Co-Working Space Offers Many Possibilities

One of the best ways to get access to a good, interesting office really cheap is to share the workspace. This can be done in a number of different ways.

For one, you can sublet excess office space. Let’s say if a company downsizes their business or leased excessive space to begin with, then they might have an extra room or two they aren’t using. The space would only be available for an odd amount of time—until the lease runs out if it is not being renewed. Maybe it’s available for 17 months; maybe it’s 29 months.

You would probably have to share the public spaces such as the entrance area, the office kitchen, and the bathrooms with the existing office. But for all these tradeoffs you can expect to rent sublet space very cheaply. And because not everyone will consider sublet space, there is often plenty of room for negotiation.

Another possibility is just renting a desk or two in someone else’s office. This might sound crazy, but I’ve done it and it worked out great. For a co-worker and myself once, we just rented two desks in a small real estate office, even though we were working on a totally different type of business. The real estate business focused on rentals, was very seasonal, and hence had empty desks they would rent out in the off-season from November through March.

The key to this situation working out well was that the real estate owner who shared the space with us was a great guy, fun to work next to, and overall made it even more fun and interesting than having our own office.

Co-Working Centers Are Becoming Increasingly Popular

Still another possibility that is an increasingly “hot” option is a communal workspace, also called a co-working center. These are particularly popular for entrepreneurs in tech centers like San Francisco, New York, and Boston.

Typically you can just rent “access” to a co-working center or you can rent a private office. When you rent access, you usually don’t have a particular space assigned and you set up your laptop computer at whatever seat happens to be available at a large table beside people working on other businesses. Phone booths and conference rooms are usually available by reservation.

You share the public kitchen space, restrooms, Wi-Fi, access to printers, and modest other public spaces with other employees. Private offices at these centers tend to be small with large windows, giving the feel of being part of the co-working center. Generally, these co-working centers are designed to facilitate the exchange of ideas and motivation among the different people and businesses located there.

I have worked in one of the largest co-working centers for over a year, and for a small start-up, have found it to be a terrific place. I particularly like being able to sit in a different location every day. I like even more that the rent, which is for the general table seating, is dirt cheap.

Another advantage of co-working centers is that when you seek to hire your first several employees, they can feel isolated working in a very small business. But if you put them in a co-working center they can feel part of something much bigger. Furthermore, you don’t have to spend your time on those little issues that you don’t think about in advance but can take a lot of time, such as making sure the Wi-Fi is working, making sure the heat and a/c are at a level people like, buying chairs, replacing light bulbs, etc.

The drawback is if the employee leaves on the first day you may be stuck with his or her access cost for a month or two. Another potential downside is that it is easier for employees to get distracted in this environment, and more likely for them to get constantly recruited away.

Traditional Short-Term Office Rental Option

Another possibility is more traditional, fully furnished, short-term office rental companies. These companies rent fully furnished offices for time frames as short as a month at a time. They tend to be located in central business districts. As with the co-working space, you don’t have to go out and furnish your office and you can rent on a month-to-month basis. You tend not to get the communal feeling that you get in the co-working space. Many of the offices are often rented to salespeople from larger companies or for overflow space for mid- or large-size companies.

Furthermore, I need to throw out a very important caveat in dealing with these short-term office rental companies. You need to read every word in the lease carefully. My experience is that they make a point of throwing in an automatic renewal clause that they make no mention of in their sales presentation. So, for example, when I rented an office for a year from a well-known international short-term office rental company, they included a clause that my lease would automatically renew for an additional year if I did not notify them in writing 90 days before the termination date.

I asked the office manager about this and she said that many clients did not pay attention to this clause and were “surprised” when they were informed after the fact that they had automatically renewed for a year. Additionally, this company put in their lease an automatic add-on fee at the end of each rental period for repainting and cleaning any vacated office.

Although I think the nonverbally disclosed automatic renewal is frankly a disgusting way to do business, I have seen worse from these short-term office rental companies. When I rented from another of these firms after my initial lease period expired, I told the manager I would only consider renting on a month-to-month basis. She said that would be totally acceptable and we agreed to that. Six months later, I gave her a month notice I was moving out. She said she still had my initial written agreement that required 12 months’ notice.

I told here we had a verbal agreement for month-to-month rentals. She said tough luck and she was going to hold me to the original lease. Then her lawyer sent me a threatening letter! Then I told her, “You know that verbal agreement we had? Well, I have a copy of an email from you confirming it!” Needless to say, she backed down. So be careful in renting office space, especially from these companies that rent short-term furnished offices.

Despite these caveats, shared workspace is an interesting and very affordable solution.

Takeaways You Can Use

  • Co-working spaces can provide a sense of energy and community.
  • Read your lease very carefully when dealing with short-term office rentals.

About Bob Adams

Bob Adams is a Harvard MBA serial entrepreneur. He has started over a dozen businesses including one that he launched with $1500 and sold for $40 million. He has written 17 books and created 52 online courses for entrepreneurs. Bob also founded BusinessTown, the go-to learning platform for starting and running a business.