Let’s see if Populus Coworking can save your small business a few thousand dollars a month on office space.
Comparing the price of coworking spaces to traditional office space can appear complicated. Frankly, just understanding a conventional office lease can be challenging enough. The following is a guide to understanding how a coworking membership might compare to a traditional office lease for small businesses or startups.
When it comes to a traditional office lease, there are several different types. The differences primarily deal with how a landlord will treat the expenses outside of base rent amount. One of the most typical leases is a triple net lease, shown often as NNN. Another common type is a gross lease. You might also find an absolute net lease, full-service lease, or modified gross. All of these options act differently and present expenses differently to renters. Ultimately, all of this means it is essential to understand your all-in cost to lease traditional office space.
Traditional office space will present costs on a per square foot basis. The price you pay for rent will vary vastly depending on the quality of space you are renting. On the basic level, you’ll see office space referenced as class A, B, and C. Even within these classes, the quality of space can vary widely. In the Omaha office market, office rental rates may vary from as low as $10 per square foot to prices over $30 per square foot. In larger markets, rates are much higher.
Your cost of traditional office space will be higher than your per square foot rate. Depending on the type of lease, you’ll also be responsible for taxes, insurance, common area maintenance, utilities, and other building-related expenses. This might be directly billed as a NNN expense or rolled into a full-service lease. Additionally, you should consider further costs of office space such as internet service, cable TV, furniture, coffee, and snacks. All of these expenses, including other amenities you might provide your staff, can add to the total cost of an office location for your small business or startup.
When it comes to coworking space, you will most often encounter a fixed cost with little or no fees charged in addition. The cost of coworking space is presented as a monthly membership, not on a per square foot basis. This is what makes it difficult to compare. To understand how coworking compares to office space, you must compare the all-in price of an office to the membership fee.
Let’s look at an example from Populus Coworking versus a traditional Omaha office space for a startup company with six people.
Rent: $16 PSF NNN: $6 PSF Utilities: $2 PSF Cleaning: $2 PSF Total for a 1,500 SF office: $3,125 Gym Memberships: $240/mo Internet: $200/mo Coffee and snacks: $75/mo Furniture lease: $350/mo Parking: $200/mo Total: $4,190 per month
All Included: $2,600 per month
It’s apparent with a comparison like this that coworking is an efficient option for small businesses. The reason is simple: shared resources. While traditional office makes perfect sense for larger companies, the numbers rarely add up for startups or small companies that want to offer a competitive work environment. Dedicated office space is too inefficient. A large office building may contain 30 companies paying $200 each for internet — a total of $6,000 a month. A coworking space can pay $1,000 a month for internet and share that cost amongst all of its members. These simple economies of scale make coworking an excellent choice for startups and small businesses of 2-20 employees.
Shared office space, often referred to as coworking, has its roots in Silicon Valley. It started with a bunch of startup employees looking for a way to share the enormous expense of an office. The concept was brought to the mass market by the billion-dollar startup company WeWork.
Since its inception, shared office space has grown and evolved. While it may have once been simple coworking for young entrepreneurs, the benefits of shared office space have been adopted by organizations of all sizes. Small businesses and corporations around the world have come to realize the many perks and efficiencies to shared space. Let’s take a look at a few of these advantages.
No Debt Liability
There are many advantages that shared office space can provide when it comes to work itself, but we often overlook a key financial advantage for small businesses. When an organization signs a lease for 3,5, or even 7 years they now have a huge liability on the balance sheet. When a small business needs to take out a line of credit or loan with the bank, the liability of that lease will be a major consideration.
Most coworking spaces require short term commitments, sometimes as little as one month. With these short term memberships, small business owners do not need to carry the financial liability of a lease. This can preserve the financial margin for debt that might be used for equipment, working capital, and other types of expansion.
Shared office space helps small businesses stay leaner and avoid the hit of a large asset or debt liability.
Truly Valuable Networking
Shared office space provides networking opportunities that are very unique. While meetups and events provide a few days or hours of opportunity to connect with new people, coworking spaces provide daily opportunities to connect with like-minded businesses. In a shared office space, you have the opportunity to meet many different types of for-profit and non-profit companies.
