*8 min read

These are common terms for workspace in the startup community all around the world. However, what is the difference between them and where should you place your new or small business? It’s a challenging question and one, that if you get right, will give your business a fighting chance of success. Incorrect, and you join the 90% of new businesses that fail in the first few years of trading. In Australia, the water is often a little muddy when defining these, so knowing what there is and finding the right space for you is vital!

Coworking Spaces are predominately open-plan offices where companies can rent a desk (or multiple) on an ad-hoc basis or alternatively, settle in with a dedicated desk for month on month usage. As published by The University of Sydney Business School in Mid 2017, they define coworking as “the practice of working alongside people with whom one shares a workplace but not necessarily an organisational affiliation.” They are also “places shared by people from different organisations, often freelancers, who work alongside each other, share infrastructure and often engage in joint activities associated with learning, innovation and collaboration.” Anyone can pay for space in a coworking space, i.e. they are not usually selective on the type of business applying. A couple of main examples of large coworking spaces are WeWork (they currently have $4.4b worth of investment in it worldwide!) as well as Wotso, and hundreds of other smaller ones such as The Common Room, Upstairs from Giulia or Desk & Studio

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Shared Space are defined as private spaces. I.e. a business that has spare space within their existing premises and rents it out to another business for use. This type of situation helps both businesses, that is, the one renting out the space and the one renting the space. It enables the business renting our the space to make additional revenue to cover the costs of the lease or property whilst they aren’t using it, while enabling the business renting the space (usually a startup or other small business), the opportunity to access commercial space without the risk of expensive long-term leases hanging over their heads. The collaboration between these two businesses previously only happened via word of mouth or through “someone you know”. However, with the introduction of shared space platforms such as Altspc, businesses can now easily list or book space as they require.

Serviced Offices offer many of the same services as co-working spaces, however, the spaces are usually rented for longer terms and are internally defined by more mini “offices”. They are often filled with slightly more stable corporate focused companies requiring anything from phone systems to assistants and secretarial services. Similar to coworking spaces, anyone can pay for space in a serviced office space and are not usually selective on the type of business applying for space. Good examples of serviced offices are Christies, Regus and Servcorp.

Incubators are designed to take budding entrepreneurs with exciting ideas and mentor them in running a successful business. They help early-stage startups get off the ground and assist them, anywhere from a few months to a couple of years. They’re provided with office space again, similar to coworking spaces however, here they will also support the business with additional services such as business guidance, mentoring, introductions, connections, accounting, technical support and at times, even financial support. Incubators are selective on who they accept into their space. Some incubators require open access to the company’s business plan and financial position. Examples of incubators are Pollenizer, Fishburners (although closer to a high-end selective coworking space), Tank Stream Labs and University of Technology Sydney (UTS) Hatchery.

Accelerators usually take on businesses that have been operating for a while. The types of businesses they take on are often more established, with a track record in already generating revenues and at a stage where applying their particular “accelerating” growth formula and drive success for the business. The ultimate goal here for the accelerator is to attract investors &/or buyers for an exit strategy. The period of support for accelerators varies from a few months to a few years, depending on the business. All accelerators require full access to the company’s business plan and financial position. Like incubators, accelerators are selective on who they accept into their space. Smart Company’s article on Australian Accelerators shows a list of the top 24 Australian Accelerators such as Slingshot, Bluechilli, University of Technology Sydney (UTS) Hatchery+ accelerator and University of Queensland’s ilab accelerator.

So what should you be thinking about when choosing out of the above:

  • How much space do you need? Is it just you or do you have a team also needing space?
  • Do you need a separate, private space?
  • What type of space do you need? I.e. do you just need desks or are you trying to be the next Lorna Jane, Body Mind Life, Gelato Messina, an Amazon supplier or another type of business that needs more than just a desk.
  • Do you need to “meet” clients? If so, consider a place with available meeting rooms, otherwise ensure the space is close to cafes.
  • Do you require support such as mentoring and business connections? If so, an incubator might be the best option for your startup.
  • How often do you need the space? A few hours a day, a couple of days a week or full time? And for what length of time?
  • What is your budget?
  • Decide what type of culture you want to put your business into?
  • Where do you need to set up your business? i.e. the location.
  • Are there skills that you require that you can access through an incubator or accelerator?
  • Do you need any special equipment for your business?

The below chart lays out the key components of each type of space. As many businesses are different, the type of offering you use for your business must fit your business perfectly, otherwise, it could slow or damage the business’ potential growth

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Coworking

Shared Space

Serviced Office

Incubator

Accelerator

Culture

Influenced via the community & driven by the coworking management. Usually very noisy
Driven via the business you are sharing with
BYO culture. However it will be tough if there are only a few of you
Influenced via the community & driven by the coworking management
Influenced via the community & driven by the coworking management

Amenities

Shared amenities
Some private amenities/some shared amenities
Private & shared amenities
Shared amenities
Shared amenities

Extras

Community managers on hand to assist
Use of existing businesses equipment (if provided)
Assistant services (secretarial/ receptionist etc)
Business support provided through mentoring and business development
Business support provided through mentoring and business development

Lease

Flexible terms
Flexible terms
12 month+     lease agreements
dependant on success
dependant on success but usually 1-2 years

Privacy

Minimum privacy
Depends on space provided by business
Maximum privacy
Min-avg privacy
Min-avg privacy

Applying for Space

Easy
Easy
Medium
Medium to Difficult
Difficult

Cost

$-$$$
$-$$$
$$$
$-$$
$$$- Equity

Best Suited For

Businesses needing a desks & meeting rooms
Businesses needing more than just a desk such as retail, trade, health, beauty industries
Small corporate focused businesses needing a desks & meeting rooms & office support services
Startups needing support within their sector often willing to give up some equity
Revenue generating businesses needing support within their sector to drive growth who are willing to give up a chunk of equity

Where Does Altspc Fit In?

Altspc sits above the shared space area however with a distinct difference, Altspc’s platform enables any business in any industry list or booking spare commercial space, not just desks. This means that we support the whole commercial ecosystem, not simply those needing a desk.  We offer our community members an easy safe channel to rent the right commercial space for their business.

Altspc is in a highly unique position as it helps businesses who have spare space cover the costs of that space whilst they aren’t using it, generating additional incomes each month to help them grow their business. Then on the other side, Altspc helps more entrepreneurs get off the couch and give their business idea a go without all the usual risks that go with it!

Altspc is for the entrepreneurs looking to be the next Lorna Jane, Body Mind Life, Catch of the Day or Gelato Messina!

 

Who wrote this post… 

Altspc is an online space sharing platform that lives to help sole traders, micro & small businesses kick-arse and grow sustainably. Discover the lease-free way to rent out or book unused space by the hour, day, week or month.

If you’re looking for affordable and flexible business space, try our FREE Space Finder Service – we’ll send you a customised shortlist of spaces, zero obligations!

Interested in learning how much money you could be making from your unused space? Check out our Free Calculator.

 

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