How Co-working Spaces Help Startups Bloom

by | Apr 15, 2019 | Uncategorized | 0 comments

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How Co-working Spaces Help Startups Bloom

How do you find a place to not only run your startup business but also meet your customers? A place with comfortable meeting rooms at a low cost? Or a place where you will be surrounded by a variety of opportunities and experts? Co-working facilities provides low cost office space that can cater to a variety of needs for your startup business.

You plan to create a startup and you hire experts to develop your business. Now, you have employees and need a place to work. You want to design a creative office space like Google or Facebook that will stimulate ideas but your budget is limited, so what options do you have?

Consider a co-working space.

Co-Working spaces are communal spaces where startups, freelancers, and people who travel frequently can share workspace, allowing them to work together and interact socially. In the Bay Area, there are many startups that don’t own their own offices due to large barriers to entry such as high costs. Those startups, especially early adopters (see figure 1), who are taking risks in new technology, need flexible spaces and organization to develop their business. A co-working space can potentially meet these startup needs.

(Figure 1)

For small business, especially startups, co-working spaces provides four main benefits that can help a business develop.

1. Co-working spaces offer opportunities for interaction with other entrepreneurs.

Many entrepreneurs who want to establish and grow their networks can choose to work in co-working spaces. These spaces offer a stage for entrepreneurs to share their ideas and expertise. Through interactions in co-working spaces, people can gain a variety of perspectives and more opportunities to collaborate. For example, through chats in the communal dining rooms or working spaces, startups can gain expertise about business initiatives such as web-site design or marketing campaigns.

2. Co-working spaces offer amenities that you would likely not find in a traditional office space.

Traditional offices tend to be bland in their offerings. You need to spend money purchasing printers, tables,chairs, and other supplies, which could raise expenses, just to get the office running. But in a co-working space, these amenities are offered to all members. You could walk outside into a beautiful garden or order fresh coffee from the furnished bar. Amenities that don’t appear in a traditional office space are available for you and you’re not responsible for maintenance of the machines or the space. Co-working spaces are responsible for cleaning the facilities and maintaining the amenities.

3. Co-working spaces offer not only comfortable meeting rooms for your clients but also places to host events with low cost.

Co-working space members can reserve meeting rooms or spaces to host events. These rooms are well accommodated with professional material such as projectors and large screens. Additionally, rooms offer a privacy element to the communal environment of Co-working spaces.

Rooms can also be used to host events and workshops which are strategies startups use to raise brand awareness. In order to create successful events and good first impressions, venues need to accommodate various group sizes and be well decorated and furnished.

These rooms can be used at low costs without businesses having to invest in acquiring space and technology. Co-working spaces also simplify the search for finding usable event venues by offering convenient access to large spaces.

4. Co-working spaces offer additional benefit that lower business expenses and help startups expand

In order to differentiate from their competitors and expand their market size, some co-working space businesses provide market research and growth hacking to support their customers and assist them in promoting their companies.

Another benefit is unique to foreign startups. These companies may find co-working spaces to be a good choice instead of expensive fees for renting office space due to their short american credit history.

Perspective of organization

First, co-working spaces are cost-efficient. As a member of a co-working space, your budget will be spent on important projects rather than on buying equipment or renting amenities, which could help your business reduce the cost during the formative years.

Secondly, co-working spaces are flexible. The large space offered by Co-Working spaces allow companies to grow comfortably. Companies can choose to rent offices based on theirs size. If the companies expand they can easily shift to other offices due to the amount of employees increasing. On the other hand, if the companies perform poorly and lay off their employees, they could change to smaller office if they want. These shifts can be performed without spending large amounts of time and money in finding a new office. Additionally, companies can choose to work in a communal area or private offices. In this way co-working spaces provide a flexible arrangement for startups based on the culture and nature of their business. This encourages startups to develop their business without worrying about renting spaces that are not adapted to the companies.

Thirdly, co-working spaces make it easier for startups to test new markets. In most startup companies, more than half fail in the first four years. During this time, owning a private space and purchasing all the necessary materials is risky because the investment puts more strain on a companies financials. But these four years create a good opportunity for these entrepreneurs to realize their idea to products or service and test the market. Thus, finding an inexpensive place to begin their startups is important. Co-working spaces offer an inexpensive alternative to private spaces that allow startups to allocate more capital to testing markets and growing their business idea.

Perspective of social culture

First, members of the co-working site can communicate with professionals from different industries. In co-working spaces, professionals work with other experts in close proximity which creates a good opportunity for communication. This can help in establishing a startups network with discussions and deeper insight on issues concerning their industry or business.

