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Small Business

Managing Your Business

The Unexpected Benefits of Coworking Spaces

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We're increasingly living in the era of the "solopreneur," independent workers managing their own careers and office environments. Today, a flexible work location is often more important than an impressive, personalized office. That's why more workers and small companies are turning to coworking spaces — where individuals or small teams rent desks or offices in a shared workplace.

"The environment of work is changing," says Zoltan Szalas, a co-working expert. "Workers are seeking flexibility and meaningful work over traditional career paths." A decade ago, there was weren't many coworking spaces in the US. Now, according to the Commercial Real Estate Development Association, there are 781.

And as real estate prices in major cities continue to rise, business owners, especially startups, are seeking ways to liberate themselves from legacy financial burdens, like a commercial lease.

"Renting office space used to mean a business owner needed good credit, and the capital to rent and furnish a longtime lease," says Szalas. "They'd also have to predict what their growth would look like over that time. Now, anyone with a credit card can rent desk space and access conference rooms on the same day."

Cost savings to business owners extend beyond that of a lease, of course. Who wouldn't love the perks of free coffee, tea, fruit, beer, and food offered by many co-work spaces? (Well, "free" in that they're included with monthly rent.) But all sorts of overhead costs decrease, benefiting the bottom line.

"Having set up start-up offices in the past, I recall assembling desks," says Andrea Lewis, managing director at Ad Hoc Global, a UX agency. "Coworking spaces eliminate many of the one-off or set-up costs like phone lines, broadband, and, in some cases, a receptionist. Using shared services, we can bundle these costs within the overall co-working fee."

Still other perks provide access to professional and educational services for accounting basics and HR. But most business owners who use coworking spaces praise the economic advantages they realize by being in an environment with other, like-minded people.

"I think there is an opportunity cost of working from home," says Amanda Aguirre Allen, whose law firm operates out of a cowork space. "When you are out of sight, you are out of mind. It is important to build a network and community, and co-working allows you to do that while maintaining the independence of entrepreneurship."

Coworking, Networking and Creating Opportunity

For Brian Foley, CEO of Buddytruk, a truck-sharing company that aims to make moving easier, this proximity to others has eliminated his cost for finding service providers. "At a coworking space, you're jammed packed into a floor with 100+ other businesses and startups, all trying to grow," he says. "Without having to walk more than 20 feet, I was able to find our first lawyer, an outsourced CFO, our first developer and a PR firm — not to mention our first group of customers."

Such networking has made a big difference for Laurie Davis. She started New York City-based eFlirt five years ago, but didn't join a co-work space until 2015. "My team and I have always worked independently and remotely, but we were craving more face time," she says. "Now, at coworking spaces, not only does it give us more in-person time together and inspiration, but it allows us to grow the business at the same time through networking."

Davis has taken advantage of the networking opportunities and closed thousands of dollars of new business. To bring in the number of leads required to close that amount of business is nearly incalculable on her balance sheet. When she was operating out of a coffee shop, her workspace yielded only four clients.

"I know it's only the beginning of client acquisition through coworking," she says. "Just like any community, the more active you are, the more you get out of it. So the more we show up and have meaningful discussions with others, the more we'll be able to both give and get from the community."

And with 35 percent of the US labor force classified as independent workers, a number expected to rise to 40 percent by 2020, shared workspace will continue to evolve. Already, coworking spaces are increasing their value proposition by offering niche services like recording studios, green screens, and 3D printers. And shared creative and hardware labs are making it increasingly easy for small businesses to offset risk and, possibly, throw away their office leases forever.

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