Coworking has become a popular work arrangement for small businesses. While the pandemic has impacted its growth, it may still be a viable scenario for your business.

What is coworking?

Coworking is when multiple people or companies share a workspace while working independently of one another. You share an office or workshop with other people working for their own companies and on their own projects while sharing utilities and amenities such as restrooms, breakrooms, etc. Coworking spaces are typically set up with community Wi-Fi, printers, and other general business supplies. These offerings may vary from space to space.

The coworking trend

Before the COVID-19 pandemic, coworking was growing as a trend, most likely because it saves companies money on leasing their own office space and provides remote workers and freelancers a business-like environment away from their own homes. Since the pandemic began and forced many businesses to work remotely and many others to shut down or reduce operations, the coworking trend has slowed.

According to a report from ResearchAndMarkets.com, the global coworking spaces market is expected to decline from $9.27 billion in 2019 to $8.24 billion in 2020. This is attributed to the economic slowdown from the pandemic, but the market is expected to recover and reach $11.52 billion by 2023.1

"The increase in the number of people working from home or remotely owing to COVID-19 lockdown limits the growth of the market," ResearchAndMarkets.com said in a press release. "For instance, in March 2020, many companies were working from home owing to COVID-19 pandemic, and operators of coworking spaces have seen an almost 50% decline in footfalls."

That's not to say that coworking doesn't have its advantages during these trying times. As more and more workers have had to work from their homes surrounded by their entire families, some have found the need to work elsewhere to maintain a distraction-free workday. Coworking spaces taking the appropriate safety measures have provided that relief with professional environments conducive to increased efficiency.

It can also save your small business money if part of your staff now works from home, and you need less office space, which coworking provides.

Ways coworking can help you improve efficiency

Getting away from one's own homelife is a top reason that coworking can improve work efficiency.

As Maryland's Launch Workplaces puts it, "Balancing work life and home life is a ceaseless struggle for everyone. A coworking space will allow you to keep your work life and personal life separate. Working at home makes it extremely difficult to separate the two. Coworking forces you to stick to a more efficient work schedule and focus on a distraction-free environment. You’ll also discover your motivation for work spiked, as everyone in your space is fixated on success, ultimately boosting productivity and helping you flourish."2

Other efficiency or productivity improvements may come from networking and potential collaborations with others sharing the coworking space. High-quality coworking spaces may also go out of their way to provide you with tools and supplies to help you thrive. Additionally, it's a great way to meet with colleagues outside of a traditional office environment or your own home office set-up.

Ways coworking can save you money

If you own a young business, a shared coworking space can save you the expense of costly office space before you have grown enough to actually need it. Also, if part of your employee base now prefers to work from their home office, your business needs less office space.  Coworking can be a transition for your young business in moving from home office space to a unified company office location. It can also provide a transition for your employees who are tired of working from home but would prefer coworking space to a large company office.

Coworking can be a great way to save on overhead costs. You most likely won't have to spend money on desks, chairs, or other furniture or equipment like printers and copiers. The space will already be outfitted with what you need.

It's also easier to pick up and leave if the location turns out not to be a great fit, compared to leasing an office of your own. Contracts are typically short-term, so that gives you flexibility, which can save you money compared to longer contractual obligations that turn out to be ill-fitting.

Drawbacks of coworking

While there are plenty of great reasons to consider a shared coworking space, the concept is not without its drawbacks. One would be the sacrifice of privacy. These are generally open spaces occupied by numerous individuals. While you may be able to use a designated area when privacy is a must, you are generally going to be working in a less private environment compared to having your own office space or working from your home. There is also the possibility of distractions from the goings-on of your coworking peers. Some spaces are also likely to be unequipped for your own business's needs, though this is something you should be able to determine before entering into a contract. 

Before you jump into coworking, take all of these factors into consideration. But if you find a space that meets your immediate needs, you might find this to be a great work option not only for the short term but also for the future.

1. https://www.businesswire.com/news/home/20200611005411/en/Impact-COVID-19-Global-Coworking-Spaces-Market-2020-2030

2. https://launchworkplaces.com/3-ways-coworking-will-boost-your-productivity-2/

 

The information provided is presented for general informational purposes only and does not constitute tax, legal or business advice. Any views expressed in this article may not necessarily be those of Nevada State Bank. Nevada State Bank is a division of Zions Bancorporation, N.A. Member FDIC