The idea of sharing an office with other small businesses isn’t new — companies like Regus and Intelligent Office have leased flexible office space to professionals for decades. However, coworkers define their spaces as collaborative communities that developed primarily around technology roles in booming neighborhoods.
Coworking spaces, which combine desk spaces, private areas, and shared professional resources, can help stretch your small business budget in at least four different ways.
4 Money-Saving Reasons to Try Coworking
1. Streamline expenses while avoiding the IRS
According to accounting experts, selecting the “home office deduction” on your federal tax return raises your risk of getting selected for an IRS audit. Attorney Robert W. Wood writes in an online Forbes column that the complexity of filling out Form 8829 leads many small business owners to make simple mistakes that can trigger expensive and stressful trips to the accountant’s office.
Coworking space members, on the other hand, can deduct the cost of monthly membership dues as ordinary business expenses.
2. Comply with local licenses and regulations
Finding a roost for your company isn’t always as easy as cordoning off space in your basement. Even if your small business consists of just your desk, your phone and your laptop, local laws and homeowners’ association guidelines could restrict you from operating a company from your home full-time. Even if your neighbors don’t complain, local authorities could require inspections and upgrades that can cost you time and money.
3. Share the burden of monthly overhead expenses
Even if you manage to find inexpensive office space to lease, you still have to contend with setting up electric, phone, water, Internet access and even gas. Throw parking and liability insurance into the mix, and your incidental bills could outweigh your rent.
Sharing those expenses with fellow members of a coworking community not only eliminates the hassle of juggling extra bills each month, your pooled resources can qualify you for higher tiers of service for a smaller per-person cost.
4. Add flexible space without committing to a lease
Paying the lease on a dedicated conference room can get frustrating when you use it only for an occasional client meeting. Most coworking spaces let members schedule time in shared collaboration areas, privacy suites, and conference rooms.
Likewise, if you bring on part-time talent or a summer intern, you can add them to your company membership instead of worrying about bringing them to your home office. You can often hire other businesses from your coworking community to help with contracted tasks like marketing, public relations and technical support.
According to the editors of coworking trade publication Deskmag, the number of coworking spaces around the world has roughly doubled every year for the past seven years. With improved access to facilities and increased specialization among space managers, you’ve got a better chance than ever to shift your small business out of a home office or an expensive lease and into an accommodating community of like-minded entrepreneurs.
Joe Taylor Jr. has covered personal finance and business for more than two decades. His work has been featured on NPR, CNBC, Financial Times Television, Fox Business, and ABC News. He recently completed a personal finance book entitled The Rogue Guide to Credit Cards; (Rogue Guide Books, 2012).
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