We’ve crunched the numbers—here’s why the stellar growth in coworking isn’t stopping.
There was a time when any self-respecting new enterprise couldn’t wait to move into their own office. It was their kingdom, a place that screamed: “We’re open for business; we’ve made it!” But the past ten years have witnessed an extraordinary revolution in how people prefer to operate. Coworking office space—where different businesses work side-by-side, sharing facilities and leaning on each other’s expertise—has exploded in popularity.
It’s not some fad, either. The increase in coworking office spaces gets more significant by the year and shows no sign of slowing down. There are some excellent reasons for that, as we’ll see later in this article. First, we’ll explore what we mean by coworking space.
What is a coworking space, exactly?
Coworking spaces, like those offered by MakeOffices, are a shared office environment. Individuals or small groups from multiple companies share the facilities on offer—which might include hotdesking, meeting rooms, a front desk assistant, coffee and refreshments, WiFi, and other amenities.
The low cost of entry is one attraction, but today’s businesspeople appreciate working alongside other like-minded entrepreneurs. Networking in coworking spaces happens naturally, and that sense of collaboration drives creativity, positive spirit, and business growth.
Coworking space is available in almost every city in America will only expand as demand for such facilities continues to grow.
Coworking growth is just getting bigger
The first coworking space is thought to have opened in Austria in 2002. An old factory space saw a collection of consultants, freelancers, and start-up entrepreneurs gather under one roof. However, the first facility using the title “coworking space” was in San Francisco in 2005. The term was coined by Brad Neuberg who saw the business centers of the day as unsociable and stuffy, and felt working from home was unproductive. So, he set up shop in the Mission district with the help of Chris Messina, a tech whiz who invented the Twitter hashtag (you might say he was a #CleverGuy).
In those early days, the concept of sharing office space with other businesses aroused some interest and numbers began to grow. But as benefits became widely known and understood, things got a little crazy. The chart below shows how the number of known coworking spaces worldwide—as in facilities, not the number of people using them—has rocketed.
That’s an upward curve any businessperson would be proud to achieve. According to Statista, the global business data service, the current 2019 figure is up to 22,400 coworking spaces, with three million workers involved—and that is forecast to reach 26,300 facilities in 2020. There is no sign of numbers beginning to peak, and it’s reasonable to assume the rate of growth will continue to quicken.
One reason for this growth: more people are working in the freelance economy than ever before. Back in 2016, 53 million people were operating on a freelance basis in the United States. By next year, 50% of all workers will be freelance in some capacity. It’s a workforce that is seemingly tailor-made for the many benefits a coworking space offers.
The benefits of a coworking space
Firstly, we must recognize that advances in technology have played a significant role in the coworking phenomenon. Where once they needed to be hard-wired and plugged into their own regular office space, WiFi means they can now operate wherever they like, so long as they have a signal. Workers are mobile, requiring only a cell phone, tablet, or laptop to conduct business.
That ability to function anywhere has given rise to even more people working remotely—or living as digital nomads, earning as they travel wherever they like.
This freedom is an umbrella over the eight key benefits that have fueled the coworking space culture, which we’ve outlined for you here!
#1. Low-cost option to rising office rental costs
The price of renting private office space continues to rise, and in some US cities, it is prohibitive; in Washington, DC in 2017, for example, it would cost you $595 per square foot each year. That’s extreme—but even space in Atlanta, Georgia, was $239 per square foot.
For businesses just starting out, that price impacts on the bottom line at a time when spare cash is crucial for growth.
Plus, coworking office space brings all the advantages of a typical office—desks, phones, meeting rooms, utilities, refreshments, and a reception area—but at a fraction of the cost. Workers normally pay a small monthly fee to use the facilities, which is much more affordable compared to a traditional office rental.
As it increasingly tends to be younger people starting their own companies, 65% of people working in coworking spaces are under the age of 40. Millennials and Gen Z add buzz to a workplace, helping to promote a vibrant feel that seems perfectly natural.
#2. Collaboration and networking opportunities
Modern businesses increasingly value the impact of working with other businesses on a joint project. This is particularly true in the creative industries, and coworking space promotes this behavior.
In a typical shared office environment, you might have a web developer, a designer, a copywriter, and an SEO expert all working for their own businesses but collaborating on one client project. The group might then recommend a lead generation specialist who works alongside them. If one worker needs help, advice, or to bring someone into a client meeting, there’s usually someone they can ask to step in. Like anything in life, the more you put in, the more you take out. So, if you’re prepared to help others, offer free advice, and send leads to coworkers, then you’ll find others do the same for you. It’s something you’d never get sitting in your own expensive office.
