, enjoyed it and remained productive.

Photo credit: hyku on flickr

20 Responses to “Justifying Coworking As an Investment”

  1. I was lucky enough to find a fantastic coworking co-op a block from the place where I do most of my scheduled work. I’m a stenographer for Deaf students, so I transcribe their classes in realtime, then head over to my coworking space to edit the transcripts and do some transcription work, go back to the university for a few more classes, et cetera. I’m in and out several times a day, and the space has just been fantastic. I had cheaper options, of course; I could do all my work in the nearby McDonald’s, paying $3 for every two hours of internet. That would work out to about $96 a month. I could also get one of those portable broadband cards, trickling out the internet while I did my work in the rather unwelcoming University Library. But $200 a month gets me unlimited coffee, a fridge to store tasty healthy food and a kitchen to cook it in, a nice desk in a lovely space with 24-hour access, charming coworkers, and fantastic efficiency in getting my work done. I can’t live without it.

  2. I’m the cofounder of a shared office space in New York City, and we charge a starting price of only $275/month for all inclusive coworking space, and $375/month for dedicated space. This includes month to month terms, free fax, scanning, copying, printing, conference room, internet, receptionist, etc. These amounts have limits with a very reasonable price if you go above the free allotment.

    I truly believe that if the manager of the space is doing his job correctly, being in a coworking space should easily pay for itself within a couple of months. We focus on making sure the companies in our space all meet each other and get business and referrals from one another. Currently we host around 3-4 events per week – anything from our Sunshine bowling team to educational events and speakers to our weekly networking lunches. All these events are designed to make sure the people in the office (over 1,000) all get to know each other.

  3. Hi, Thanks for featuring a photo of Citizen Space (San Francisco) in your article for people considering coworking. (It’s a photo of our older space, we’re in a 3,500 square foot place now).

    I’m the part time manager at Citizen Space (and a graphic designer). Here are some of the benefits of coworking I’ve noticed since I’ve become involved (my personal opinions):

    1. Disciplined work space. It’s not your home, it’s not a coffee shop. You are surrounded by other people who are also working and there for the same reason. You see other people focused, taking breaks, focusing again, and it generates a work momentum.

    2. Community. You work with a group of people that you see on a regular basis to bounce ideas off of, take a coffee break with, feel accountable with. The “see you tomorrow” said at the end of the day goes a long way. I’ve never said that to anyone in a coffee shop.

    3. No office politics. It’s great. Since no one shares the same boss, there is no gossip or jockeying for power that can happen in some office situations. We are all our own bosses in that space.

    4. Responsibility. Independent workers respect each other and each other’s time because they know what it’s like to work on their own, be meeting deadlines, acquiring clients, balancing expenses, etc.

    5. Investment. Yes, coworking spaces cost more than a latte and a scone. The people I work with are well aware of the investment they make in themselves by choosing to pay for a coworking space and I think it creates a dialogue with yourself. The, “Hey, my work/dreams/startup/sanity is worth this and I am going to prove that”. Some folks are more established in this investment and some are up for the challenge of proving to themselves their work is viable.

  4. A coworking space is a combination of both – social and office. And yes, the math is usually something like $25 – $30 for a day pass but $17.50/day for unlimited use. Having a space to have professional meetings with clients is a huge benefit and it is a great way to find space for a company that might be growing from 1 or 2 employees but not quite ready to sign that long term lease.

    And for the social, it is definitely a place to make job and business connections. In some there are events, socials, and even a step further with round table discussions and strong ways to utilize the community to grow your professional or business needs, which frankly, in this economy everyone needs. Also, if you usually work as a one person company, it’s a great space to brainstorm ideas and have live feedback and discussions, which ultimately helps you as well. I find the people work in a bubble (i.e. at home or Starbucks) are not just lonely but they don’t have that constant support and team effect that really isn’t a dollar amount but ultimately benefits themselves and their business or professional growth.

    • Yep, I think the synergistic benefits of coworking spaces (meeting new people, and the opportunities that arise just from being in the same space as other creative, likeminded people) are going to be pretty hard to quantify to make a justification, but could could be the most valuable aspect by far.

      • For me, investing in coworking is the best business decision I have made in my (albeit short) freelance career. I gave up on a previous spell of freelancing because I found the isolation of working from home too harmful to my sense of wellbeing.

        Having returned to freelancing for a second time I resolved it would only work if I made efforts to overcome this major obstacle. Coworking proved to be the answer.

        I’m lucky in having a very cheap (£70 plus tax per month) space in my home city that is well equipped and highly professional. But I would be prepared to pay more, as coworking has enabled me to grow my professional network, increase my opportunities for work and provided me with a much improved quality of life.

  5. It seems pretty hard to justify using a co-working space unless you use it as a social gathering place as well. You’re not really fooling anyone by pretending it is your office. Wireless is everywhere so you don’t gain much that way.

    What I’ve seen in my local shared workspace is that it became a place for networking and hanging out more than a substitute office. It had kind of an incubator effect where people would bounce ideas off one another and look to make deals. Sort of Starbucks without all the fancy coffee. The best thing for me was the conference rooms so you could hold an actual meeting with an overhead projector.

    Unfortunately the owners ran out of money and had to close. So it is back to the coffee shops and cafes for many people. I think they’ll survive.

  6. No offense meant, but I think your math needs to be revisited. You refer to “a downtown Toronto center that charges $350 a month for office space that’s accessible 24 hrs, with some meeting room time included. It’s $75 per work day if you don’t need the freedom of 24/7 accessibility.”

    There are from 20 to 22 workdays in a month. If we assume 20 workdays a month, then each day costs $17.50 a day, not $75/day.

    • I think it’s likely (as at many coworking centers) that there are two levels of membership: it’s $75 if you pay per day and don’t need 24hr access, but $350 if you’re a full member and pay per month (and then get 24 hr access)

  7. Fantastic blog entry with good angles, thank you.

    The company I co-founded, Office Divvy, is now providing free coworking time slots in a structured schedule for the months of November and December of 2009. We’re doing it as a much needed community service in Palm Coast, FL, to invite entrepreneurs, creative folks, technology telecommuters to work, co-work, and network in a modern and productive environment. We even throw in free coffee, sodas, and water.

    I believe that the winners in this new economy will be those who know how to address the problems posed by scarcity of resources.

    A professional coworking space may require a paradigm-shift in the way one conducts business, but it can be a tremendous solution to one’s current overhead and professional development, and will positively impact the bottom-line.

    A tip of the hat to all professionals and pioneers who value coworking…

    Ky Ekinci
    Office Divvy
    on the web:

    PS: There is a good CoWorking Map by google showing all locations with professional coworking facilities: