For any small business, and especially one operating in a city like New York or San Francisco, paying the rent on office space can be a major cost center.
For businesses with just a handful of employees, sharing space with other companies—a practice known as 'coworking'—can be a great way to keep costs down, and can provide all sorts of other benefits. There are a number of different coworking models worth considering depending on the size of your business and your particular needs.
The most efficient option of all, if it works for your business, is securing part-time space in a community coworking location like New York's New Work City. These spaces charge you a small membership fee that allows you to come in and work a few days a week alongside other individual freelancers and flexible small businesses. If your company is just three or four people, all of who can operate productively on their own much of the time, this can be ideal. You can go in to the office to collaborate when you need to while paying a tiny fraction of what you would for your own dedicated office space.
While nothing (other than forgoing office space altogether, of course) can compete with this solution on price, it obviously can't work for every business. But, even if you need your team together every day, working from their own, dedicated desks, there are plenty of other ways to save money coworking:
- Spaces like Dogpatch Labs in New York City and San Francisco offer a more stable version of the New Work City model. You have your own, dedicated desks as if you were in your own private office, but you work alongside other small teams of entrepreneurs in a space administered by a third party.
- If you have a very small team, and have a good working relationship with another small business with a little more office space than it needs, you can see if it will rent out a few desks to you.
- Finally, you can rent private office space the conventional way, but do so together with a few other small businesses. Going for a larger space can reduce the cost per head for all of you. This sort of arrangement has become extremely common in the New York City tech community, in some cases even for successful, well-funded startups with a sizable head-count. The hit mobile social-network Foursquare, for instance, shares an office with blogging network Curbed and web design company Hard Candy Shell.
Any of these strategies can bring substantial benefits beyond the rent you save every month. Venture capitalist Fred Wilson recently wrote a great post about how many startups, including a number of his portfolio companies, are benefitting from working in close proximity to other bright entrepreneurs. Sharing office space can put you together with people who have skills and insights relevant to your business that no one on your team possesses.
But paying less is nice too.