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When Does Coworking Make Sense for Your Startup?

Chris Porteous
Chris Porteous

Sharing office space saves money, but is it the right move for your small business?

Many startup owners are hard at work trying to find an affordable workspace for themselves and their employees, but that's easier said than done these days. Partly because the real estate market is so crowded in major metropolitan areas, more and more startup owners have been resorting to coworking arrangements or sharing an office space with workers from another company who help split the bill.

More often than not, coworking makes sense for startups, but only if those in charge are familiar with the arrangement and know how to make the best of it. When does coworking make sense for your startup? Here's what you need to know about making the move into a shared working space.

Working from home isn't always the answer

Many startups begin in the home, which is only natural given that most have relatively little cash to spare on expensive offices. Just because you're crunched for cash doesn't mean you have to put up with squalid working conditions, however. When working from home isn't the answer, a coworking arrangement may be an alternative way to establish your business without breaking the bank. There are also many benefits to a coworking space that you can take advantage of outside of shared rent; shared internet services, electricity and 24-hour access, for instance, can go a long way in supercharging your startup's initial foray into the market.

The average costs associated with coworking arrangements are routinely lower than those associated with traditional business offices. This should come as little surprise, as sharing your space necessarily means that it's not as valuable as it once was before. Don't fret about your startup going stagnant because of an inability to work in shared conditions, however; many of those who rely on coworking arrangements were initially opposed to the setup but later found that it was perfect for their specific situation. Businesses that thrive through collaboration, for instance, are likely to derive immense benefits from the creative sharing that occurs in most coworking spaces.

You should still be ready and willing to survey your options, as picking the wrong coworking arrangement can have the same deleterious effects as picking the wrong traditional office. Rushing your judgment could result in your startup being confined to conditions that are too crowded or lackluster to thrive in. Always browse the office space in question before signing a lease, and don't be afraid to thoroughly quiz your potential new coworkers about their experience in that shared space before opting to join it yourself.

Some of the things you'll need to consider when making this tough choice are commute options and the availability of nearby community events. Don't forget to also peruse the availability of nearby public resources, as open spaces like libraries can offer your stressed-out employees a quiet place to work if their particular coworking arrangement becomes too hectic to deal with.

Younger employees are big fans of coworking

Startups relying on a younger workforce should pay extra attention to coworking arrangements, largely because younger employees are the thriving heart of the budding coworking industry. Millennials, in particular, are flocking to shared workspaces in droves, though even older workers often find the collaborative atmosphere of a coworking arrangement to be a refreshing change from the traditional office formats they're used to.

Why are younger people so enthusiastic about coworking arrangements? Largely because they supercharge collaboration, which is more important for youthful workers than ever before. In the midst of a knowledge economy that's constantly demanding more and more creativity from its workers, your startup employees will need to be able to pick the brains of other creative types. If you rely on a traditional office environment, you'll find your workforce siloed into an isolated, stagnant environment that's not conducive to creativity or thinking outside the box. One of the reasons that London coworking spaces have been in such hot demand is that workers there can't stand lackluster conditions that don't give them on-demand opportunities to readily share and collaborate with others.

Still, coworking arrangements don't always work out, even for startups with a youthful workforce. Knowing when, how and why coworking arrangements can backfire is essential to secure a lively workspace for your startup as you proceed into a tumultuous marketplace.

Avoid coworking nightmares

How do you avoid coworking nightmares? For starters, carefully survey the terms of your lease, as they can sometimes be subject to change, particularly if some of the workers who share your office suddenly move out and leave your landlord hard-pressed to collect enough rent to keep the lights on. You must also consider the value of membership carefully, as different coworking arrangements come equipped with varying benefits, some of which are radically better than others.

Coworking arrangements that offer constant access, for instance, are immensely beneficial to startups where the grind never stops. If your startup suffers from overworking its employees, however, giving them 24/7 access to work could actually lead to increased burnout, stymieing your ability to grow further. Office equipment like printers and scanners, as well as basic amenities like coffee also need to be provided if you expect your workforce to help you achieve your commercial dreams without revolting for want of comfort. If a landlord tries to convince you that providing such amenities would end up increasing your rent, consider a different coworking arrangement that's willing to be more hospitable.

You'll also want to consider the issue of space. Coworking arrangements are so beloved because they help you acquire a working space without breaking the bank, but that often means that you don't have enough space to expand if your startup suddenly enjoys unexpected success. Being capable of quickly scaling your operations is essential, so don't silo yourself into a tiny room that will thwart your future ambitions, even if it means saving some money in the short term. Hourly rentals can be appealing, but the truth of the matter is that they're mostly not worthy of the time, attention and limited money of most startups.

Be prepared for fewer responsibilities

Finally, you should understand that a coworking arrangement makes sense for your startup if you're looking for fewer responsibilities. Basic things like everyday office management are largely someone else's problem when you're coworking, which can be delightful for some startup owners but a serious nightmare for others. If you're a control freak and something goes wrong, consider that it may be some time before you can modify the conditions of your office to solve whatever crises spring up.

You'll also want to ensure your employees are happy, as startups that fail to provide fair wages but invest in a coworking space could lose their human capital to competitors who scoop up your mistreated employees. Don't make the mistake of thinking that a coworking arrangement permits you to ignore the needs and desires of your workforce. Search carefully for the right coworking arrangement, and soon your startup will be saving sizable sums of cash while enabling more collaboration to occur than ever before.

Image Credit: fizkes / Getty Images
Chris Porteous
Chris Porteous Member
I'm a serial entrepreneur and owner of three internet ventures, including My SEO Sucks. A contributor to ZeroHedge,, Forbes,, and dozens of other media outlets, I believe in SEO as a product. I developed a proprietary technology fueling the #1 rankings of My SEO Sucks clients. In guest speaking ventures across North American, I advocate for organic search traffic as the backbone of any comprehensive digital marketing strategy.