Since 2010, the number of coworking spaces has grown by 50% each year; in 2018, the number in America rose by 16%. Evidently, this type of office space is rapidly becoming the norm.
While it's non-traditional to share office space, it's obviously something that provides many benefits. Otherwise, why would it be so popular?
But as with all good things, there are always the negative sides. In this article, we'll discuss both the pros and cons of a coworking office space.
Pros of a Coworking Office Space
Below are a few reasons why you should consider a coworking office space.
You'll Save on Rent
If you're bootstrapping for your business, you'll have very little capital to work with. Shelling out a large sum of money every month to pay for office rent may not be feasible for you. One of the main perks of a coworking office space is its rental fees are usually lower than an office's.
They Come with Amenities
Most shared office spaces come with things like good internet, lounges, and meeting areas, so you won't have to seek out other places for things like client meetings. Some coworking spaces also have weekly parties and other fun programs, so if you're trying to attract employees to your company, these can be great perks for them.
Get Easy Networking
Coworking spaces always attract like-minded people, which means you can work and network effectively at the same time. You may find other professionals who you can collaborate and innovate with. Plus, they may be able to introduce new clients.
Cons of a Coworking Office Space
Here are some reasons you may not like having a coworking space.
Too Many Distractions
If you need quiet, you probably won't get it here. Other people may talk, play music, or have impromptu meetings, which can all highly distract you from your work. This can mean you have a lack of privacy as well.
There May Be Competition
Other people in your industry may have the same idea of using a coworking space, so you may run into competition. Things can get awkward if you have to see them face-to-face every day.
If you keep odd hours, you may run into problems here. Most spaces are only open 9:00 am to 5:00 pm, which means you'd have to find another working space after hours.
Pick a Space That's Right for You
When it comes to a coworking office space, it's not a one-size-fits-all solution. While it may be a great place for a small startup team, it may be a distracting space for others.
After assessing all the pros and cons of a coworking office, only you can determine if it's right for your company. So don't just follow trends. If, after some careful consideration, you feel like a traditional office is best for you, then it's completely fine to opt for that instead of going with the crowd.
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You might be a rock star at unplugging the kitchen sink or crafting a killer bridal updo. You might love to transform the backyard into a wonderland. Maybe you're that guy who can fix anything.
Whatever your skill, kudos for following your passion and turning it into a business you can call your own. What you might not be prepared for is all the business stuff that comes with chasing your dream and becoming a small business owner.
But for your business to grow, you have to be as good at running a business as you are at the things your business does. As a small business owner, you need to understand the ins and outs of running a business.
Learn about these finance terms related to running a small business.
Accounts payable is the term used to identify the money you owe to others. It might be another vendor or supplier. They are your business obligations owed to others.
Think of accounts receivable as the opposite of accounts payable. The receivable part is the money owed to your business for your services. If you provide the service and invoice a client, it becomes your accounts receivable.
This is the term that explains the income you get over a period of time. The revenue goes into your accounts receivables.
Assets are valuables owned by your company. Assets can be tangible, such as real estate, equipment, and furniture, or intangible, such as trademarks and patents.
A business plan is the foundation of your business. This document fleshes out your mission and vision, ownership details, organizational structure, capital requirements, income projections, and your sales and marketing strategy.
Cash Flow/Cash Flow Statement
Cash flow is the amount of money that comes into and goes out of your business over a period of time.
Each month your business has accounts receivables. This is the cash flowing into your business. Also, each month your business has cash leaving it through your accounts payable.
The cash flow statement records these transactions within a specified period.
Small businesses often need to obtain a line of credit to help them get started and cover their expenses. Your credit limit tells the maximum amount of money an investor or a lender can give you.
Gross Profit and Net Profit
As a business owner, profit is important to you. Understanding the difference between gross and net profit is critical.
Gross profits are the profits you have coming into your business once you subtract the cost of the items you sold.
Net profits are not just the cost of the item minus the cost of the product. It is the profits minus all expenses related to the business. Net profits commonly referred to as the bottom line, explain how much money is left in the business after all the costs and expenses are subtracted.
An income statement, also known as profit and loss statement, shows a business' revenues and expenses.
By studying an income statement, a business owner can easily know their profits or losses. They can also tell if their expenses are too high, and establish whether the business is on course to meet its financial objectives.
Understand These Finance Terms!
Being a small business owner means being business-savvy and keeping an eye on the money. With this guide on basic finance terms, you now have a stronger understanding of your business' finances.
Keep learning and feel free to learn more about how we can help your business.