Life After Coworking: How Do You Know When It's Time to Find Your Own Office?
You know it’s a platform when people start using it in ways you didn’t anticipate.
The “it” in this case is the coworking phenomenon.
For early stage startups and small businesses, its offer of flexible, affordable workspace in trendy environs is reason enough 1.2 million people are expected to be coworking members by the end of 2017.
But, coworking has now infiltrated other industries in ways that, like the best Hollywood endings, are both surprising and inevitable. Take the food services industry. During their off-hours, restauranteurs and bar owners are renting their dining spaces to digital nomads looking for work space and WiFi in a less zoo-like atmosphere than your typical WeWork. Coworking also has sequels and spinoffs, like co-living, wherein groups of people pile into rentals commune-style to save on rent, collaborate and build on their networks.
If coworking, in its many forms, is increasingly a rite of passage for the entrepreneurial living in dense urban centers, it must be asked: What comes after coworking?
For the entrepreneurs who see their companies evolve from teams of two to teams of six, 10 and beyond, they face a compelling choice. At what point do you call time on your coworking experiment and seek a private space of your own?
“When it came time to hire my first member of staff, I knew it was time to move into my own office,” says Steve Bouchard, managing director at SEO agency It Works.
For Bouchard, a sticking point in an otherwise pleasant coworking experience was that he had to be careful of who might overhear a sensitive conversation. While the “co” in coworking is arguably its biggest benefit to early stage startups prospecting for talent and clients, it can also present a confidentiality minefield, one a private office space mitigates.
While Bouchard appreciates that having his own office allows him to build the kind of company culture he’s always wanted (“We have the radio on, which certainly wasn’t allowed in the coworking space,” he offers), the freedom to communicate without paranoia is a surprisingly big deal. “We aren’t worried about who might hear our conversation on the phone because we’re all working for the same business, so everybody knows everything anyway.”
Outgrowing the space
Arguably the most common impetus for leaving coworking is simply outgrowing the space. On top of the physical constraints, getting too big for your britches can draw some unwanted attention, too.
“At my first coworking space, we were told we were dominating the shared space too much, and needed to rent our own office," says Chris Post, CEO and founder of Post Modern Marketing, a Sacramento-based agency. “That presented a space problem once I hired [only] my second employee, so I moved to another nearby coworking office, where we ran into the same issue. Once you hit the point of having a couple employees, coworking spaces simply don't work anymore.”
While some might beg to differ that two is the breaking point for venturing elsewhere, anything more than that, and the benefits of your own space become that much more alluring.
“When we hired our third person we realized it might be time to find a dedicated space,” says Damon Gochneaur, founder of Aspiro Agency. “With a team of six now, we absolutely made the right decision, bringing on our fifth and sixth employees as soon as we acquired our new space.”
Coworking tends to conjure images of beer on tap and ping pong tables -- signifiers of relaxed, free-flowing “startup” culture. Which, frankly, isn’t for everyone.
For Gochneaur, the whole coworking vibe was a bit too caricature. “The coworking experience only reinforced our feelings that our own space was critical for truly building a team and a culture that was organic, not contrived.”
With his new 400-square-foot office space in Denton, Texas, Gochneaur and his team have settled into their own groove.
“Things felt temporary and too startup-y in the coworking space,” Gochneaur says. “We've been in our new space for roughly six weeks, and we've already seen a marked increase in communication, productivity and most importantly employee satisfaction.”
For some, like Smirk Media, the startup atmosphere and like-minded community that coworking provided was a boon in the early days.
“The atmosphere of that space was beneficial to the few of us who were just starting out,” says Mike Koehler, Smirk Media’s founder and chief strategist. “There was a good mix of newbies and long-time freelance professionals, so there was room to talk about common problems and issues with clients. With different skillsets and services, we were also able to share referrals or team up on proposals for clients who wanted varied services.”
Post cites a similarly positive experience of coworking culture, going as far as to emulate it at his own company.
“Coworking definitely influenced my company culture,” says Post. “In particular, we have a really accepting open door culture, and we're very flexible about working with independent talent in our area and even giving them in-office space to work at that they otherwise couldn't afford.”
As for the planning of his office’s physical space, here, too, Post credits coworking’s influence.
“We have a lot of secondary work areas, so our employees aren't just stuck at their desks; they can go work at another desk, find a quiet room for a phone call, or take their laptop and hang out on the couch. It's not nearly as regimented or inflexible as many offices are.”
The math: How much does coworking save you?
At a certain point, coworking members with growing staffs and growing businesses have to make a more crude calculation about when it’s time to move on: the point at which it stops saving you money.
If a dedicated desk in a New York coworking den costs $450 a month, and you need eight desks, that’s $3,600. When you consider that, at $5,000, you could get a private office approaching 1,000 square feet to call your own, coworking starts to make less fiscal sense.
Moving into your own office comes with its own drawbacks, of course. After work wages, renting an office is usually a business’s largest operating expense. And signing a multiyear lease on office space is predicated on the idea that your business will continue growing long enough to justify the investment, an outcome far from guaranteed, as any business owner knows.
The ideal scenario for businesses too big for coworking but not so big that they re-adopt coworking to supplement their main office hubs, is a space they can grow into for years to come.
That's the scenario Smirk Media finds itself in. “We found an office rental which gives us room to grow, one suite on a floor with first right of other offices as our growth continues,” Koehler says. “It’s been ideal for us.”