Coworking spaces seem to have a lot to offer, including standard office amenities, networking opportunities, and a truly professional environment to show to your clients. But coworking spaces aren’t free – and for some individuals, the cost may seem high.
Are coworking spaces “worth it” and how much of an ROI can you expect?
The Big Picture
Let’s start by addressing a couple of important “big picture” concepts that will help us understand whether coworking spaces are generally worth the money.
First, everyone is different and every coworking space is different. People have varying needs when it comes to location, amenities, equipment, etc.
Second, coworking spaces have already made a massive impact. There are more than 6,200 coworking spaces and more than 933,000 U.S. adults who use them regularly. With so many options available, it’s increasingly likely that you can find a coworking space that meets all your needs for a reasonable price. Also, this high volume of both coworking spaces and people who use them is an indication that most people who use coworking spaces do find them worth the money – otherwise, the entire industry would collapse.
Comparing Coworking Spaces to Other Options
One way to look at the question is to compare coworking spaces to other, alternative options. For example, let’s say you’re launching a startup that requires a physical office space. If you don’t have a need for much space, the only real alternative to a coworking space is finding a small office lease, which is probably going to be more expensive with fewer available amenities. Based on a strict comparison, coworking spaces are objectively superior in most cases.
Of course, if you’re comparing working in a coworking space to working at home or in a cafe, the comparison becomes more difficult.
The Baseline ROI Equation
In investing, return on investment (ROI) is a relative measure of how much return you get for the amount of money you invest. If you invest $100 in an asset, the asset will need to increase to at least $101, or provide you with at least $1 of benefits on top of holding its value, to be considered in positive ROI territory.
With this in mind, let’s say you spend $5,000 a year on a coworking space. For that coworking space to have a positive ROI, it needs to provide you with more than $5,000 of value. Considering the number of benefits that this type of workspace can provide, it’s quite common for people to see a measurably positive ROI in their coworking space investment.
Let’s take a closer look at the costs and benefits that make this equation work.
The Costs of a Coworking Space
Depending on where you live, what type of space you’re looking for, and which amenities you want included, you’ll likely pay somewhere between $200 and $700 per month for a desk in a standard coworking space. The amount of space you have, the amenities to which you have access, and other variables can influence your price.
This is generally the only expense you’ll face in finding a coworking space, though you may have other incidental costs, like parking fees.
The Benefits of a Coworking Space
Can the benefits of a coworking space amount to more than this monthly expense?
Let’s take a look.
- Greater productivity. Many people find themselves more productive in a coworking space. It’s an office-like environment that encourages focus and productivity, and you’ll be surrounded by other professionals who can keep you motivated.
- A professional image. Thousands of coworkers choose a coworking space so they can cultivate a more professional image. This is especially important for small consultancies, startups, and burgeoning small businesses.
- Networking opportunities. It’s hard to overstate the value of connections, and working at a coworking space gives you the opportunity to meet countless new people. Whether you’re looking for partners, investors, or just a peer group of like-minded professionals, you can find what you’re looking for here.
- A sense of community. You can’t objectively measure the value of community, but it’s a major advantage that’s worth including in your overall ROI assessment. Working in a coworking space every day, with the same people, gives you a sense of belonging.
- Other cost savings. Joining a coworking space can also help you save money on other would-be expenses. For example, you may not need to pay for internet, coffee, or other office necessities on your own if they’re all available through your chosen coworking space.
Evaluating the Impact of Location on Coworking Space ROI
When considering whether a coworking space is worth the investment, one crucial factor to analyze is the location. The location of your chosen coworking space can significantly impact the return on investment (ROI) you can expect to receive.
Coworking spaces are situated in various neighborhoods and cities, each with its unique advantages and drawbacks. The proximity to potential clients, partners, and collaborators, as well as the overall business ecosystem in the area, can affect the opportunities and benefits you derive from your coworking space.
For instance, being in a coworking space in a bustling business district might offer more networking opportunities and increased visibility, potentially leading to a higher ROI. Conversely, choosing a coworking space in a quieter suburb may provide a peaceful environment but fewer networking prospects.
Measuring the Long-Term Value of Coworking Space Membership
While evaluating the return on investment (ROI) of a coworking space in the short term is essential, it’s equally important to consider the long-term value of membership. Coworking spaces can provide various benefits that extend beyond immediate financial gains.
One key aspect of long-term value is the potential for professional growth and development. Over time, the connections you make, the knowledge you acquire, and the skills you develop in a coworking space can significantly enhance your career prospects. These intangible benefits may not yield an immediate monetary return, but they can lead to substantial gains in the future.
Moreover, as your business expands, the flexibility of coworking spaces can accommodate your evolving needs. You can scale up or down, access additional amenities, and explore different locations within the coworking network, all without the hassle and long-term commitments associated with traditional office leases.
In many cases, yes, a coworking space is worth the money. That doesn’t mean that every coworking space is a good fit for you, or that you’re guaranteed to double the money you invest in one, but it does mean there’s significant potential in starting or continuing your career in a workspace you share with other patrons. Always do your due diligence before signing up for a new coworking space.