While a coworking space is an excellent choice for many entrepreneurs and small businesses, it is very common to feel you have outgrown coworking spaces as your company grows. While many startups find that continuing a coworking space works for them, many will feel the need to scale up. You may have too many employees to fit in the space you currently frequent or want to improve market access or revenue streams. Many companies also realize as their numbers increase that having a coworking space becomes less cost-effective. Some companies also realize they have outgrown coworking space options if they want a more permanent space.
The best option for many companies who have outgrown coworking is to go ahead and move into a private office. This will be ideal if one of the reasons you chose to leave the coworking space was to create a feeling of permanence for your company and services. Your own office can be highly cost-effective since you can control how many employees you have in the space without having to pay extra for each desk used. It also allows for customization, so you can incorporate some elements of coworking that your team likes, such as flexible seating.
If you want to take another step before renting a private office for your company, you can opt for a serviced office. These spaces can be a natural progression from coworking for many small businesses since they are fully managed and equipped, meaning you have minimal work to do. While the upfront costs are smaller than getting your own office space and furnishing it, the continuing costs are likely to be higher. You also have almost no control over things like furnishings and amenities.
Of course, there is also the option of finding a similar location to the outgrown coworking space but with more room. If you really like the idea of a coworking space for your company, see if there are larger ones in your area and if you can get a discount for having a larger number of memberships. Or look into an incubatoror accelerator, as these tend to offer more scalability with the ability to accommodate businesses of all sizes.
If you choose to set up a new office for your company once you have outgrown coworking, then you will want to ensure that you take a few key steps.
Start by ensuring that your office has proper security measures. Things like security cameras and strong access control systemscan provide the flexibility you need in your office without sacrificing security.
You also need to make sure that your office has all the supplies and furniture that your team will need to get the work done. Pay attention to large items, such as desks, chairs, and computers, as well as smaller things, such as paper, printers, ink, calculators, and pens. Don’t forget to include amenities like coffee, coffeemakers, toilet paper, and similar items.
Take the time to ensure your office has the required connectivity, as well. This includes setting up a phone system and internet. Get your new address listed in online directories, and update the address on your website.
Jeran Fraser, Founder and CEO at Incubate Ventures Inc. shares with us how they built an innovation-centered coworking space by focusing on quality members instead of mainstream marketing.
Incubate Ventures started in Carlsbad, CA in 2015 to provide more than just a space for entrepreneurs and startups. Incubate started with a network of investors and an idea of providing office space, along with services and capital. In 2017 Incubate opened a much larger space, giving several companies the opportunity to network and connect with other like-minded individuals.
The space quickly grew without marketing simply because the idea behind building Incubate Ventures was less focused on quantity and more focused on quality. "We didn't want Incubate to act as a coworking space." "We wanted our space to grow organically" and "ultimately we were focused on the deal flow in the space, not how many butts we could get in the chairs."
This became a huge differentiator, as nearly all our competitors put the focus on real estate and not the ideas and network. Their current office in Carlsbad happens to be the former music studio of Tom Delonge from Blink182 and there's a ton of history there. "One thing you can't replicate is character," says Jeran.
As someone super passionate about startups, the goal of building out a cowork space was to bring to companies together and ultimately provide an opportunity for us to look at potential investments and launch new ideas. Community first has been our focus and that's how anyone opening a coworking space should view the business.
Our tenants are vetted through a unique process to assure they are a great fit for the space. As much as every tenant equates to revenue our goal is high retention among our tenants, which is important as we scale and grow. We also believe that technology plays a key role in building and maintaining that community, which is why Incubate is constantly focusing on evolving with technology.
It's always been a dream to build a cowork space, but the truth is until you've actually done it, it's hard to really understand the challenges that go with it. You're dealing with emotions and not one, but many. You're also responsible for making sure that every aspect of the space is running smoothly, from internet to printer to attitudes. It's definitely no easy job, but thankfully there's a few pieces of technology we've relied upon to make our job that much easier.
One of the biggest problems we had early on was keeping the door locked and unlocked. Today we've built a very unique system with KISI to allow for our doors to only be open when there's people in the space, which ultimately provides a huge layer of security. We've also leveraged other technology that integrates directly with KISI and the Incubate community. With several layers of technology in place, Incubate Ventures has found a way to scale their business using technology that removes some of the operational challenges that most coworking spaces face and KISI has become a big part of that.
Businesses often struggle during transition periods like upsizing. There’s always more to worry about – operating costs, attracting new customers, keeping old ones and the list goes on. Mosre importantly, how can you ensure that the culture of your business is not compromised? Hiring the right staff is key to maintaining and cultivating culture as you scale. Beyond the physical structures of the workspace, your coworking space staff give the space its identity when they interact with clients of the space and ensure their needs are satisfied.
How many new staff you need depends on the size of your venue and what you are offering or planning to offer. There is no single answer to this. Wilmott from IQ office suites tried to develop a staffing model that included a part-time Director of First Impressions, a Director of Operations, and a General Manager. Often, each new location requires a good community manager. This person should be the embodiment of the vibe of the place. They need not have experience working with coworking spaces.
However, they should be people-oriented, hospitable, possess a strong work ethic and willing and happy to fight tooth and nail to satisfy clients’ needs. Besides posting a job advert online, another good way to find good candidates is by asking current coworking space staff if they know any like-minded individuals who fit the job description. This also ensures that the community manager is someone the current staff can work with.
Once hired, you may consider allowing community managers to work like franchise owners and make semi-executive decisions about the space. This autonomy could allow each space to function more effectively and provide coworking space staff with an increased sense of ownership and commitment.
As coworking spaces have low economies of scale, scaling your coworking space would require spending twice on rent and twice on manpower. One way to cut down costs is to automate processes. There are many ways to automate, some include letting new clients register themselves, book meeting rooms and even check their monthly payments.
Your team should then be able to remotely lock and unlock rooms, for instance. Automation could cut down coworking space staff by half in the long run, increasing profit margins.
As mentioned, coworking spaces are not as scalable in terms of staff and operating costs. When revenue is doubled, cost is also doubled, making profits stagnant. One way to get around this is to automate some processes. However, building an application requires a high capital outlay as well. So be prepared when choosing between the alternatives.
While new locations may operate independently of each other, a single direction should be established to ensure that every new space is in line with the overarching philosophy. Regional managers and some shared corporate positions could be helpful for this. Regional managers could oversee a few spaces and understand the profiles of each one, to recommend the most suitable ones to new clients as they come along. Corporate level positions offer more bang for the buck when roles like marketing consultants and legal counsels are shared between coworking spaces.
Should your spaces operate like independent franchises, make sure to set up communication channels lest these spaces get too competitive. Community managers should be aware of what other spaces are doing and be committed to realising a common goal. Likewise, employees should also be kept in the loop lest they feel estranged. Regular meetings using Zoom or platforms like Slackcan help ease the communication barrier. Employees who are aware of the company’s overall direction tend to make better decisions as they understand the underlying reasons for actions.
There is no hard and fast rule for hiring staff as you scale your coworking space. The bottom line is a fine balance between your bottom line and maintaining and nurturing the vibe and culture of your original business.