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THE LAUNCH ISSUE
CONTACT Xxxxxx xxxxxxxxxxxxxx xxxxxxxxxxx xxxxx email@emailaddress.com
The magazine for creative freelancers and small businesses in Brighton & Hove
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magazine THE LAUNCH ISSUE The magazine for creative freelancers and small businesses in Brighton & Hove
BRIGHTON’S BEST
CLAIMING EXPENSES
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P6-7
YOGA
GOOD HEALTH GOOD BUSINESS
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P11
LEAN FOUNDER
SPONSORSHIP
P16-17
P18-19
Brought to you by NLD Accountancy
Welcome
TODO Magazine started off two years ago as an idea for a platform to help freelancers and small businesses, especially the creative digital industry in Brighton & Hove. We are pleased that this idea is now a reality, and our first issue is here. The concept of TODO is to publish useful advice for freelancers and small businesses to help their businesses prosper. Being involved in the Brighton business community, I learned that business owners need
to juggle several skills to successfully grow their businesses. This is very hard, but very exciting at the same time. This is a magazine for anyone who would like to share their business skills and learn from others. We believe this is the only formula to establish successful businesses in the local community. Nilden Ozkan, NLD Accountancy – www.nldaccountancy.com
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HOW TO DO... COPYWRITING
NEWS IN BRIEF
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P9
KEEPING ON TRACK P12-13
TIME WASTERS P14-15
Managing Director/Editor Nilden Ozkan todo@nldaccountancy.com
ART DIRECTION, ILLUSTRATION AND DESIGN Phil Wellington info@ilovenewwork.co.uk
CONTRIBUTING WRITERS Tony Bacigalupo, Simone Bennett, Julia Chanteray, Jenny Lee-Delisle, Ed Molyneux, Joanne Munro, Josh Russell, Paul Silver, Ellen de Vries
PUBLISHER NLD Accountancy Limited www.nldaccountancy.com
SPECIAL THANKS TO Andy Friend for support and advice, John Shann for editing and proof reading, Light Trick Photography for images, Luis Castell贸n for graphic design advice.
TO ADVERTISE Please email Nilden Ozkan todo@nldaccountancy.com
WORKSPACES
ABOUT NLD ACCOUNTANCY
TO SUBMIT AN ARTICLE Please email Nilden Ozkan todo@nldaccountancy.com
漏 2012 TODO Magazine / NLD Accountancy Limited
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All rights reserved. No part of this publication may be reproduced in whole or part without permission from the publisher. The views expressed in TODO Magazine are those of retrospective contributors and are not necessarily shared by TODO Magazine / NLD Accountancy Limited.
CONTACT Xxxxxx xxxxxxxxxxxxxx xxxxxxxxxxx xxxxx email@emailaddress.com
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Brighton’s Best
New Media Freelancers h h
h
h h
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Paul Silver, head of the Brighton Farm networking group, gives us the lowdown on a fresh perspective for the Brighton freelancer community.
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IMAGE BY flickr.com/photos/timdobson/
he Brighton Farm is a networking group for web designers, developers and people with related new media skills who live in Brighton and the surrounding area.
Joining the Brighton Farm You join by coming to the meetings in the pub. Regular attendees are also invited to join our private mailing list. We’re a friendly bunch, everyone is welcome to come along to our meetings to talk about new media and technology, refer work and generate new business.
When are the meetings? Every Wednesday evening, starting 8pm, at the Hampton Pub (currently).
What’s it all about? At its most basic, the Farm is a weekly meeting for freelancers in the new media / technology industries where they can get together, chat about work, issues of self-employment, and generally get some human contact after working on their own all week. More completely, it’s a place where people can gain encouragement and help developing their own companies, get work referrals, set up partnerships, meet interesting people and find out about the latest technology on-line. And drink beer. We’ve been going since February 2003. We generally get around 25 people at each meeting. We’re a very friendly, casual group, so don’t be
scared about coming along. Someone will talk to you, probably several someones. It’s not a drinking contest, although beer is drunk, and it’s not a large group of beardies talking programming, although some of that does happen. It’s a group of generally cheery, self-employed people who like meeting people. If you’d like to meet us, please come along. Brighton Farm is organised by Paul Silver.
CONTACT Paul Silver paul@paulsilver.co.uk www.brightonfarm.com
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CLAIMING EXPENSES for an office at home Ed Molyneux, co-founder of the online accounting software FreeAgent, demystifies the detail of expenses calculation. This is a very useful article for a freelancer mainly working from home.
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ost freelancers use part of their home as an office for at least some part of their work. Some might just do some occasional paperwork in a home office, and most of their time will be at clients’ offices. For others, practically all their working time will be spent in their office at home. Like everything, this has good and bad points, of course.
What Should I Include in the Costs? You should include:
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Rent
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Mortgage interest (but not any repayment element)
Some good news is that Her Britannic Majesty allows a proportion of the costs of running your home as a business expense. This is slightly surprising where limited companies are concerned, since the normal rule for expenses is that they must be ‘wholly and exclusively’ incurred for business use. This rule was hard and fast until 2006, at which point HMRC issued new guidance and allowed common sense to prevail – you can now claim for a room used partly for business purposes.
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Gas, electricity, water
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Cleaning costs
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Council Tax
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Home and contents Insurance
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Repairs and maintenance (but see health warning below)
At the end of the day, HM Revenue and Customs will take a sceptical view of claims of more than about £150 per year, but if they’re fully backed up with evidence and some documentation as to how you arrived at your claim, it’s much harder for them to argue about it.
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Telephone standing charge
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What proportion is allowable? If you work full time at home, the simplest method of working out the right proportion is to divide the
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total costs by the number of rooms in the house. A more precise method is to calculate the square foot percentage the room occupies relative to the entire building. For example a room of 120 sq ft out of a total of 1450 sq ft represents 8.3%. If you only work some of the time there, or just do occasional paperwork, you should divide this full-time number by the proportion of time you do spend there. Working half your time at home and half on clients’ sites would mean you can claim only half the full-time expense.
health warning
example
STANDARD DISCLAIMER
Celia works as a freelance illustrator, and spends about 80% of her working time in her contemporary ergonomic office facility, otherwise known as the spare room. There are seven main rooms in her rented house. She reckons her total house costs, what with living in Ealing and all, come to around £14,000 per year. She plans to claim 80% of £14000 divided by 7, or around £1,600. This she will claim at £133 per month. Good for her.
Please contact NLD Accountancy for further information.
You could also legitimately claim in full for expenses relating to refurbishment or decoration of the office area, but beware! If you do claim for these expenses, when you come to sell your house you may find yourself liable for Capital Gains tax on a proportion of any ‘profit’ made. This usually won’t give rise to a tax bill, but you should know the appropriate house values before and after anyway. As if you wouldn’t anyway.
As always, this tax tip is based upon our experience, and the rules can change. You should always have a word with a proper accountant before making any claim.
USEFUL LINKS HMRC Leaflet on Use of Home: www.hmrc.gov.uk/manuals/bimmanual/bim47825.htm
CONTACT Ed Molyneux info@freeagent.com www.freeagent.com IMAGE BY flickr.com/photos/HENDRY/
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IMAGE BY flickr.com/photos/80877837@N00/
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HOW TO DO... copywriting The steps of copy writing could not be simplified any better. You never know when you need to write copy...
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hen copywriting presses its intended audience’s buttons – it’s brilliant. Things work. The world is a better place. We can all be happy. But writing good copy for yourself is difficult. It’s easy to get in a pickle with it – mostly because its hard to get into your audience’s shoes and then get a solid objective viewpoint on what your audience need to hear from you. A massive part of making your copywriting gripping depends on the questions you ask yourself when you’re preparing to write. Here are the golden questions I use – they seem to work without fail, no matter how fancy or complicated the situation is.
The DEEPER WATERS version In the olden days of my copywriting career I started out with Maria Veloso’s golden questions which I adapted from Web Copy That Sells:
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Who are you writing for (who are the people you’ve been working with, and want to work with in future)?
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What problems do you think they have on a daily basis?
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What would stop them from doing what you want them to do?
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Why haven’t they come to you before?
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Paint a pretty picture of how their life looks now that they’ve bought your product/service.
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What do they need to do as a result?
The simple version
Some bonus curveballs
In the olden days of my copywriting career I started out with Maria Veloso’s golden questions which I adapted from Web Copy That Sells:
We’re getting into the personality of brand now – which is a slightly different kettle of fish – but it might be worth having a go at these questions:
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What is the problem you’re trying to solve?
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Why hasn’t the problem been solved before?
Why is my ... like a tray of warm scones? Why is my ... like an astronaut? Why is my ... like a ….?
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What is possible now?
Try it out. Let me know what happens. Good luck!
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What is different now that you’ve come along?
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What should they do now – book online, make a call?
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CONTACT Ellen de Vries ellen@thecopyhouse.net www.thecopyhouse.net
NEWS in brief The latest news affecting the small business world.
IMAGE BY flickr.com/photos/HYGIENEMATTERS/
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Junior ISAs launch today to help parents save for their children’s future
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arents will be able to open a Junior ISA account for their children at a range of high street institutions, Financial Secretary to the Treasury Mark Hoban has confirmed. Around six million children will immediately be eligible for a Junior ISA, with a further 800,000 children benefiting each following year. All children under 18 who are UK residents and do not have a Child Trust Fund (CTF) will be eligible for a Junior ISA. Mr Hoban confirmed that the limit for Junior ISAs would be set at £3,600. To ensure that children with a CTF are not disadvantaged he also confirmed that, the CTF savings limit will treble from £1,200 to £3,600, aligning it with the new Junior ISA limit. Funds in a Junior ISA will be locked-in until age 18 and roll over into an adult ISA on maturity, meaning that the accounts will help to foster a long-term savings habit among young people. Mark Hoban said: “The launch of Junior ISAs is a clear demonstration of the Government’s commitment to encourage saving for children. Junior ISAs will be open to all parents, regardless of income. This, together with changes made to Child Trust Funds, mean that parents can save up to £3,600 per year for their child.” See www.hm-treasury.gov.uk/press_118_11.htm for more information
Got a story? Then email us at todo@nldaccountancy.com
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IMAGE BY flickr.com/photos/NICHOLAS_T/
YOGA It’s perfect for geeks
Yoga is a system of exercises practiced as part of Hindu discipline to promote control of body and mind. It includes breath control, simple meditation, and the adoption of specific bodily postures, and is widely practiced for health and relaxation.
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eing a smart, talented, focused bunch, geeks are often ‘in their heads’ 24/7. As such, they tend to neglect their poor bodies. Until, that is, their bodies send out a distress signal, such as back pain. Well, I have a suggestion for all the lovely geeks out there: why not spend fifteen minutes a day doing yoga and help prevent those signals occurring. And if it’s too late for prevention, fifteen minutes of yoga a day, just might make those signals go away. “Fifteen minutes a day? I just don’t have the time!” I hear you cry. Are you sure? Most of us don’t think twice about spending fifteen, thirty or sixty minutes a day on Twitter or Facebook … Go on – focus your mind on your body for a change. Yoga uses the mind to release tension and deepens the breath to help the body’s systems function more efficiently. There are key postures that, when combined, work every area of the body and with regular practise, these postures can help maintain and improve physical health. Once you start to understand your body – its weaknesses and strengths – you can include further
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postures and tailor a practice to its needs. You could, for example, focus on those postures that strengthen the back or stretch the hamstrings. Or if you find it hard to ‘switch off’ at the end of the day, you could include a breathing exercise or meditation to lower stress levels and help you sleep. Fifteen minutes of yoga a day will make a difference, and if you can manage one or two longer sessions a week then even better. Think of it as regular, necessary mind and body maintenance. And every bit as important as Twitter. Jenny is available to teach ‘yoga-to-go’ workshops, consisting of an intro to yoga and its benefits, an in-depth look at key postures and a fifteen minute ‘home practice’ plan for students to take away. Email jenny@leedelisle.com for more details.
CONTACT Jenny Lee-Delisle jenny@leedelisle.com www.yogajenny.com
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GOOD HEALTH good business
Eating a healthy, balanced diet is an important part of maintaining good health, and can help you feel your best. It can be simple, too. Just follow these eight tips to get started.
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he two keys to a healthy diet are:
Get started 1
Base your meals on starchy foods
Eat the right number of calories for how active you are, so that you balance the energy you consume with the energy you use. If you eat or drink too much, you’ll put on weight. If you eat too little you’ll lose weight. The average man needs around 2,500 calories a day. The average woman needs 2,000 calories. Most adults are eating more calories than they need, and should eat fewer calories.
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Eat lots of fruit and veg
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Eat more fish
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Cut down on saturated fat and sugar
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Eat less salt.
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Get active and be a healthy weight
Eat a wide range of foods to ensure that you’re getting a balanced diet and that your body is receiving all the nutrients it needs.
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Don’t get thirsty
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Don’t skip breakfast
USEFUL LINKS www.nhs.uk/livewell/goodfood/pages/eight-tipshealthy-eating.aspx
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KEEPING on track How four freelancers keep their businesses on track
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very fortnight, three other freelancers and I meet in a coffee shop for two hours to work on our businesses. We are a virtual assistant, an accountant, a sales and marketing consultant and a photographer. We each bring a different skill set and perspective to the table. We discuss how our business has been going since we last met. This includes how much marketing or networking we’ve done, where enquiries are coming from, any issues with clients or other problems, any news or developments, ideas we’d like to bounce off each other, and any other issues we might want to raise. It all started nearly a year ago when I read an article on Freelance Folder called 5 Reasons Every Freelancer Needs an Accountability Group. I read that the point of an accountability group was to set each other goals, provide encouragement, push each
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ACCOUNTABILITY Actions toward or involving others that reflect the integrity of the person you want to be. other to grow and hold each other accountable for our businesses. I thought this was an excellent idea so I decided to try it out for myself. The group came together very quickly and, although meeting is enjoyable it’s not all fun and games. To make sure we get the most out of the group, we have set rules and an agenda:
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No mobile phones on the table and no calls to be taken during meetings unless otherwise agreed.
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Each person gets half an hour to speak about their business.
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We have to be open and honest about our concerns and current situation.
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No interrupting and bringing the discussion round to your business until it’s your turn.
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If at least two members of the group agree with a member on the solution to his or her problem, then the member should go away and action that solution.
The group has been extremely successful so far. We all benefit from being able to run ideas past each other and because we have to report back each fortnight, we can’t slack off and just cruise along.
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I f the group member has not taken the agreed action by the next meeting, they are held accountable.
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If a member persistently fails to take action as agreed or keeps missing meetings then they will be excluded and replaced.
Everything we discuss is confidential and is not shared outside the group.
I can highly recommend being a member of an accountability group. It provides creative ideas, an outlet to air concerns, advice and support and, most important, it keeps you focused on moving forward and making your business as good as it can be. Maybe you should start one of your own?
CONTACT Joanne Munro info@munro-pa.co.uk www.munro-pa.co.uk
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TIME
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wasters
Avoid wasting your own time
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ots of my business support clients are busy people. We’re all busy people. But sometimes being busy stops us getting things done. There are lots of resources out there for managing your time better, and I don’t want to just duplicate those but to encourage you to do something other than work on your business for a change.
what they do to relax, and they suggested, a good novel, Star Trek, folding towels, jumping up and down on a mini trampoline. I guess that sums up my friends, but why not have a go? Instead of seeing attendance at networking events in the evening as a necessary evil, why not see it as part of your social life? Get involved in running one of the events, or get active in politics or your kid’s school. Most business owners think that they don’t have time to do these things because they want to prioritise their business and don’t feel they have the energy for anything else, but my experience is that you get a lot back from being involved.
Rejuvenate yourself What I see a lot of business owners doing is working very long hours to keep up, becoming very tired and then going home and only having the energy to slump in front of the TV. Why not do something with your leisure time which will bring you pleasure and rejuvenate you?
The successful business owners I know are people who are very active in their communities. Anything which widens your social circle is good networking: you never know what will come from your involvement with your local Amnesty group, or book group. At the very least, you’ll get a fresh approach which you’ll be able to take back to your business.
Go out with friends; have some human contact and some interesting conversations. When you’ve done your work for the day, why not go home and read one of the many business books which can inspire you? You’ll get ideas and a new lease of life for your business.
