Moving to a new office can be stressful, but it doesn’t have to be. One of the first decisions to make is what kind of space do you want? Do you want a traditional office or a shared space that includes services and amenities? Let’s explore some of the trade offs between a traditional office and a shared office.
How Long Are You Willing to Commit?
One of the biggest differences between traditional office space and shared office space is the term of the lease or agreement. A traditional office lease is at least 3 years and usually more like 5 or 10 while a shared office usually offers shorter term agreements from 3 months up to 1 year..
If your business is relatively stable and you don’t expect to grow or shrink dramatically, then a long-term lease may be a good fit for you. Committing to a longer term will probably get you a better base rent for the space, excluding any buildout or furnishing costs. If you do end up needing a different space (bigger or smaller), it's important to remember you’ll be liable to the existing lease unless you or the landlord finds another tenant.
If you need more flexibility in terms of space or up-front dollars, a shared office may be a better option. Shared spaces like at Work Better require shorter term commitments from 3 months to a year, which gives you the opportunity to be flexible with your business. Shared offices also give you the opportunity to add space as you need it. If you plan to add 3 team members over the coming year, you can simply expand your space when that happens and only pay when you need the space. With the longer term approach of a traditional office lease, you’ll be paying for the cost of new team members before you even hire them.
Furniture and Infrastructure
Unless you already own your desks, file storage, and chairs, chances are you will have to spend your time shopping for workstations that are both comfortable for your staff and cost effective. What’s more, the only thing more frustrating than constructing a dozen Swedish-made desks is having to learn Swedish to do so. And this is the just the beginning of the furniture and equipment you will need not only to operate effectively but also to represent your business the way you want to in front of your staff and clients. This will include things like printers, kitchen/lounge area furniture and supplies, and miscellaneous decorations - and all of this will require maintenance and upkeep.
A shared office space makes moving into an office a turn-key experience. The day your team moves in, you will be equipped with comfortable workstations for all of your associates - no assembly required.
Utilities and Services
Is there anything more aggravating than waiting for the cable and internet guy to show up “between the hours of 9am and who knows when?” Or what about the two-hour conversation on the phone with the electric company to figure out why you were charged double this month? And for the amount you pay the internet company, why is the Wi-Fi always spotty?
And this just addresses the frustrations that come along with setting up and managing utilities. You still will need to worry about equipment costs and the cost of ongoing maintenance, which is often unpredictable. You’ll also need staff trained and dedicated to managing and using these utilities and services.
Let’s face it, working with utility and service companies is a huge waste of your time and money. Why stress over four or more separate companies?
The obvious thing that separates a traditional office space from a serviced-office space is, well, the service.
If you have a traditional office, you’ll probably need to hire someone to manage the office and keep things in good order for your team’s sake and to make a good impression on your clients.
Shared office spaces like Work Better are staffed by a professional, onsite team that is specifically trained to manage a business office and to keep things operating smoothly and efficiently. They will troubleshoot technical issues, ensure the copiers are operating and well stocked with paper and toner, and they will make sure the coffee and snacks are hot and ready. And these are just a few of the things they are used to handling on a daily basis. You’ll be able to trust that all the little details are handled without you having to think about them or having to hire and manage someone else to think about them.
Furthermore, shared office space team members will treat your guests like their guests. From the moment your client or business associate arrives at reception, you can expect that they will be greeted professionally and cordially and that your meeting will run smoothly in a well-appointed and comfortable meeting room. Regardless of the size of your company, this is an experience that will give your business the respect and prestige it deserves.
The Community and Culture
One thing business owners can easily overlook is how important culture is to a workplace. A strong culture will lead to a more productive staff, but building a culture takes time and money! Planning for monthly events, putting artwork on your wall, or even just finding a place to have one-on-one time with employees can be difficult in a traditional office.
Shared offices often include fun events for their members like monthly happy hours or interesting panel discussions. Furthermore, working in a shared office space allows you the opportunity to meet like-minded business associates who share the same challenges of running their own operation.
Community, culture, service, flexible agreement terms - these are all nice to have things that make the day-to-day operation of your business easier but it’s the potential economic benefits that really makes a shared office space shine. Smaller teams that only need one or two offices and only occasional use of meeting rooms certainly benefit since they are only paying for the space they need - why pay for a conference room that is empty most of the time?
It’s important to note that when it comes to comparing the costs involved with a traditional office and a shared office, you need to make sure that you’re comparing apples to apples. The cost of a traditional office space is typically represented in dollars per square foot, so when you are talking about a space that is 1,500 square feet or more, the cost can seem low. It’s important to remember, though, that this is the cost for the space and does not include the costs involved with filling it with furniture or keeping it running with utilities and staff. On the other hand, the price of a shared office space is usually a fixed monthly fee based on the number of offices you use and will include all the services and amenities your business needs to operate.
Here is an example of the approximate monthly cost breakdown between the two types of spaces.
*Comparison is based on a total of 1,500 square feet for traditional office space (offices and common areas) vs. a 250 square foot office in a shared office space in Manhattan
Regardless of the size of your team, there are economic benefits to a shared space. Although teams from 1-10 people will benefit the most economically, even larger teams with multiple offices or team rooms can benefit since shared space providers come with key personnel and tools that are necessary to run the business. A good exercise to determine the potential economic benefits is to list out your costs in either scenario similar to the chart above, taking into account any additional office staff, supplies, repairs, etc. you will need to manage a traditional space.
While a shared office space will often be the least stressful and most cost effective option for many businesses, the most important thing is to make sure you choose the best fit for your particular business. You should prioritize finding an office that will help you, your team, and your business succeed by finding one that complements your team’s working style and your company’s needs. Speaking to the team at a shared office space about your unique business situation will help clarify the decision for you since they have experience with the types of businesses that tend to prosper the most in the environment.
Interested in learning more about Work Better's private offices?
Sources used to compile table data:
- Mashayekhi, Rey. “Manhattan Office Asking Rents Hit Record High in January: Report.” The Real Deal, The Real Deal, 11 Feb. 2016, therealdeal.com/2016/02/11/average-manhattan-office-asking-rent-exceeds-72-psf-for-the-first-time-report/.
- “Employer Costs For Employee Compensation - December 2017.” Bureau of Labor Statistics, U.S. Department of Labor, 20 Mar. 2018, www.bls.gov/news.release/pdf/ecec.pdf.
- “Lease Calculator.” Lease Calculator, Bfi New York, 2018, www.bfiny.com/lease-calculator.html.
- Misheloff, Rob. “Office Equipment Leasing: Should You Finance Business Equipment?”Equipment Leasing and Small Business Loans with Smarter Finance USA, Smarter Finance USA, www.smarterfinanceusa.com/blog/office-equipment-and-furniture-leasing-financing.
- “Ask an Expert - Electric, Gas and Water Use in Commercial Facilities.” Efficiency Now, Questline, members.questline.com/Article.aspx?articleID=7372&accountID=2635&nl=16722.
- “Average Energy Prices, New York-Newark-Jersey City–February 2018 : New York–New Jersey Information Office.” United States Department of Labor, U.S. Bureau of Labor Statistics, 14 Mar. 2018, www.bls.gov/regions/new-york-new-jersey/news-release/averageenergyprices_newyorkarea.htm.