Business owners pay a lot to join networking clubs, where they get to meet like-minded people and pick up work opportunities. A coworking space means you’re working alongside people who can offer new business or refer you to contacts—so a coworking space is just one big networking opportunity!
#3. Health and well-being
Large companies must take the health and well-being—physical and mental—of their employees more seriously than ever before. And while that’s all well and good for employees of organizations with the resources to provide these necessary services, people working for themselves often don’t have that support.
Although working from home has its benefits, it can be lonely. Not seeing anyone for days on end can begin to impact not only performance but overall well-being. Coworking space provides a cheap and highly effective solution. Business owners working for themselves can use a coworking space for even just a day or two a week and get the uplifting benefits of being around others, joining social activities, and meeting new people.
Plus, coworking spaces like MakeOffices go the extra mile, providing on-site classes such as yoga, relaxation and wellness rooms to shed stress, and offering complimentary beer and often happy hour snacks to help members unwind. A happier, healthier worker is going to be more productive!
A well-planned coworking space won’t be a stuffy and rigid environment like a regular office. It will also offer more structure and fewer distractions than if you work from home, where family members, television, or a multitude of other distractions are waiting to eat up your time. Instead, you’ll be surrounded and energized by other hard-working professionals, increasing your motivation and helping you to get more done in your working day.
When you’re starting your businesses, the last thing you want is to commit to a lengthy rental agreement. Coworking space generally offers monthly payment terms. At MakeOffices, for example, you can terminate your agreement at any time (with 30 days’ notice), transfer it to another MakeOffices location, or downgrade to a smaller plan.
Options also include a furnished and lockable office space of your own, an open desk policy that means you can sit wherever you feel like in common areas, or a simple day while you decide which option works best for you.
#6. A professional mailing address
Many coworking spaces also offer you the option of using the facility as your office address. This might give your fledgling business an impressive-looking downtown address. In practical terms, it’s a secure place for you to send mail and deliveries, and you’ll know there will be someone available to receive them on your behalf.
#7. A impressive place for meeting clients
If you work for yourself and operate from home, you’ll be familiar with the problem of client meetings. You must go to them or find a middle ground, like a crowded and noisy coffee shop. However, coworking spaces have meeting and conference rooms you can access, which will create a far better impression on visiting clients. Get more business done in a professional environment and reap the rewards!
#8. Learn New Skills
While networking opportunities are frequent, some coworking space providers also put on workshops that give valuable learning experiences for the freelancer or small business owner. These might cover things like how to run a successful Google Adwords campaign, or tips for bookkeeping and taxes.
And if you use a coworking space that does not put on workshops, why not seek to organize them yourself? It will be an excellent way to build contacts. A coworking space is your place to gather and get things done.
Get started: do your research
Liking what you’ve read about the growth of coworking space and the positive outcomes that have driven it? You’re probably itching to get started. Like any other business decision, take your time and do some research in your local area to find a suitable location.
A simple Google search will throw up many results, so have a good look through the facilities on offer and, of course, the price. However, the best people to speak to are those already using the facilities; people like you who will give an honest opinion about the benefits. Writing about his experience, Chase Lee, founding partner at Doxa Capital, said: “MakeOffices has let me spend more of my time and money on growing my business. I don’t have to worry about who’s getting coffee or setting up phone lines. Instead, I can focus on what matters.”
How to choose a coworking space
Here’s a simple checklist to get you started:
- Decide on a budget, so you don’t end up spending more than you expected.
- Choose a location. Perhaps you want something central, near transit, or with a great view! It’s up to you and the needs of your business.
- Select how often you’ll use your space (daily, once a week, etc.)
- Settle on the facilities you need. Extra options will cost more, and you may not use them.
- Armed with your preferences, do your extensive research
- Take a tour of a shortlist of coworking spaces. Are the owners flexible? Is there a good atmosphere? Does it present value for money? Are there extra events put on? This will be your place of work, so make sure you’ll be happy there.
Why you’ll love it
With ever more people joining the coworking space revolution, we’re sure you’ll enjoy the experience and reap the rewards. Surrounding yourself with like-minded, hard-working professionals can only inspire and drive you.
Why not join other professionals in taking your first step into coworking today? If you’d like to read more about coworking success stories, or find out more information, we have lots of interesting material on our MakeOffices blog