For start-ups, small business and even freelancers the idea of an affordable yet flexible office space with services thrown in is a good reason for more than 1.2 million people to join the wagon of the Co-working phenomenon by this year end.
Co-working has grown so big that now it’s coming in different flavours, co-living anyone, women only co-working, sector specific co-working centres. Even the hotels which are sitting pretty on idle assets are now succumbing to its lure.
If co-working, in its varied avatars, is increasingly a rite of passage for the start-ups and entrepreneurs, the question arises: What next after co-working?
For the entrepreneurs who have seen their companies evolve from teams of two to teams of 10 and beyond, they face a compelling choice. At what point in your expansion plan, do you call time on your co-working experiment and seek a permanent work 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 the managing director of an SEO agency.
For him, the sore sticking point in co-working experience was that he had to be extra careful of who might have or would overhear a sensitive conversation. While the “co” in co-working is arguably its biggest benefit for the early stage startups who are prospecting for talent and clients, it’s also a confidentiality minefield.
While he appreciates that having his own office allows him to work on his own company culture, 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.”
Arguably the single most common reason for leaving co-working is growing pains. Apart from f the physical constraints, getting too big for your britches can often draw unwanted attention.
“At my first co-working space, we were told we were dominating the shared space too much, and needed to rent our own office," says the CEO and founder of Sacramento-based Marketing agency. “That presented a space problem once I hired my second employee, so I moved to another nearby co-working office, where we ran into the same issue. Once you hit the point of
having a couple employees, co-working spaces simply don't work anymore.”
While others may beg to differ that two is the breaking point for having an own space, by having a bigger team, suddenly the benefits of having your own space becomes more and more alluring.
“When we hired our tenth person we realized it might be time to find a dedicated space,” says, the founder of an Ad Agency. “With a team of twenty now, we absolutely made the right decision, bringing on our other employees as soon as we acquired our new space.”
Co-working tends to conjure up images of free-flowing beer on tap and ping pong tables, anything goes “startup” culture. Which frankly, isn’t for everyone, right?
“The co-working 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 their new 1000-square-foot office space in the suburbs the Ad Agency founder and his team have settled into their own groove.
“Things felt temporary and too startup-y in the co-working space,” says he. “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, the startup atmosphere and like-minded community that co-working 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 another founder of a media agency. “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.”
“Co-working definitely influenced my company culture,” says another founder. “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 he credits it to the co-working’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.”
Doing the math: How much does co-working save?
At a certain point, co-working members with growing staffs and growing businesses have to decide when saving money by working in co-working in hampering your growth plans, and you start figuring out on moving on.
If a dedicated desk in a New Delhi at a co-working den costs Rs 15,000/ month, and you need ten desks, that’s Rs 150,000/month. When you consider that at Rs 200,000/month, you could get a private office of around 2,000 square feet to call your own, co-working starts to make less fiscal sense.
Having an Own Office
Moving into your own office certainly has its own drawbacks. After salaries, office rent is generally a business’s largest operating expense. Moreover signing a 5 year lease on office space is predicated on the idea that your business will continue growing long enough to justify the investment, the growth is not guaranteed, as any business owner knows.
The ideal scenario for any business too big for co-working is a space they can grow into for the years to come.
That's the scenario a communications & media company finds itself in. “We found an office rental which gives us room to grow, one suite on a floor with the First Right of Refusal as our growth continues,” their CEO says. “It’s been ideal for us.”