Secondly, comfortable meeting rooms offer a good first impression on clients. . In general, a client’s good mood will help smooth your meeting. You could offer them coffee or tea while they sit in comfortable office chairs. Those things may not be decisive factors for your clients to cooperate with you but they could definitely prompt your clients to consider you as a potential partner because you show your respect and passion by presenting a comfortable working environment.

Thirdly, it’s possible to find potential customers and business ideas in co-working spaces. Again, you work with many experts in a communal area. It’s possible you will meet not only potential partners but customers when you expand your network.

Co-working spaces are best used by startups, freelancers, and people who travel frequently.For startups, there are mainly two types of industries that are suitable to work here. One is the technology industry; the other is design and marketing industry. Those employees in startups in the types of industries in which work can be done with only a laptop, which means they could work anywhere.

Freelancers are also potential customers for co-working spaces. People who are work-at-home professionals and independent contractors are willing to work in a communal space to find their customers. For them, expanding their network is necessary, which raises the possibility of cooperation with the startups that doesn’t have multiple departments to support them. According to Pinto, “Currently there are 53 million freelancers in the US. By the time we reach 2020, 50% of the American workforce will consist of freelancers (both full and part-time).”, we know freelancers are a large part of co-working customers.

Currently, co-working spaces are a rapidly growing business, and the market is increasingly competitive. Therefore, co-working spaces companies are differentiating to attract customers in different industries beyond technology or design and marketing industries.

For example, The Port workspaces is a typical co-working spaces providing not only communal spaces but also private offices to meet startups’ needs. With privacy, those startups that work with confidential information such as law firm could also rent the private spaces. In fact, Charmie Warner, of The Port Workplaces in Oakland, states that “ Our company provides four buildings to run co-working business. Each building has its unique function. One is for private office and public social spaces, the rest of building are for communal working area.

The Port workspaces also provides 3-D printers, a bar, a 2,400 square foot commercial kitchen facility and a playground slide for their customers. According to Warner, “Here, you could drink with someone, you could host a cooking workshop, you could use 3-D printers to produce your phototypes. If you feel exhausted, you could use a playground slide to inspire your idea. We have many customers in a variety of industries including non-profit organizations working in our places.”

According to Deskmag, the price of co-working spaces vary in different areas. The average price of a hot desk, a large table separated into individual work spaces, in the US is $195/month and the average price for a dedicated desk in the U.S. is $387/month.

According to The Port workspaces website, the price of hot desk is $200/month, the price of team space is $300/seat, and the price of private office is based on a flexible month-to-month and 6–12 month terms basis available at a starting price of $400/seat/month. On the other hand, Nina Zipkin, both a contributor and a staff of Entrepreneur. Com, indicates that the price of renting a full private office is at least $5,000 per month “in metropolitan centers all over the U.S., from Atlanta to Seattle”. These prices are heavily influenced by property costs relative to the surrounding areas and often times it’s hard to find spaces that actually fit the size of small companies that are looking to minimize overhead. Co-working spaces build an advantage against these costs by providing a cost efficient alternative — one hot desk or a small private office — saving money on extra space. When a startups begin to run their business, it’s essential to choose a place to work that minimizes expenses without compromising productivity.

Co-working spaces first appeared in 2005, and the market size has increased dramatically in the past 5 years. In 2018, there was a reported 18,900 co-working spaces worldwide. Now that the market has matured and become more competitive, co-working spaces have increased the number and types of amenities they provide, including commercial kitchens, 3-D printers, playground slides, and bars. Many are professionally decorated and provide a variety of facilities to their customers. In my opinion, the co-working space market will increase gradually in the next 3 years because the market will be saturated At the same time, those exist co-working spaces companies will provide more facilities to inspire people when they work in the companies such a gym. Also, co-working spaces businesses may encourage startups to begin their business to expand the co-working spaces market with expertise in different fields, such as market researchers, financial consultants or legal consultants. From startups’ view, it should be a good news in the following years.

A Co-Working space is a communal space where startups, freelancers, and people who travel frequently work together and interact socially. It offers opportunities for interaction with other entrepreneurs, provides comfortable rooms to meet clients and spaces to host events or workshops, and offer cleaning services and maintenance of amenities.

Co-working spaces can also be a very good investment for startups that are looking to lower costs in order to comfortably grow their business. It helps startups reduce cost of working space to achieve break even points easier.

In the next three years, the market for co-working spaces will gradually increase. In order to attract their potential customers, it is likely that co-working spaces businesses will begin to offer more support to encourage startups to run their businesses, which may lower the barrier of launching a startup.

This article has been published on Business Review at Berkeley

How Co-working Spaces Help Startups Bloom

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