Friends and family
When you’re tired
If you have a partner or family, then you’ll probably be focused on making money in your business to provide for them financially. Which is great – it gives you an enormous incentive to develop your business. But, what about the time you spend with them? What about that quality time where you actually go out and do interesting and exciting things with your kids? If you did more of that, is it possible that you might feel more motivated in your business and see the point of all that hard work?
If you are just too knackered to think properly, or you want to switch off for a while and watch TV, you’ll probably enjoy it more if you’re watching something you recorded because you’re interested in it, rather than being drawn into the latest EastEnders because it happens to be on TV at the time. Treat yourself to some proper relaxation, so you’ll bounce back in the morning. I asked some friends
See this as investment See all the wonderful things you do outside of work as an investment in yourself and your business, and your business will thank you for it.
IMAGE BY AMY MESSERE
Julia writes a regular blog for tips, gossip, and food for thought for small businesses.
CONTACT Julia Chanteray julia@thejoyofbusiness.co.uk www.thejoyofbusiness.co.uk
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LEAN founder Semi-autobiographical, in no particular order, being a #LeanFounder
To Do
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You don’t need that new laptop, a refurb will do, your current laptop is fine until it dies.
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Plain eggs on toast is cheaper than eggs Benedict, and better for your waist.
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Walk whenever you can.
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Travelling for a meeting? Make the rest of your time there count.
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Don’t travel at peak times. Don’t go to every event, meetup or conference. You will be paid the least, and probably last. Make breakfast at home, include lots of fruit. Swim, ride a bike, and do Yoga, Pilates or Tai chi. Sleeping on friends floors is cheaper than renting a flat, but not as good for your sanity.
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Take at least one day off a week. Stop drinking lager, it’s more expensive than Ale or Whisky, and it’ll only give you a hangover.
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You don’t really need that premium Spotify account.
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Keep on top of your accounts, keep them simple.
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Actually learn how to make Ramen.
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Ask for help.
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Answer others calls for help.
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Listen to everyone who offers advice, but make your own decisions.
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Stay hydrated.
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Don’t buy Photoshop, Pixelmator is like a modern Photoshop 4.
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Don’t buy Microsoft Office, you can get it for free from Bizspark.
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It’s not about you. But your startup is a reflection of you.
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Don’t ‘expense’ everything: when it comes from your pocket you might reconsider that taxi ride.
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You don’t need expensive business cards, order a small run of Moo cards. Iterate.
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Understand your term sheet, it’ll save you in the future.
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Understand your cap table. Know when to say ‘damn it, I do have time for this [important personal thing]’.
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Use your own product. Otherwise why bother in the first place?
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Have a note for everything. Organise and reduce these. Every thought was generated for a reason. Track this.
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Have a spread sheet for everything. They are guides. Know your numbers. Iterate these. Model scenarios.
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You do have the time, stop watching reality TV and soap operas. In fact, sell your TV.
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Make sure people remember you. Put a real photo of your actual face on your card.
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Design your own logo, you might surprise yourself.
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Don’t get held up by pixel perfect design.
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You can iterate your copy.
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Leave your admin till the evenings, spend the time you have with your team on product.
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Carry a toothbrush and a spare shirt.
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Use coffee shop loyalty cards.
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An employee will cost you 20% more than you planned.
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Failing is an option, but not an aspiration. Understand why you failed. Don’t do it again.
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You don’t need an Aeron. Yet.
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Cut your own hair. Or don’t cut it at all.
Use that free Google Adwords credit they send you. A/B test. Learn what converts. Test your branding and messaging.
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Pay your bills as they arrive. Letting them stack up isn’t good for anyone.
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You can buy your Apple Care anytime in the first year. Wait.
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Keep that FaceBook tab closed.
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Don’t be concerned with inbox zero, it’s replying that’s important.
Start reading financial blogs. Stop reading Reddit. Learn your stakeholders’ vocabulary. What do your stakeholders drink? You’ll know if you’ve spent time getting to know them.
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Do your VAT (tax) returns quarterly. Sublet office space or desks, better still join a co-working space instead.
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Have an occasional luxury. Github, Dropbox, Google Docs, and Skype are your friends.
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Keep your email short, your time, and theirs, is scarce.
