Overhead can take a big bite out of profits, so it makes sense that businesses are always looking for ways to reduce costs. Because office space, along with the associated utilities and resources, can be a major expense, using a shared workplace seems like a great way to save money. This option does have benefits, but it’s also important to understand the risk implications.
Shared Workplace Arrangements
In one type of shared workplace arrangement, two or more companies might agree to share an office space. They will divide up the office space and determine how to calculate utility costs. They may also agree to share front desk services. Doing this can greatly reduce costs, especially if neither company needs a lot of space or has enough work to keep a full-time receptionist busy.
In recent years, alternative coworking arrangements have also become more popular. Companies like WeWork let people rent a desk in a shared office space with access to various utilities and services. This can be an affordable option for startups, freelancers, remote workers and other professionals in need of a dedicated workspace.
The Risks of Sharing a Workplace
When you share a space, you don’t have complete control over it. Perhaps you like a quiet environment, but the shared space is noisy. Perhaps you like a casual environment, but the share space is stuffy. This can make you uncomfortable. It may also impact client interactions.
The legal and financial risks can be even more serious. If anything goes wrong on the premises, you could end up sharing liability, too. Your company’s reputation could suffer due to its association with another company and its problems. Financially, if the other company goes bankrupt or closes, your business could be impacted.
Internet security poses another threat. If you share Wi-Fi or computers with another company, you’re also sharing the risk of a data breach or virus. Vector Security warns that there are many ways passwords and sensitive documents could get into the wrong hands in a coworking environment.
Best Practices for Shared Workplaces
If you are sharing a workplace, or if you are thinking about doing so, be proactive about reducing risks.
- Before signing up for a coworking space, visit the office to make sure it’s a good match for your business. Make sure you’re comfortable with the coworking company’s practices and policies.
- If you lease the space you want to share, make sure the rental agreement permits this. If you own the space, understand your responsibilities as a landlord.
- Be careful about the other people and businesses with whom you decide to share a workspace. Use due diligence to assess them just as you would assess any prospective business partner.
- Take reasonable care to ensure the common areas of your premises are safe for clients and workers. For example, eliminate slip, trip and fall hazards and ensure lighting is adequate.
- Take steps to protect your sensitive documents, as well as the Wi-Fi network.
Also, talk to your Heffernan insurance agent about your business insurance coverage. Review your policy, and make sure your shared workplace arrangement is covered.