When searching for an office in which to run your small business, you may come across coworking office spaces. Not to be confused with shared offices, they’ve become increasingly popular in recent years. According to a report published by AllWork, the number of coworking office spaces in the United States increased by 16% and globally by 36% in 2018. To determine if it’s right for your small business, though, you must first understand how a coworking office space works.
What Is a Coworking Office Space?
A coworking office space is a community-centric office in which multiple freelancers and business owners – typically owners of small businesses and startups – operate. It’s called “coworking” because it offers a space in which freelancers and small business owners can work together to help each other achieve their respective goals.
The purpose of coworking office spaces is to create a sense of community for freelancers and small business owners. Statistics show there are roughly 22 million small business owners and 15.5 million freelancers in the United States. Unfortunately, many of these professionals are forced to work in isolated spaces where they experience little or no human interaction. A coworking office space solves this problem by cultivating and encouraging a socially driven community atmosphere.
A coworking office space usually has an owner or property manager who sells memberships to small business owners and freelancers. While pricing models vary, most involve a daily or monthly membership. To use a coworking office space, you simply sign up for a membership and pay the fee. As long as your membership is active, you can use the coworking office space to run your small business.
Even if your small business has a dozen or more employees, you can still run it from a coworking office space. You just need to purchase an additional membership for each employee who will use the space. Alternatively, some coworking office spaces sell subscription packages for multiple employees at a discount. You can scale up or scale down your subscription depending on your small business’s needs.
History of Coworking Office Spaces
While now common in the United States, Canada, the United Kingdom, Germany, France and Japan, the concept of a coworking office space is still relatively new. According to TheAtlantic, they first appeared in San Francisco during the mid-2000s. After launching in The Golden State, coworking offices space were gradually adopted by other states and, eventually, other countries.
The concept of a multi-business working space was envisioned by American software engineer Brad Neuberg. As explained on his official website, Neuberg came up with the idea in order to solve a common problem encountered by freelancers and small businesses owners: a lack of community.
Neuberg enjoyed the freedom of working as a freelancer, but he missed the sense of community of working as an employee. This prompted the software engineer to develop the groundwork for the modern coworking office space.
Neuberg approached a friend he knew, Elena Auerbach, who worked at the Spiral Muse building in downtown San Francisco to inquire about setting up a coworking office space to sell to other freelancers and small business owners. Auerbach obliged under the condition that Neuberg pay $300 a month for two days per week usage. Neuberg’s coworking office space wasn’t an immediate success. After posting on Craigslist, he still didn’t attract any freelancers or small business owners to his coworking office space. With a more aggressive marketing strategy, though, he attracted his first member – and it wasn’t long before his coworking office space was filled with freelancers and entrepreneurs.
Coworking Office Space vs Shared Office
Shared offices are often confused with coworking office spaces – and for good reason. Both models involve working in a space with other freelancers or small business owners. The difference, however, is that coworking office spaces emphasize community, whereas shared offices do not.
In a shared office, you’ll find the workstations are typically closed off from each other to provide privacy for the freelancers and small business owners who use them. You can still converse and communicate with other professionals in a shared office, but this generally isn’t encouraged. On the contrary, most members of a shared office focus on their own professional activities. They don’t interact with other professionals who are outside of their organization.
Most importantly, a coworking office space offers a community in which freelancers and small business owners are encouraged to interact with each other. Even though members have their own professional goals, they often communicate to share ideas, buy and sell services, ask for feedback and simply converse. You won’t find this type of social interaction in a shared office.
In short, coworking office spaces differ from shared offices in the following ways:
- Coworking office spaces typically have an open layout, whereas shared offices have a closed or portioned layout.
- Coworking office spaces encourage social interaction by creating a sense of community, whereas shared offices do not.
- Coworking office spaces are usually larger than their shared office counterparts, meaning more freelancers and small business owners can use them.
- Coworking office spaces are available through a daily or monthly membership, whereas shared offices are available through a lease.
- Many coworking office spaces are part of a large network, so members can access multiple affiliated spaces. Shared office spaces, on the other hand, are not networked and usually consist of a single location.
Advantages of Coworking Office Space
Running your small business from a coworking office space offers several benefits, one of which is regular social interaction. According to a survey cited by Inc., nearly one in three small business owners feel isolated or lonely when working, compared to just 15% of non-entrepreneurial workers like employees or corporate executives. Considering that coworking office spaces often have dozens – sometimes 100 or more – members cohabiting the same space at any given time, you’ll be able to converse with other like-minded entrepreneurs if you run your small business here.
