Coworking Space vs. Traditional Office Space: Which Is Right for You?

Technology and changing workplace expectations have altered how modern offices operate and even where people work. While a traditional office space once seemed the only option for businesses with fully or partially in-person teams, shared coworking spaces have become the new normal for businesses looking to reduce overhead. 

Here we explore the differences between coworking and traditional office spaces, their associated costs, and alternative workplace solutions if you are looking for a chance of scenery.

Coworking space

Coworking spaces often have an open-concept layout and are shared with anyone who is a member of the space. To maintain an environment of collaboration and communication, the spaces are typically furnished with comfortable furniture, shared technology such as printers and Wi-Fi, and even free coffee.

Pros of coworking spaces:

• Varied workspace. Coworking spaces feature a variety of seating options and collaborative workspaces, enabling employees to work where they feel most comfortable and productive.
• Outside networking opportunities. You’ll find entrepreneurs and businesses from various industries in coworking spaces, offering ample networking opportunities.
• No miscellaneous expenses. Costs like utilities, renovations, and furniture are all included in your fee. There are no high up-front costs or long-term commitments, with month-to-month and membership options available in most spaces.
• Built-in management. In a coworking space, the building owner is responsible for building maintenance and stocking the space.

Cons of coworking spaces:

• There are less expensive options. While coworking spaces tend to be more affordable than traditional offices, they are still more expensive than working at home or a coffee shop.
• Crowded areas. There are tons of people around, which could be distracting.
• Lack of personal branding. The space might not be the best setting for a client meeting if you want to project a professional, branded image.
• Unavailable shared spaces. You are sharing resources and meeting rooms with other co-working members, so you might not have access to those assets whenever you need them.

[Read more: 7 Small and Sneaky Small Business Costs That Add Up]

Traditional office space

Built for productivity and focus, traditional office spaces are a private headquarters for your company. The layout may be open, like a coworking space, but you also have the option to divide it into cubicles or individual offices. There are designated conference rooms for group meetings, and you have complete control over your technology and other resources.

Pros of traditional offices:

• Privacy. Office spaces and meeting rooms offer quiet, professional environments with fewer distractions and scheduling conflicts. You can keep proprietary workflows and company secrets in-house.
• Individual production. Rather than the collaboration and networking that happens in coworking spaces, traditional offices encourage individual work.
• Professional client-facing environment. Confidentiality and privacy are maintained for clients.
• Personal branding. The entire office space encapsulates your brand.

Cons of traditional offices:

• Less networking opportunities. There are fewer opportunities to network with individuals outside your industry.
• Separation. Cubicles and individual offices create barriers and a sense of hierarchy among employees, discouraging collaboration and communication.
• Office management tasks. Unless you hire an office manager — at an additional cost — running and managing an office may take focus away from income-generating projects.
• Long-term commitment. While some may see lengthy contracts as a pro because they allow for predictable costs, they can be prohibitive for newer businesses that aren’t yet sure of their workplace needs.

What small businesses can expect to pay

Coworking space costs depend on how many people you need to accommodate, your location, and the exclusivity of the space you’ll occupy. Purchasing a single-day pass versus a membership can also affect the price.

For example, costs at the popular coworking space WeWork currently range from around $39 per desk per day to $339 per month for a membership. Dedicated workspaces can be rented for roughly $350 to $700+ per desk per month in large cities, with location playing a major role in the final cost.

Traditional office spaces, on the other hand, can cost anywhere from $8 to $50 or more per square foot, with the national average sitting at $32.91 per square foot. 

Like coworking spaces, the final cost of a traditional space will ultimately depend on the size, office type, amenities, and location you choose. 

Which option is best for your business?

Before committing to any office space, ask yourself these questions to determine which may be most suitable for your team to conduct business:

• Can I afford office furnishings and ongoing maintenance? Coworking spaces provide many amenities, including furniture, office equipment, Wi-Fi, HVAC, business mailing services, and snacks — all expenses you have to pay for in a traditional space.
• Will we bring clients into the office? Do you want to “wow” clients with your space or conduct business remotely with client meetings off campus?
• Do I plan to hire more people? If you plan to grow your staff, you’ll need to consider when it makes sense financially to pay for office space rather than per seat in a coworking space.
• Can our work be conducted in a public environment? For teams working with proprietary information or sensitive topics, it can be difficult to have workplace discussions and conduct business in a public space.

[Read more:  A Complete Guide to Creating a Work-From-Home Policy That Works for Your Business]

Hybrid options worth considering

If traditional and coworking spaces don’t work for your business, one of the following hybrid workplace arrangements may aid in how your business operates. 

Hot-desking 

Hot-desking is a policy in which employees choose their workstation each day rather than sitting at an assigned seat. Usually implemented alongside a hybrid work model, where employees split their time between on-site and remote work, this policy allows employees to sit where it makes the most sense for their day’s priorities. It also gives employees a chance to mingle with coworkers from other departments or roles, breaking the monotony of the workplace and encouraging team-wide connection and collaboration.

Virtual offices

A virtual office is a service that provides fully remote businesses with access to traditional office-based perks. While benefits may differ, they generally include location-specific addresses, mailing services, and landline phone numbers with call forwarding and voicemail, staffed by real people. The model allows small- and medium-sized businesses to project a large-scale image and establish their presence in multiple cities, while staying within their means.

Flexible leases

Unlike the traditional 12-month lease for an empty space, flexible leases offer private, furnished office spaces without the long-term commitment. Leases range from one day to a few months, making them especially attractive for smaller businesses in risky environments or those just getting off the ground.

Sean Peek contributed to this article.

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