Sowmya Sankaran / Reading Time: 3 mins
When it comes to choosing an office space for your company, there are several options to consider. In this article, we will explore the two broad categories of flex offices - managed offices and coworking spaces - and discuss the ideal choices for different sizes of companies.
For small companies with less than 20 employees, coworking spaces are the ideal choice. As an early-stage startup or company, you may not be certain about your future growth and need maximum flexibility. Coworking spaces offer convenience and flexible terms that allow you to grow within the same facility or explore other locations in the country.
One of the key advantages of coworking spaces is the wide range of flexible models available. You can rent a space for as short as a day, a week, or a month. Operators like GoFloaters even offer month-to-month arrangements. This flexibility is crucial during a stage of high unpredictability in your company's growth.
For mid-sized companies with 20-50 employees, both coworking spaces and managed offices are viable choices. However, coworking spaces still hold an advantage over managed offices in most cases.
Managed offices typically require a two-year agreement, making it harder to grow out of the space if you need to expand. Customizing a managed office to fit your requirements can also limit flexibility. For example, if you need to add five or ten extra seats, it may be challenging to accommodate that within a managed office.
On the other hand, coworking spaces allow for greater flexibility and growth options. They offer more accommodating terms and the ability to scale up or down as per your company's needs. Additionally, given the current financial and economic situation, committing to two-year leases may not be advisable. Therefore, coworking spaces remain recommended for mid-sized companies looking for flexibility.
For larger companies with 50 or more employees, managed offices become quite an important choice. As you grow in size, your IT and security requirements also become more complex. Industries may require custom server rooms, uninterruptible power supplies (UPS), dedicated internet connections, and specific office designs to accommodate collaboration spaces.
Managed office operators can build the office space to your design specifications and accommodate your unique needs more easily than coworking spaces. These operators also tend to be more economical due to longer rental commitments. By committing to a two or three-year term, you can secure lower monthly rent and amortize customization costs into your rent, converting it to an operating expense rather than a capital expense.
Although some coworking operators may provide customization options, they often come at a higher cost. Customization in coworking spaces may require dismantling and rebuilding existing infrastructure, which can add significant expenses to the customization process. Managed office operators have more experience in creating personalized office spaces and can offer more favorable terms in terms of customization costs.
Ultimately, the choice between a managed office and a coworking space depends on your company's growth trajectory and requirements. If your company is growing rapidly, raising investments, and doubling up on growth rates, sticking with coworking spaces provides the flexibility and ease of expansion required. On the other hand, if you anticipate a steady growth trajectory and have specific design requirements for your office, a managed office operator offers a more viable and economical option.
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When selecting an office space, it is crucial to consider factors such as flexibility, growth potential, customization requirements, and economic considerations. By evaluating your company's size, growth plans, and specific needs, you can make an informed decision on whether coworking spaces or managed offices are the right choice for your company.