Editor’s note: This article was first published in October 2010, in the middle of the financial crisis. Its references to “times of crisis” and its description of coworking reflect how the concept was understood then.
In times of crisis, many companies have turned to coworking, especially for the early days of setting up a business, because it is a way to minimize fixed costs and increase a business’s profitability. Not everything about it is an advantage, but it is true that coworking can make your business more profitable.
For anyone not yet familiar with the term, coworking is simply when two, three or ten companies group together in the same premises and share the facilities. That way, all the expenses are shared. If we reduce our fixed costs and some of the variable ones, the early days of our company can be easier to bear.
In some cases, companies even share secretaries, receptionists, a security guard, a doorman, and so on.
On the one hand, coworking offers clear advantages, not only when it comes to saving on expenses but also in having premises that give you a good corporate image in your clients’ eyes. But of course, it isn’t all advantages.
Among the disadvantages of coworking, we would point to the typical problems that can arise whenever two parties share something. You also need to have every clause very clearly defined in the contract so that no problems come up.
There have often been cases where one company failed to pay its share under the contract, not out of carelessness but because it was going through financial difficulties. Even so, the other company has to cover the costs.
One way to avoid this is to go through companies that rent out offices inside a building run on the coworking model. The building has a doorman, receptionists, and shared photocopier and printer rooms. The good thing about renting individually is that you only pay your own share, and if your “neighbor” can’t pay, it doesn’t affect you at all.
Further reading
- How to run a small business in times of crisis
- The advantages of starting a business during a crisis
- Why new businesses fail
- Common mistakes made by Hispanic entrepreneurs
- The secret of success in business
Featured image: Deskmag, CC BY-SA 3.0, via Wikimedia Commons.
