Traditional Office or Coworking Space? Breaking Down the Pros and Cons

Selecting the right workplace for your organisation is an incredibly important decision. If your business is growing and requires a space of its own, or if you’re just starting out, making the right choice can lead to fantastic outcomes. Many businesses are faced with two choices at this point – lease a traditional office, or rent space in a coworking office?

Both options do come with advantages, but it’s essential to choose the option that will allow your business to thrive.

Understanding the options available to you

Traditional offices and coworking spaces both offer a viable option for businesses requiring office space. However, they operate in very different ways – a traditional office is leased by your business, and is exclusively for the use of your employees (or who you permit to use the space). On the other hand, a coworking space will see you sharing common areas with other businesses and even freelancers.

A dedicated office represents a larger commitment for your business, but with that commitment comes all the benefits of your very own space. Coworking offices represent much more flexibility (often month-to-month agreements), but the space is not exactly your own. At the end of the day, it’s up to the business to decide which space fits their needs best.

What are the key differences between traditional offices and coworking spaces?

There are a number of key differences between a traditional office and a coworking space. It’s important to understand how these differences might affect your business operations going forward so that you can make the right choice.

Key advantages of traditional offices

Traditional offices still represent the gold standard, offering privacy, control, and stability. These are important considerations for businesses that want to build culture and manage operations on their own terms. An exclusive office also provides a wonderful foundation for ongoing growth, ensuring your business is secure well into the future.

Organisations can also customise and brand a permanent workplace to reflect their values and goals, while also choosing a location that suits staff and clients. A private and quiet office environment also contributes to better employee wellbeing, offering spaces for focused work as well as relaxation.

Here’s a quick summary of the key advantages:

• Better privacy and security.
• Strengthen company culture and teamwork in your own space.
• Design and fit out the workplace to suit your needs.
• Choose a permanent location that supports staff and clients.
• Promote employee wellbeing with a private, quiet environment for work and relaxation.

Key advantages of coworking spaces

Coworking spaces have become increasingly popular because they offer flexibility and simple, straightforward contracts. This makes them a good choice for small businesses and startups, but they do lack the reliability and sturdy foundation that larger organisations require for sustained success.

Shared work spaces allow businesses to adapt easily as their circumstances change, making it easier to add or remove seats as teams grow or shrink. Monthly agreements mean it’s stress-free leaving at short notice, and all costs are lumped into one single fee… which can be expensive. However, it’s suitable for those businesses who require the flexibility, such as new startups who do not want to be tied down by a longer lease.

The key benefits of coworking spaces summarised:

• Flexible contracts.
• Easy entry and exit with minimal commitment.
• One fee that covers rent, utilities, and facilities.
• Good option for small teams or uncertain growth paths.

Comparing the costs

Comparing costs is essential if both of these are viable options for your business. 

Traditional offices are usually rented out at a per m2 price, with additional costs added for fitouts, utilities, facilities maintenance and more. However, over the long-term (and depending on a number of factors), a dedicated office tends to be more affordable.

Coworking spaces, on the other hand, are generally priced per desk, or per private room. All associated costs are bundled into that one fee, which makes it easier to manage. Over time and when measured per m2, coworking is generally more expensive.

If you’re unsure about whether a traditional office is a good fit for your business, you should always seek out expert advice and support from a commercial tenant advisor.

Get expert advice with Niche Advisory

If you’re deciding between a traditional office and a coworking space for your business, there are a number of factors you’ll need to consider. This can be a time-consuming and confusing process, which is why getting support from a tenant representative is always a great option. 

At Niche Advisory, our team can help you find the right workspace, no matter what stage your business is at. We find and compare office space in every Australian major city, ensuring our clients have the environment they need to thrive.

Book a consultation with our team today.