Coworking as a Business: Which Model Is Best?

Coworking is part of a collaborative reorganization of the global workforce, but does that mean a traditional business model is out of the question?

(The below is an excerpt from an article I wrote for I would encourage you to read the full version and let me know your thoughts! Like so many issues in the coworking community, it has to be decided on a space-by-space basis. I’d love to hear from space owners using these and other models to achieve a cohesive, sustainable community!)

…Most coworking advocates fall into one of two schools of thought on this topic: those that believe coworking is best when it exists as a non-profit, and those who believe coworking can (and should be) a profitable business. The coworking community demonstrates that both (and many hybrids in between) are possible.

Coworking As A Non-Profit

The thing that sets coworking apart from all other styles of working is that it has the welfare, success, and ultimately happiness of the members as its most lofty goal. The community is the most important asset, and everything else–the space, location and amenities–are meaningless if the community is absent. One of the most attractive reasons to choose the non-profit model is the ability to let the community evolve naturally…

Coworking As A For-Profit

What troubles some in the coworking community is that creating a coworking space with the sole purpose of making profit can drive the focus away from the coworking values of collaboration, community, openness, accessibility, and sustainability. “Coworking spaces that fully embrace the value of community are not owned by anyone,” writes the founder of C4 Workspace in San Antonio, Texas. “They may be funded by individuals and other sources but they are “owned” by the community.” One can’t just offer desks and Wifi, call it coworking, and wait for the money to roll in…

Coworking As A Not-Just-For-Profit

While it might be easy to equate “profit” with the cut-throat individualism that typifies the corporate world, space owners shouldn’t be afraid to make money from a business that requires hard work. Instead, many look for ways to provide additional, valuable services to both the freelancers in their coworking community as well as the telecommuters, small business owners, and creatives of the community at large. Workshops, camps, classes, and mixers bring people together and make them better at what they do. Better yet, all of these things can exist within the community without defining it…

Read the full version on…

3 Reasons Broke Freelancers Should Be Coworking

You might think that being broke means you can’t afford coworking, but here are three reasons why you can’t afford not to.

By Angel Kwiatkowski

Leaving a traditional job for the freewheeling life of an independent professional is exhilarating in many ways: you decide your schedule, choose your clients, and finally realize the dream of going to work in your pajamas.

One less-exhilarating consequence of becoming a freelancer is that you lose the security of a regular paycheck. Traditional professionals know that check is going to magically appear every two weeks, regardless of whether they worked their ass off or spent most of the week sneaking cat naps at their desks.

Not so for the brave freelancer. When you’re self-employed, no work means no pay. Period.

If you’ve recently decided to branch out on your own, you’re probably already feeling twinges of that deep abdominal panic that  occurs when the bank account dips below the ‘safety’ level. You might think that being broke means you can’t afford coworking.

Here are three reasons why you can’t afford to not be coworking.

New Opportunities – They abound in a coworking space. Whether it’s bartering work with your neighbor, or raising your hand when someone says, “Hey, I have a friend that’s looking for someone to upgrade her website,” coworking attracts work. There’s also the chance that your coworker will see an online job posting you missed, or tell you in advance that their company is looking for some contract help. If you’re not there, you won’t be able to take advantage of it.

Encouragement – You know that panic I mentioned earlier? You’re not the only one that’s felt it. Every single freelancer or business owner has felt that same fear, and lain awake at night wondering how they would make ends meet. Belonging to a community of empathetic freelancers will allow you share those fears without embarrassment or judgment. Better yet, you’ll get free advice (ok therapy) from experienced entrepreneurs about how to budget, survive, and find new work.

Distraction – Being broke isn’t any fun, but that doesn’t mean you have to spend your days hidden in your home office. Instead of retreating from this unique and often difficult life, embrace it. Use your coworking community as a sounding board for ideas, attend networking events and schedule meet-ups. Relax. Laugh. Remember that you chose freelancing because it’s what makes you happy, not because it will make you a millionaire.

Image Credit: Flickr – katerha

#financefriday: Rate Setting

Normally a superhero dons a cape and mask before saving someone.  Today, Greg Fuhrman arrived at Cohere Coworking Community in relatively inconspicuous attire: a blazer. Greg is a “freelance Chief Financial Officer.”  I’ve given him that title because he works p/t or interim for small and growing companies that need a little CFO love.

Greg taught us what a CFO’s role is, why we might want a CFO’s help, how to set and raise rates, adding employees and tips and tricks for securing venture capital!  Yep, all that in just one hour at #frankfriday today.

Today’s financial focus will be on RATES.  How much are you charging and is it enough?

  • Never undersell yourself.
  • Longer projects can be at a lower rate in return for the security of a long term contract.
  • Urgent projects demand a premium rate, sometimes double what you normally charge.  If a company expects you to drop everything for them, it’s going to cost ’em!
  • Measure yourself against your peers.  Your peers are people in the same industry with similar experience.
  • What seems like a lot of money to you may not phase a company with deep pockets.
  • You should not be charging less than $50-60 per hour.  Yep, you read that right.
  • Know what your minimum dollar amount to survive is and work backwards from that number factoring in how many billable hours/month or week you can tolerate as a creative.  (Angel’s note: I’ve noticed that many technically creative people can only produce high quality work for about 5 hours/day. This 5 hours/day is in addition to the more functional parts of freelance like billing, writing proposals and catching up on twitter).
  • When setting your rate, factor in taxes, retirement, insurance and the cost of doing business in your field.  What software or equipment do you have to keep up to date?
  • Get off on the right foot with a new client by telling them your normal rate and then discounting their project.  “My normal rate is $120/hour but I can do $100/hour since this is a large project.”

In summary,  you probably aren’t charging enough.  What could you accomplish if you doubled your rates and worked half as many hours?  Marinate on that and tune in later this week for Greg’s advice on how to raise your rates.

Contact Greg (gregory@fuhrmanconsulting [dot] com) if your business needs an interim CFO, business planning or a long-term strategy.