There can be significant advantages for large companies to join shared workspaces for this very reason. Coworking spaces can provide an easier way for small businesses and entrepreneurs to interact with your large organization. Establishing a small presence in a shared office space can be a great marketing tool for any company with a focus on small business clients.
Recruiting Great Talent
It’s tough to get the best talent. One thing great talent is looking for these days is flexible working environments and added amenities. Shared office spaces allow small businesses to offer top amenities and flexibility. Few small organizations can afford to offer things like fitness centers, beer on tap, local coffee, or historic working spaces on their own. But in a shared environment, all of these amenities become viable.
Shared office spaces are a significant tool for companies of all sizes when it comes to bringing in the best talent. Event larger organizations can use coworking spaces to establish remote teams in more hip and trending spaces. The top developers may not want to work in a corporate America cubical, but they are happy to work in a local coworking space.
Shared offices spaces are a mix of people, ideas, concepts, and thoughts. This diversity can be a huge advantage or coworking members. Many businesses suffer from a lack of diversity. Not simply diverse skin colors, but a diversity of thought and concepts.
In a shared office space, ideas flow around the physical network of people. There are different backgrounds, ages, and life experiences. All of these unique perspectives play into the unique advantage of a shared office. There are few other places where businesses can bounce ideas off of multiple people who spend their time doing something completely different.
Shared Office Is Unique
A coworking space is not right for everyone. There are, of course, tradeoffs from a more traditional office environment. It’s likely to have less privacy in a shared space. There may be a bit more noise and distraction. Not every types of business or team will be a great fit for a coworking space. Still, companies of all sizes should consider the very unique benefits that shared office space has to offer them like diversity, recruiting advantages, valuable networking, the reduction of financial liabilities.
Over the past few years, coworking spaces in Omaha have exploded. Populus is conveniently located in midtown Omaha, but we may not be right for everyone. While we’d love to have you become part of our office space community, we realize there is a number of factors that play into your decision. Here are some of the other coworking spaces you could check out.
All of these spaces offer a mix of coworking amenities including printing, coffee, conference rooms, fitness centers, and even beer on tap. And, of course, if we’re missing one please let us know.
1. Commerce Village – Downtown Omaha
Commerce Village is an Omaha coworking community featuring flexible office space, meeting rooms and workspaces for freelancers, remote workers, and small businesses. Work in a beautiful historic building with world-class amenities and stunning views of downtown Omaha.
A transition space between maternity leave and full-time work. Third Space Coworking will be opening soon in West Omaha to provide working parents with more support and flexibility. They partner with employers who want to ease the painful transition back to full-time work after maternity (or paternity) leave.
Watts Coworking is a space where Entrepreneurs, Startups, and Independent Professionals can work together to power their most innovative ideas. We welcome our members to be a part of a culture that embraces community and thinks like an outlier. Watts gives professionals the opportunity to work together and accomplish revolutionary things.
5. Regus Omaha – Midtown, Downtown, and West Omaha
Rent an office, desk space or meeting room for an hour, day, month or years, or establish a business presence with a virtual address. Regus is a worldwide chain of flexible office space with three locations across Omaha.
FUSE Coworking is a shared space where Lincoln’s independent professionals, startups, remote workers and entrepreneurs can work, learn, collaborate and create. Attracting Lincoln’s top technology and talent, FUSE provides coworkers with everything they need to succeed: a place to work with blazing-fast internet; meeting space; and, of course, coffee.
Turbine Flats Coworking seeks to provide a shared, community-driven workspace for location-independent workers. As a member, you’ll be an active part of what Turbine Flats is and does for you and for others.
Turbine Flats provides you with access to the common workspace, internet, office equipment, conference space, knowledge resources, and other services. With the ability to come and go at any hour and free parking you’ll be able to get it all done.
Located at 26th and Farnam Street, Populus is building the most flexible way to office in Omaha. We have over 10,000 square feet of inspired space ready for your startup or small business. Populus provides our members with all-inclusive pricing so you have one simple bill each month.