Depending on what your small business does exactly, you may be able to attract new customers by running it from a coworking office space. If you run a graphic design business, you can ask other members if they are interested in logo or business card design services. If you run a cybersecurity business, you can pitch antimalware services to other members. Practically all small businesses that operate in a business-to-business (B2B) niche can attract new customers by using a coworking office space. And even if your small business’s audience consists of consumers, you may still attract customers using this modern workspace.
You can save a substantial amount of money on your small business’s overhead expenses by choosing a coworking office space rather than a private office. With a private office, you’ll usually have to sign a lease, which can range from one to three years. Not surprisingly, lease payments are exponentially more expensive than coworking membership payments. And if you decide to move your business, you may have to pay an early cancellation fee if you’re stuck in a lease. A coworking office space allows you to avoid these headaches by using a cheaper and more flexible membership-based payment system rather than a lease.
Coworking office spaces offer onsite amenities to members, some of which include Wi-Fi, printing, coffee, snacks, meeting rooms and more. While also available in shared offices, you won’t find these amenities offered in private offices. When running your small business from a private office, you’ll have to purchase and add these amenities yourself.
If you need feedback on a work-related project, you can ask another member of the coworking office space. Most members will gladly share their opinions; all you have to is ask. Of course, he or she may ask for your feedback in the future, so be sure to return the favor if the situation arises.
According to The Harvard Business Review (HBR), workers thrive in coworking office spaces because of their social atmosphere. Researchers found that workers are more efficient in workspaces where they are able to interact and converse with other people.
Disadvantages of Coworking Office Space
Like with all workspaces, there are disadvantages to running your small business from a coworking office space. For example, you won’t have the freedom to personalize your workstation with your preferred furniture and decorations. Both coworking office spaces and private offices utilize a pool of workstations that are accessible to all its respective members.
Coworking office spaces don’t offer much privacy, which may be a concern for some small business owners. With their open design, you’ll hear other members talking and going about their day-to-day activities. If you’re easily distracted by noise, this may hinder your productivity and overall performance.
A potential disadvantage of coworking office spaces that’s often overlooked is increased proximity to competitors. If another member of the space operates in the same market or niche as your small business, some of your potential customers could choose his or her business rather than yours. This isn’t always a problem, as coworking office spaces often have a diverse group of members, but it’s still something to consider before purchasing a membership to a coworking office space.
You won’t have a dedicated business address when running your small business from a coworking office space. If a customer or potential customer asks for your small business’s address, you can’t give him or her the coworking office space’s address. Instead, you’ll have to use a different address, such as a Post Office (PO) box or virtual mailing address.
Things to Consider When Choosing a Coworking Office Space
There are a few important things to consider when choosing a coworking space. For starters, consider the location and its relation to your home. If it’s located 30 miles away – and the only way to access it is by driving down a heavily congested road – you’ll waste a lot of time commuting. By choosing a coworking office space that’s
It’s always a good idea to check out a coworking office space before purchasing a membership. Most owners and managers of coworking office spaces will allow you to take a tour of their facility at no cost. During the tour, pay attention to the way in which workstations are set up, how many members are using the space, whether or not the members are interacting with each other, and the amenities offered.
Don’t forget to check the hours of operation when choosing a coworking office space. Some coworking office spaces are only open to members during specific hours of the day, such as 6:00 a.m. to 6:00 p.m., but others are open 24 hours a day, seven days a week. With a 24/7 coworking space, you won’t be restricted to running your small business during specific times. Whether it’s early in the morning or late at night, you can visit the space to perform business-related work.
Here are some tips on how to choose a coworking office space:
- Consider the price of membership and whether it’s within your small business’s budget.
- Choose a coworking office within a reasonable driving stance from your home.
- Make sure the coworking office is secure. At minimum, it should feature some type of access control system, such as key, as well as video surveillance monitoring.
- Read over the coworking office space’s rules. If they aren’t posted on the wall, ask the owner or property manager for a copy.
- Inquire about whether or not the coworking office space is part of a larger network, and if it is, find out where the affiliated offices are located.
- The coworking office space should be large enough to accommodate your small business while it grows.
In Conclusion
Research shows the number of coworking office spaces in the United States is increasing at a rate of roughly 16% per year. Unlike shared and private offices, they promote a sense of community, which the key factor driving their popularity. However, coworking office spaces offer both advantages and disadvantages to other types of offices, so you need to assess whether it’s a smart idea for your small business.

President at Office Chairs Unlimited – I have been in the furniture industry for over 20 years, and I’m an expert (just ask me) on all things furniture. I know a thing or two because I’ve seen a thing or two.