Prior to the Great Recession, John Camara saw coworking as a new and growing trend in Connecticut. He wanted to start his own company that would allow small businesses to save money by renting shared office space in Bristol.
But the recession caused Camara to lose half the start-up capital he raised to open his own coworking location, forcing him to put his plans on hold.
Not only did he lack funding to move forward with his business, but demand for coworking space surprisingly took a hit.
Coworking locations across Connecticut, which only began to come into existence about five years ago, were hit hard by the recession as demand dried up for even the cheapest office space.
It was a surprising turn of events for a fledgling business model that was thought to be an appealing option to entrepreneurs and individuals who were out of work, looking to start their own business and in need of a place to set up shop for low rent.
But to avoid any extra costs during the past few years, many people were hunkering down and running their businesses from home, industry officials say.
“Combine that with banks not being familiar with coworking, and the fact that half of coworking members are typically IT professionals in which the state of Connecticut has a hard time keeping them in the state, creates a number of challenges to getting a coworking facility up and running,” Camara said.
Coworking is a relatively new type of collaborative work environment that was created to serve independent professionals and start-up companies looking for more affordable office space.
The concept first became popular in the Pacific Northwest and has slowly made its way to the Northeast.
Connecticut has about a half-dozen coworking facilities in the state in locations ranging from bustling metropolitan centers like New Haven and Stamford to relaxed suburban environments like Simsbury. Similar to the virtual office format that global companies like Regus offer, coworking provides the added benefit of a collaborative working environment.
Julie Braun, the co-founder of Super Interns, a virtual intern recruitment and support service company for small businesses and non profits, has been a member of Gaggle Offices, a coworking center in New Haven, for about a year.
Braun says that in a post-recession environment where start-up companies, micro-businesses, and independent professionals encounter significant obstacles running their businesses, coworking offers a cheaper, more effective solution. Besides cheap rent, coworking also offers lower overhead costs because office equipment and supplies, wifi, electronic equipment and furniture are provided for no additional cost.
Most coworking facilities in Connecticut rent space on a day-to-day basis with an average price of $25 per day, Braun said. Some facilities such as the Grove, a coworking space in New Haven, offer monthly rates up to $250 a month for full-time members.
Jaye Donaldson, the president and founder of coworking facility group88 in Simsbury, says pricing is also needs-based.
Sometimes group88 will have members who drop in for part of the day and pay an hourly rate like an attorney working on a deposition or a doctor who needs a quiet space to do research, Donaldson said.
“The pricing all depends on what the member’s needs are,” Donaldson said.
Braun said coworking also provides a much more efficient work and community environment that spurs growth and innovative thinking.
“Enjoying human company makes a huge difference in the productivity of my company,” Braun said. “It is conducive to creative thinking; it fosters brainstorming, and freed me from the isolating feeling of working at home. As a result, in one year since joining Gaggle Offices my business has doubled.”
And despite the struggles experienced by some coworking locations in Connecticut over the past few years, industry officials say things are finally starting to rebound.
Nationally, for example, 355 new coworking locations opened in the past year alone, according to Deskmag, a coworking industry magazine.
Camara said he hopes improving economic conditions will allow him to open a coworking site in Bristol next summer called Fluid Hub. Camara said he is still working on lining up financing for the project, which will likely include a Small Business Administration loan.
In the meantime, Camara said he is doing some IT consulting to try to save money and establish a relationship with a bank.
He’s also using his spare time to recruit coworking members.
One sign of hope for the fledgling industry is new interest from the nonprofit sector.
CIL, a Hartford based non-profit development organization recently partnered with the Connecticut Association of Non-Profits to develop a coworking-type office center in Hartford.
Martin Legault, the president and CEO of CIL, said it will be a place where small nonprofits can come together and share resources to reduce overhead as well as share ideas and services.
Legault envisions it to be a supportive environment that would reduce the overhead burden placed on smaller nonprofits, which have had particular trouble in this economic recession maintaining their giving rates.
