Finding the right physical space to get your startup off the ground is an important part of a new business. Working from home or even your garage may be a good way to save money when it is just a couple of people but eventually, you will need more space to collaborate with your growing team. Co-working spaces are popular options but they also pose potential problems. When should you use a co-working space for your startup?
A Long-Term Commercial Lease May Not Make Sense
Eventually, a commercial lease will give your business some stability in location and business operations. However, a commercial lease may not make sense in the beginning as the company is growing and evolving. A commercial lease may lock your business in to a set-term contract for two to five years. Breaking the lease early because the space no longer fits your needs can be an expensive proposition, especially if the property owner built out the space to the contract specifications.
Benefits of a Coworking Business Environment
Under the right circumstances, a co-working space can be supporting, energetic, and benefit from a shared entrepreneurial spirit. Co-work spaces can be more economical for startups who may not need an entire office. They also provide ready-made workspaces, complete with high-speed internet service, utilities, and furniture. In addition to cost savings, a busy entrepreneur may not have the time or energy to deal with the footwork and paperwork necessary to build out an office.
Limits of a Coworking Space
A co-working space may seem like the best midway option for having a physical location for the business that allows some flexibility for your evolving business. However, the terms of the co-working contract may also place restrictions on your business plans. A co-working space may not be available 24/7 when you need to put in extra time on a big project. If the co-working space becomes popular, the month-to-month terms of the contract may result in a sudden increase in cost to use the relatively limited space.
A growing business will generally outgrow a co-working space pretty quickly, leaving it as a stop-gap measure. However, even for small teams, the reality of sharing a workspace with others can be difficult. When sharing a co-working space, you may have little recourse for disruptive people who are interfering with your team's ability to get things done.
Unfortunately, many startups remain in a co-working environment longer than makes sense. After figuring in the costs and complications of sharing space, a commercial real estate option may have been a better option.
Negotiating a Lease to Give Your Business the Most Flexibility
Talk to your Massachusetts business attorney about finding the right space for your growing business. Your attorney can negotiate a lease option that will give your business the most flexibility for growth, changing needs, and ensuring the property provides the space your business needs to succeed.
The Katz Law Group, P.C. has more than 35 years of experience representing businesses across Massachusetts and New England. This includes negotiating commercial contracts, business litigation, and handling employment contract disputes. If you have any questions about contracts, business formation, and business litigation for your startup, contact the Katz Law Group today.