Coworking Spaces have been present in the market for more than a decade now and the search trends suggest that it will grow beyond what anyone can expect.
If we look just a few years back, coworking was considered as a ‘movement’ or a ‘trend’, with many believing it would fade away, but at present, coworking has disrupted the real estate industry and the way people work.
Nowadays, coworking is so popular that every other office space provider is advertising itself as coworking to address the demand of the market making it difficult for the users to make a distinction among coworking space providers and business accelerators & incubators.
Wikipedia says, “Coworking is an arrangement in which several workers/individuals from different companies share an office space, allowing cost savings and convenience through the use of common infrastructures such as equipment, utilities, reception, and etc.”
At present, in major metropolitan cities, various brands are coming up with new coworking ideas and spaces every day, promoting emerging startups and businesses to adopt the trend.
The number of coworking spaces worldwide is projected to soon cross 20,000 and reach 25,968 by 2022, an increase of 42% from 2019.
But with so many options available in the market, how would you identify the perfect workspace for your business?
The most effective way to find a coworking space is to ask for personal recommendations from someone in your circle who has used a similar shared workspace before or ask small-business owners and people in your networking groups for their recommendations but don’t sign any lease without your own research. It is always advisable to have a research of your own before signing any agreements.
This blog will work as a checklist for anyone who’s finding it difficult to choose a coworking or office space.
Through the topics listed below, I’ll share sufficient knowledge and some major points in each section that will help guide you while choosing a suitable workspace for your business.
So, without wasting any more time, let’s have a look at the list below:
- Location: What would be an ideal location for your business?
- Budget: What is an ideal budget for your workspace?
- Space Calculation: How to identify your office space requirement?
- Amenities: What are the amenities that you require?
- Business plans: Why is considering future business plans important?
- Community: Why do you require a coworking community?
- Trial Period: What role does trial period play?
What would be an ideal location for your business?
Phyllis Stewart Schlafly, an American lawyer, said that ‘Location is the key to most businesses and entrepreneurs typically build their reputation at a particular spot’. Not just Ms.Schlafly but many other market experts & researches also state that choosing the right location for your workspace results in business growth.
You need to just determine your most important needs and make sure the workspace, where you desire to re-establish your business, is commutable and full of business opportunities. Majorly, the Central Business District or CBD of any city is suggested as an ideal choice for the same reasons but I would suggest doing location-based market research for better clarity. Market research will provide you with more contextual information to identify business opportunities and a better understanding of the price competition for workspaces in the locality as well.
What is an ideal budget for your workspace?
Your location-based market research will provide you with a detailed overview of the variety of options & the prices of workspaces available within the locality.
As per an article published by Inc.com, the total budget spent on workspace by Buffer in Oct’15 was 4.3% and according to market experts, any organization/startup should not spend more than an average of 5% to 10% of the total revenue on the workspace.
Based on the revenue & nature of your business, allocate a budget for the workspace keeping the cost of your preferred location in mind.
How to identify your office space requirement?
When you take an office space for your team, you would be paying charges per square foot occupied by your team. This means every square foot is going to cost you some price and that will affect your investment & budget as well.
To estimate how much space you need for your next office, multiply your employee headcount by the average square foot per employee that best fits your density needs.
To make it easier here is an average space requirement based on the density of employees in an organization:
- High-Density Organization: For such an organization, an average of 80 to 150 square feet per employee will be sufficient space. Open seating arrangements with rows of small desks and a few private offices/cabins would be recommended here.
- Average Density Organization: From 150 to 250 square feet per employee with the mix of an open cube or desk space and private offices will be better for a company with average employee density.
Coworking spaces are considered best to save cost as it tends to require less square footage than conventional office spaces and utilization of such available choices in the market will help any organization to reduce the cost of infrastructure.
What are the amenities that you require?
Coworking spaces offer multiple plans to their users where prices are listed on the basis of the amenities you pick from the menu. If you don’t pick your amenities wisely, primarily it would increase your budget and you would lack an ideal workspace & environment to upscale your business as well.
List your requirements based on the nature of your business into two categories:
- Primary requirements.
- Secondary requirements.
Primary requirements would contain the list of amenities that are most important for the growth & performance of your business & team, for example, fast internet connection, meeting rooms, 24×7 power backup, 24×7 access, IT support, etc.
Whereas, secondary requirements would be a list of amenities that would help to create nothing more than a jazzy and playful environment for your team and don’t have any direct impact on the business growth as such. For example, unlimited coffee & tea with unlimited snacks or any other amenity which is not your business demand should be placed in the secondary requirement category.
Your list will provide you with a better understanding of your business demands & requirements that will benefit you while picking an ideal workspace or a coworking membership plan without burning your pockets while minimizing the investment at the same time.
Why is considering future business plans important?
According to business theory, businesses perpetually go through the following four phases of the business cycle:
- Expansion: A business phase in which the business scales and takes on more employees.
- Peak: At the end of the expansion phase, peak phase begins where the business will not expand further until the next cycle.
- Contraction: The contraction phase in the business is marked by slower growth and decreased employment.
- Trough: It is the lowest valley of the contraction phase, where the business’ shrinkage bottoms out and the cycle starts anew.
An awareness of your company’s current phase in this cycle would help you to anticipate the ideal occupancy ratio, as well as the future stage of your business. It will also help you to forecast the required workspace as per your business phase.
A business that expects to shift from peak to contraction will have different long-term plans as well as office space requirements than one moving from trough to expansion. As a company grows quickly, for instance, the space allocated to individual employees will likely shrink and more workspace would be required and vice versa.
Why do you require a coworking community?
As per the market trends, Coworking is no more just about a physical workspace anymore, it’s more about establishing a community and culture within a workspace.
Ideal coworking spaces create enough opportunities for all the coworkers and teams to come along and socialize through the community events. Events don’t need to be just parties always with hefty investment, but it can also be as minimal as a panel discussion, or any activity that creates a unique sense of community among the members and bring them together.
Community events provide every business/individual an equal opportunity to meet professionals from different backgrounds and expand their business network, unknowingly adding value to their current business at the same time.
What role does trial period play?
The majority of coworking or shared office spaces offer a one-day to a one-week free trial to clients. If your presumed workspace provider doesn’t offer anything as such then there is no harm in requesting a one-day trial before committing to any long-term relationship.
The trial period works as a golden opportunity to get a better insight into the culture of the workspace, allowing you to experience the services personally, assess the performance of management and identify the challenges that you may face there.
If all your queries and challenges are resolved by the management and you gain the trust that you expected from an office space provider, then you must go ahead and sign the deal.
Coworking is becoming increasingly common and popular amongst digital nomads in Asia and regardless of where the members were working previously, a significant change to a coworking space is almost always welcome – even if there are unexpected differences between both the working space environments.
Choosing the right coworking/office space is really important and difficult than deciding to move in one and I’m sure that the topics we discussed above will help you to make a better call in the future while choosing a workspace for your business.
Thank you for reading this blog and if you enjoyed it, then don’t hesitate to share.
(About the author)
Hey there, I am Sumit and I’m a Digital Marketing Analyst at Novel Office.
Novel Office is among the finest commercial office space provider based out of Bangalore and we have also extended our services to Dallas, Texas. We are the only office space provider with fully customizable layouts and coworking spaces. Our flexible contract terms have no lock-in period nor it requires huge capital deposits. We are located at multiple locations in Bangalore and Dallas.