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Caveat Emptor - How Coworking can hurt your business

Flexible workspaces continue to gain popularity, everyone from start-ups to global real estate suppliers is offering Coworking Spaces, but it's a double-edged sword. Consumers are submitting their business to substantial risks if they miss asking the hard questions at the onset. Never has the Latin principle of ‘caveat emptor’ resonated strongly. Buyers beware, with so many Coworking options at your disposal, take the time to pause, reflect and test the critical areas before you commit. Here are the top 6 factors to consider to ensure you don't inadvertently hurt your business.

  1. Financial viability of your supplier
  2. Slow, unreliable IT & telecommunications
  3. Too many distractions
  4. The wrong crowd
  5. Lack of scalability
  6. Unprofessional business image

Review the Checklist below.

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Financial viability of the supplier

The more financially secure the Coworking vendor, the more likely they are to make an investment in the latest technological and communication tools that will be necessary to enhance your business productivity and growth. Ask these questions:

  • 'How much of their business is dedicated to supporting flexible business workspaces?'
  • ‘How long have they been in the market?'
  • ‘How many locations do they have and where?’
  • 'What other services do they have to complement their Coworking space?'

These questions will help you uncover how reliable the supplier will be in a volatile, economic market. You wouldn’t move into a building that’s scheduled for demolition in 12 months. So, why take the risk of potential business downtime, added setup and moving costs?

Slow, unreliable IT & telecommunications

Not all shared workspaces (in fact, not many) have the capabilities to operate as a telco and Internet provider. You should question the supplier on:

  • ‘How quickly they can get the Internet up and running?’
  • ‘How fast is the Internet, does it have a 1 to 1 contention ratio?'
  • 'How many other businesses will be sharing that same connection?’
  • ‘Is there an online portal for clients to change business preferences?'
  • 'Can you book resources in real-time locally, interstate or overseas?’
  • ‘Can they create a phone number for your business in a matter of minutes?’

An absence of these capabilities will impact your productivity, and affect the quality of your working life.

Too many distractions

One of the token benefits of Coworking space is that it enables collaboration. It’s a great to see a thriving work environment with employees conversing with one another. But this can also work against you. A Coworking space that enables that level of openness can often be too distracting. Most people don’t realise just how loud they are when speaking or when on the phone.

Individuals who can tune off from distracting noises and the environment around them thrive in Coworking Spaces. But if you’re not one of these people, then you should double-check with the Coworking Space to ensure they have a modesty or privacy room that’s free of charge. 

The wrong crowd

Success comes from having the right kind of people around you, who can provide guidance and mentorship. You don’t simply become more successful because you are around other entrepreneurs. The power of collaboration and networking with others comes when you are surrounding yourself with people who can share insights and enhance your business. Take a close look at the clients that occupy the Coworking Space and ask:

  • 'Are they entrepreneurs from established companies that can share their experience with you?'
  • 'Or are they entrepreneurs at the same stage in their business as you are?'

A good balance of both is needed to foster the right insights for your business

Lack of scalability

You may be looking at Coworking options because it’s the most cost-effective solution that fits your budget. But have you thought about your business in two years, five years, even ten years down the track?  

  • 'Will your choice of Coworking Space allow for the growth and expansion of your business?'
  • 'Do they have virtual address facilities to build your business presence globally?'
  • 'Can they handle your technology needs now and in future?'
  • 'Do they have short-term office space or other options should your business grow quickly?

You don't want to think about your workspace needs and staff each time your business reaches the next stage of growth. When you reflect on the operational and setup costs that will be required each time you need to do this - it will be an expensive exercise. So you need to find a Coworking Space provider that will provide you with the right platform for growth now and in future. Better yet, a seamless transition where your telephone umber and address can stay the same as you grow.

Unprofessional business image

The term ‘Coworking’ conjures images of pinball machines, table tennis, bean bags, scooters and associated with words such as ‘hip’ and ‘trendy.' But truth be known, this is the perception by many startups and people from within the industry. Your clients and potential customers don’t necessarily think this! Your business image should reflect the type of clientele you are trying to attract. An image of a 'hip' and 'trendy' business may not be the best option for you. Instead, you want to show off your professionalism and level of service. 

Your office location and the company you keep is critical your success. Take a look at the other companies using the Coworking Space. Also, think about how easy it's been to join the Coworking Space. Do they let just anyone join or are they exclusive? You don't want to risk working with the wrong type of businesses. Forget the adage of ‘keeping your enemies close’, what matters in business is the company you keep; it is about the connections you make and ‘who you know’ these days that will help you achieve success in many aspects of life.

Our advice to you

If you're considering Coworking Spaces, test the vendor on these factors. Remember 'Caveat Emptor - Buyer Beware' - choose carefully, now and in future - should you choose not to, then proceed at your own risk.

Come and talk to the team at Servcorp, we have been in this business for over 40 years and worked with over 35,000 businesses globally. If you're short on time, let us save you the trouble of going through this assessment, choose a Coworking Space supplier that you can trust to tick all the right boxes. Choose Servcorp's Coworking Spaces - the only Coworking Space with a world-leading technology platform.