Coworking Trends: Small Businesses Enter the Fray
The number of freelancers and remote workers in the American workforce continues to rise. So the shift towards coworking and other flexible workspace options will continue to play a prominent role in how and where we work. And as the industry evolves, it appears many small businesses are using coworking as a competitive advantage.
NOTE: For more information about coworking in the Denver/Boulder area, contact Colony Workspace at 303-666-4133!
Exploring the Rise of Coworking Spaces
Research shows that 33 percent of today’s workforce is currently comprised of independent or freelance professionals. By 2020, that number is expected to rise to 40 percent. Many of these individuals work from home. But a growing percentage find coworking spaces attractive.
In 2018, experts estimate that 2,188 new coworking spaces opened worldwide. And 1,000 of them opened in the United States alone. This year, predictions project another 1,688 spaces will open up. And sources also suggest 696 will open in the United States. That works out to a year-over-year growth rate of 15.2 percent and 9.5 percent, respectively. And it indicates just how much demand there is for these setups. In total, an estimated 18,287 coworking spaces operate worldwide.
Check out these technical aspects of the industry. An independent analysis discovered, “A typical coworking space has on average around 80 members, working at 70 desks spread over an area of around 800 square meters (8,500 ft²). Compared to the previous year, the space and number of desks have increased by over 20% — significantly more than the number of members (+10%). Taking all extreme values into consideration, a coworking space now roughly provides 120 desks and 1,500 m² (16,000 ft²) for 160 members.”
So more people are giving coworking spaces a try. But also a larger percentage of members find coworking spaces to be beneficial in how they work. According to data published by Raconteur, 71 percent of coworking members report their workspaces positively impact the ways they engage in their work.
Remote workers find clear value in coworking spaces. And that goes for individuals freelancers and solopreneurs. For the most part, coworking spaces target this segment. Coworkers find value in being part of a community of likeminded professionals. And that proves true even when different work is being performed. But we’ve seen something else over the last 18-24 months. Coworking benefits more than just for individuals. Many small business owners and startup teams have discovered this perfect fit for their companies, too.
Thousands of independent, boutique coworking spaces have spread out across the country. And major players in the industry have become national brands. Consider Venture X. It has proven to be one of the leaders in the industry. And the company operates locations in 12 states and Canada. The West Palm Beach location hosts Startup Week 2019 in June. Brands like these continue to solidify their standing in the startup and small business communities. And more companies feel comfortable pivoting away from a traditional office setup. Instead they have embraced the perks of coworking.
The Benefits of Coworking
Scalability. Startup and small business experience ebbs and flows. Growth happens quickly, sporadically, or seasonally. A traditional office space locks you into a long-term lease with little flexibility. But a coworking space lets you scale up as needed. No penalties, fees, or commitments apply. So consider this a no-brainer.
Predictability. And small businesses operating on a tight budget find it nice to have predictable overhead and expenses. Operate out of a traditional commercial office space? You never know your costs for internet, utilities, printer ink, and other basic office supplies. But a coworking space builds everything into the monthly cost. So you agree yo this cost up front.
Productivity. Coworking spaces are designed for optimal productivity. You don’t have to worry about all of the administrative tasks that come with operating out of a traditional office space. Instead, you’re free to focus on working. And because most coworking spaces are situated in prime locations, you’ll find it highly convenient for sales meetings and networking.
Community. Speaking of networking, coworking spaces allow you to rub shoulders with other business owners, freelancers, and skilled professionals. You never know when you’ll bump into your next business partner, investor, or employee. If nothing else, there’s power in building up a network that can be leveraged in the future.
Innovation. When you’re surrounded by other entrepreneurs and innovators, their creativity will rub off on you. You’ll start to see every problem and gap in the marketplace as an opportunity. In this respect, coworking becomes a creative asset that moves the needle on your entrepreneurial spirit.
A coworking space obviously isn’t right for every small business, but don’t discount the fact that it could be right for you. The framework is in place and thousands of businesses are already benefiting.
The Long-Term Impact of Coworking
For the time being, it’s freelancers and small businesses that are the predominant users of coworking spaces. However, don’t be surprised to see larger businesses and established firms get involved in the near future.
“While cost and flexibility are important drivers, access to the community would be key,” Deloitte explains. “Connecting with start-ups and growing businesses could enable new relationships to be built from an early stage. Partnerships with the next generation of businesses could help the smaller firms to achieve greater scale-up. While educating the larger companies better to spot trends and opportunities as they are surrounded by a younger companies and workforce.”
It’s difficult to envision a future where coworking spaces become the norm for larger businesses; but as small businesses continue to opt for this sort of setup, they’ll pave the way for corporations that see promise in this unique setup.
The Evolution of Work
The way in which we work continues to evolve over time. Coworking spaces are still just a small segment of the industry, but this style of work is gaining steam and popularity. It’ll be interesting to keep an eye on how this industry shifts and what it means for freelancers, small business, and larger firms alike.