Cost of Coworking Spaces vs Traditional Offices: Which Workspace is Better For Your Business

One of the most common dilemmas a business owners deals with is deciding what sort of space they need.

Many businesses are torn between establishing themselves in a traditional office or a coworking space, but before delving into a shared workspace it is important to know how much do coworking spaces cost? A coworking space cost is split amongst a number of variables including its location, the features and your desk requirements.

Differences between Coworking Costs & Traditional office Costs

The first and most obvious difference between coworking and traditional office costs, is that one is paying for the usage of shared space and facilities, while the other is paying for a private space.

Because of this, coworking spaces will always be cheaper than a traditional office, especially because of contractual agreements. A typical lease length of a coworking space can range from month-to-month, six months or one year, while business owners in a traditional office will find this can span anywhere from three to 25 years.

This may paint the picture of a traditional office not being cost ideal for businesses but before making that decision it is important to know what flexible workspace is, and understanding the list of differences between the two:

• As a coworker you will be sharing the workspace, kitchen and other typical office facilities with other people. In a traditional office everything is yours.
• Coworking spaces are completely furnished, whereas a traditional lease would require you to furnish the space.
• A traditional long-term lease typically allows you to sublet any excess space. With a coworking space this is not an option.
• A traditional lease will often present fluctuating operational costs as part of your building's maintenance cost due to the utilities, building improvements and other factors varying every year - creating uncertainty on your yearly payments. A coworking space will only charge you for shared area maintenance which means charges will be consistent.

Average Coworking Space Cost in the UK

Cost and value is generally the deciding factor when choosing between a coworking space and traditional office.

As of 2022, the most recent reports indicate that globally the average cost for a hot desk is around £173. Meanwhile, the average cost for a coworking hot desk in the UK is £202. This cost will vary based on what city the space is in, along with the provider you select.

For example, the average price for a hot desk in London is £273 which indicates a clear elevation in price based on the city. Based on reports, typically the number of coworking spaces in the city may also influence the price. This can also be observed in London, with the city containing at least 240 coworking spaces and establishing itself as the most dense shared workspace city in the UK.

This is where price versus value comparison is essential for a business. When looking at Servcorp's coworking spaces in the UK, with addresses such as One Mayfair Place, Dashwood House, Leadenhall Building and more, the yearly costs are below the average price whilst providing the most amount of features in a thriving business district.

What's Included in a Coworking Membership

A membership to a coworking space will offer you access to communal areas, meeting rooms and other business services.

A typical coworking membership includes a furnished space, Wi-Fi, cleaning, meeting room access and a shared kitchen. However some businesses will require more services to assist in maximising their efficiency by taking away additional stressful tasks that may arise during the work day.

For example, Servcorp's coworking spaces provide a range of features including:

• Furnished space
• Fast and highly-secure Wi-Fi
• Unlimited tea, coffee and water
• In-house I.T. support which provide immediate assistance
• A local landline number for your business and a dedicated receptionist to answer your calls as you dictate
• Our address becomes your address, allowing you to showcase it on your business cards, websites and any other marketing material.
• Secretarial team assistance
• Printing, copying and scanning from any desk

This is where comparing packages is essential.

Your Desk Requirements

Coworking spaces usually have the option between selecting a hot desk or a dedicated desk.

A hot desk is a workspace that is available on a first-come, first-served basis. This type of desk would be more beneficial for businesses who don't require a physical space to store any belongings or materials as it provides the freedom and flexibility to use any available desk within the coworking area. Knowing what hot desking is will be a good start for businesses looking to explore flexibility in their workplace.

A dedicated desk is your own personal workspace which can be customised to your business' needs. This type of desk would be more beneficial for businesses who require a physical space to store materials or belongings as it provides security and the ability to personalise the area. Dedicated desks usually come with 24/7 access, allowing you to come and go as you please.

How Often You Plan to Use the Space

When deciding between a hot desk or dedicated desk, a primary consideration should be how often you plan to use the coworking space.

If you only require a workspace a couple days a week or for specific project-based work, then hot desking would be more beneficial as it's a lower cost option and you're not tied down to any one desk. This is often the preferred choice for remote workers.

On the other hand, if you require a workspace on a daily basis, need flexibility to use the space at any time of the day and prefer having a customisable desk to create a sense of personalisation, then a dedicated desk will be your go to.

Is Coworking Worth It For Your Organisation?

When it comes to whether coworking is worth it for your organisation, this really depends on the type of business you operate and what your workplace needs are.

If you have a remote team or workers who frequently travel, then providing them with access to a coworking space would be beneficial as it would give them a place to focus and be productive when they're in town.

If you're a small business or startup, then coworking could be a great way to network and collaborate with other like-minded businesses. It can also be a more cost effective option than renting out your own office space.

Coworking spaces can provide businesses with a number of benefits, however it's important to weigh up the cost versus the value to ensure it's the right fit for your organisation. If you are still relatively new to the concept of coworking, then it may be worth doing some further research on what coworking is before making the decision.

Looking for office space for a finance company? Find out more in our guide.