The economy has been changing in some fundamental ways in recent years – well before the pandemic hit. One thing that hasn’t changed is the importance of entrepreneurship and business ownership.
Entrepreneurs, freelancers and small business owners have quite a few new tools available to them today that weren’t around in the 20th century.
Some of those resources, like coworking spaces and the internet, allow motivated entrepreneurs with great ideas to compete with much bigger players in their industry.
Another fundamental shift in the economy, in large part thanks to the internet, is the rapid growth of the gig economy. Estimates suggest roughly 36 percent of US workers derive either all or part of their income from gig work.
Coworking spaces are often an ideal home for gig workers who prefer having an office separate from their home. Coworking spaces in part grew out of the need for gig workers to have an alternative to expensive commercial spaces. These workers can get all the amenities of a modern business campus at astonishingly affordable monthly rates, often with flexible terms so they aren’t geographically anchored.
Another vital part of the nation’s economy are third party vendors of all different types. Small businesses can contract out an array of administrative and even core business tasks, from accounting and HR to recruitment and marketing. Working with vendors allows businesses to get top-tier service for way less than they’d spend hiring an internal team.
Coworking spaces are an extension of this concept. Sure, the average SMB can rent space in an expensive commercial building, pay for top-of-the-line high-speed internet, hire on an IT staff, deck out conference rooms with projectors and smart screens, furnish a gym, hire a personal trainer, stock a kitchen with snacks and cold brew, etc. etc.
Doing that is within the realm of feasibility, but does it make sense for a business owner to spend that money? Most SMBs or startups have limited space needs, so why not share facility costs with other entrepreneurs, freelancers and small business owners?
When many SMBs and freelancers pool their money, they can recreate a work environment with top-tier amenities for a fraction of what they’d pay if they had to foot the whole bill themselves.
These shared workspaces are an attractive alternative for many startups, SMBs and gig workers, and the growth of the coworking market reflects that increase in demand.
COVID-19 Changed Things for Small Businesses
Maintaining cashflow is a tricky balancing act for a lot of SMBs. Some industries, like food service, have precarious cashflow by nature. They need revenue from one week to keep the doors open the next.
What happens when they are forced to shut down for weeks or months? The revenue they need to keep the walk-in stocked and the doors open disappears. They can’t cover their rent, labor costs, benefit packages, utilities, debt payments and so on.
A September 2020 estimate from Fortune suggested nearly 100,000 SMBs didn’t survive the temporary shutdown. Many more have had to downgrade operations, lay off workers and break leases.
Coworking spaces are uniquely positioned to help businesses get back on their feet once startups begin returning to the scene.
For example, imagine a recruiting firm – a type of business likely affected by the pandemic – had to downsize from 50 employees to 10 employees. They certainly don’t need the large commercial space they had pre-shutdown, but they need some type of workspace to meet potential job applicants.
Instead of getting locked into a year-long lease they could instead utilize affordably priced desks at a coworking space like MAC6. The business doesn’t need to worry about the costs of utilities, internet or other overhead because the coworking space covers those or offers access to them at affordable rates.
Coworking spaces like MAC6 also have conference rooms available to members for meetings with potential clients or job candidates.
Not every business can benefit from the flexibility and cost savings offered by coworking spaces. Food service and hospitality businesses are the most obvious examples of SMBs that don’t really have an affordable alternative to the traditional storefront. But many SMBs and startups will be able to get back to work and begin rebuilding their client base by utilizing coworking spaces to keep operating costs low.