4 Signs You’ve Outgrown Coworking

How to know when you’ve hit your breaking point and are ready to move out.

It was a dark time. Companies were started out of garages. Entire teams worked elbow-to-elbow in their founder’s apartment. It was cramped and uncomfortable, but it was the only way.

Then coworking came along. And it was the savior. Now small business and startups could have their own office without leasing their own office. They had a comfortable place to work. They had all-you-can-drink coffee. They had the opportunity to meet fellow business owners to network and learn from each other.

 

It was good. Until it wasn’t. Because for many growing companies, there comes a time when coworking is no longer a great fit.

 

Now we’re not knocking coworking. For solo workers such as freelancers, independent contractors or salespeople who cover several cities, coworking can be an economical option with the added benefit of built-in community.

 

Coworking is also ideal while your still-small company is in flux. The month-to-month commitment offers flexibility as your team grows or business needs change. A space where employees can work together provides team building and get-shit-done benefits that are difficult to achieve when everyone works remotely.

 

But companies grow and teams expand. At some point, you’ll likely hit a breaking point and outgrow shared working space. Then it’s time to expand your horizons beyond the walls of coworking.

 

We generally see companies hit this coworking breaking point at around 10 people. What were once pros to coworking start to become cons. What’s more, many teams of this size anticipate future growth. Add a few more people, and your team will feel these coworking pain points even more acutely.

 

Here are a few reasons you might consider ending your coworking contract to invest in your own office space instead.

 

1. People Are Getting Less Work Done

Every company has unique problems to solve for their particular business. Getting that work done becomes difficult when you’re surrounded by the conversations or idle chit chat of other coworking members. It’s incredibly distracting, especially when your team needs to focus and collaborate.

If you have a team of eight to 10 people, you may have moved into a private office within your coworking space. While this cuts out some of those external distractions, it’s still not an ideal environment for focused work.

 

Everyone’s essentially sitting on top of each other cooped up in a conference room all day. There’s no room for one-on-one conversations. Personal space is limited. No one’s lunch goes unsmelled. Talk about a decline in productivity. When everyone’s starting to feel cramped, it’s a sign you’re ready to level up to your own office space to provide everyone more room to breathe and work.

 

2. You’re Spending More, But Getting Fewer Perks

The costs of coworking often comes down to price per person or desk. For example, a coworking space in DC might charge $4,200 for a private office that holds 10 people. These rooms run around 300-500 square feet.

 

For that same price, you could get a 2,000 square foot space that includes a conference room of that same size — plus your own kitchen, communal area, private offices and enough room for everyone to have their own desk. You can have more space that’s more conducive to everyone’s productivity for around the same price.

 

Of course, there are other fixed costs associated with moving into your own office space. You’ll need to pay a security deposit. You’re on the hook for utilities, furniture and office supplies. But unlike coworking, the price per person costs less with a larger team.

 

3. Your Office Doesn’t Feel Like Home

Coworking is designed to be a one-size-fits-all workspace. It’s hard to truly feel at home in a shared spaced that’s not your own. The options for personalizing your area are limited. If you have a dedicated office, you might be able to jazz it up with a few plants or throw down a cool rug, but that’s pretty much it.

 

Leasing your own space gives you a blank canvas. It’s your company, your vision, your culture. Now you can design your office to match. You’re given free rein to personalize the space how you want. Paint the walls whatever color you want. Buy the furniture you want. And most importantly, you can begin to curate the culture you want.

 

As your business continues to grow, culture is crucial to keeping employees and attracting new ones. Putting roots down in your own office space is a big step towards solidifying your company’s unique culture and personality.

 

4. You Want to Attract Better Business and Talent

Moving into your own office is also a step towards priming your business for growth. Say you’re meeting a potential client or new hire. They’ll size you up long before you shake hands. Where your company works speaks volumes about how well your business is doing.

 

A coworking space might present the image that you’re still figuring things out. Inviting them to meet at your office presents a different message. Business is stable. You’ve got your own space. You’re in this for the long run. Potential clients, business partners and employees alike feel better knowing you’re an established company that will still be around a few years from now.

 

Many business owners feel nervous about the long-term commitment leasing an office space requires. Commercial real estate leases generally run five to 10 years. What small business can predict where they’ll be that far down the line?

 

Fortunately, there’s a good in-between option. You can sublease an office space for a few years, often at a lower price than you’d pay to lease the exact same space directly. You can move out of coworking for a year or two while your company continues to grow. But you aren’t locked into a lease for a full decade and can still make the space your own.

 

One reason commercial estate real leases run so long is because they often include building out the space to the tenant’s preferences. So another option is to look for spaces that were built out by previous tenants. These are called second-generation spaces. Typically landlords are open to shorter leases because they’ve already recouped their build-out funds. Short of changing paint colors or moving a wall, these are leased as-is. You can often lease a second-generation space for a few years instead of the standard seven to 10.

 

As you weigh the pros and cons of coworking and your own office, it often comes down to flexibility and cost. Leasing a dedicated space is a much bigger commitment than the month-to-month coworking payments. But your own space comes with many perks that coworking simply can’t provide for a growing team.

 

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Ready to start looking for your first office space? District Advisory’s trusted partner, Truss, is here to help. Get in touch and we’ll help you find exactly the space that will feel like home.

 

“When we started Truss, we set out to make leasing space as easy as booking a vacation online.”