20 Nov 7 Secrets to Running a Great Co Working Space
Australia is one of the fastest growing co working countries in the world. There are now over 100 co working spaces with that number growing every year. But despite the trend, the reality of operating a co working space also has its challenges. From a legal perspective, there are many areas you need to be aware of to get the business foundations solid so you can focus on creating a great community. We’ll be looking at each one in the forthcoming weeks.
Here’s the first secret to lay the foundations for co working greatness.
Secret 1. Make sure you negotiate your commercial lease with favourable co working conditions
Commercial agents are still getting their heads around co working. It’s OK, they’re in real estate, which has had standard forms for years. You will no doubt present a challenge for them. Here’s some key things to remember when undertaking this process:
- Your “permitted use”: This has to be broad so as to cover what you are actually doing. Something like: “Serviced office & co working space for individuals running a variety of enterprises”
- Plan to Expand: Always plan to expand and negotiate the option at the start e.g. you may need to create team offices to cater for growing companies
- Rent: Try for a 3mth rent-free period, but do the math on that. Look at market value of properties around the area.
- Other Tenants: Who are the other tenants in the building? Will this create a positive or negative impact on them?
- Security issues: Is there additional security required? Leased area needs to be secure
- Outgoings: Make sure you cap these preferably annually.
- Rent Review: You need certainty – do the math.
- Fit out: Do you have the flexibility you need? It’s a good idea pre lease to work out what proportion will be needed to pay for the fit out if it needs to be repurposed for co working and who will pay ? Think of fit outs to increase value for landlord for future tenants and then ask the landlord to pay or share the costs.
- OHS: Be Aware of warranties re OHS – do your research re building codes if you intend to change fit outs – use professional advisors and assessors.
- Environmental issues: Discuss with Landlord environmental improvements needed and make sure you include these in the contract. You can assess this at pre-lease stage as indicator as to how the negotiation will go.
- Exit plan: Do you have an exit plan? For example lease for shorter terms to leave you with the flexibility to grow or contract, but make sure there are no rent increases at different stages.
So to summarise, you have to consider the future when negotiating your space, as it will likely change as your membership expands and companies grow within your space.