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Get to the point. If that meeting opportunity happens, jump. Know your stuff. Read everything you’ve written, and read it again. Then write it again. Have answers. Be considered.
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Use your competitors’ products. This is free research. They are learning and experimenting for you.
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Blog or tweet about what you learn and you’ll learn even more.
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Spend time with other founders. Only they will understand what you’re going through.
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Keep your shoes clean. Be as transparent and upfront as possible, then you can have proper conversations rather than games of guesswork.
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Your lawyer and accountant have a lot of knowledge, but you can help them learn too.
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Hold on tight.
CONTACT Josh Russell http://bonfire.im hello@joshrussell.com http://bit.ly/leanfounder @joshr
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Yourbusiness.com
Sponsorship an effective yet overlooked, marketing tool
Have your adjusted your marketing strategy so that your business flourishes during the downturn?
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ponsorship can be seen as an expensive tool often associated with large brands and sporting events, but there are plenty of opportunities out there for SME’s wanting to be involved at local or regional level, just as there are sponsorship opportunities available covering a range of sectors and budgets. Sponsorship does not have to cost millions or even thousands of pounds. In fact, it can cost as little as hundreds of pounds to work, as long as it fits in with your marketing plan and objectives. The aim is to concentrate on your key objectives and the most rewarding sponsorship deal rather than the most expensive, to reach your target audience. If you
are considering sponsorship as a marketing strategy it is essential to carry out the right research before settling on a sponsorship package, to ensure the best return on your investment. Do your homework to achieve the best results.
Who are you targeting?
IMAGE BY flickr.com/photos/bjaglin/
Gone are the days when you could simply define your market by demographic factors or location, in today’s market you have to look at the way people think and how and why they make their buying decisions. How well do you know your market? Can you answer the following questions about your customers?
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How do they use your product/service?
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Which of your products/services are most popular? How do people perceive your company and its products/services?
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What are their purchasing habits and why would they choose to buy from you?
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Where do they live/work? What are their lifestyle factors and habits that affect their purchasing behaviour?
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If you are struggling to answer the above, then think about a customer survey which is easy to produce and doesn’t cost the earth. Get in touch and I can produce a simple and effective questionnaire for you.
sponsorship has ticked all the right boxes is essential to its success and long term viability.
Once you have defined your market, you can determine which sector to target through sponsorship Make a list of at least ten to fifteen sponsorship objectives. It may be that you want to change the perception of your company, or close some bigger deals which have been bubbling for some time, launch a new product or service or educate a market about your company. Look for a sponsorship opportunity which covers at least five of your objectives so that you remain on track but have the flexibility to change direction if need be.
Now the fun part! You have done the research and determined your objectives, so how do you find the right sponsor? Matching your objectives to the opportunity is obviously the key. I have been working with a new and innovative company www.sponsormonster.co.uk who can provide you with everything you need to find the best sponsorship opportunity. They offer a free online tool which lets you search a database full of local, regional and national deals to suit your marketing needs and budget. Sponsor Monster is not just a simple directory either – they will consult with you then take your marketing brief, whatever it may be, and hunt down from the entire marketplace of sponsorship opportunities a maximum of five live sponsorship opportunities that fill the bill.
RemembeR sponsorship is not just about having your logo on a banner Businesses small and large often make the mistake of thinking that they can pay to have their company endorsed on a few banners and leaflets and reap the benefits for months to come. This is not the case. Sponsorship is called an opportunity for a reason. You are given the space to take an active role in the sponsorship and integrate it with other existing marketing strategies. Make a list of all your marketing strategies and aim to find at least two ways to mix a sponsorship investment with them.
Find the right sponsorship deal
Sponsors are spoilt for choice as more and more businesses are looking for sponsorship including schools and charities, public and private sector events and publications. Always work at the level that’s right for you even if it’s with your local school or small charity. Sponsorship can be hard work, but the results are worth it – just make an effort to get involved and keep your objectives in mind. Originality and imaginativeness throughout the process can achieve bigger and better results than one off cash injections.
What about my return on investment? It would be a lie if I said that every pound you spend on sponsorship will make you two. It is difficult to quantify the effect of converting a customer into a strong advocate, or an occasional buyer into a loyal buyer, but the success of a campaign can be monitored through its objectives. Ensuring that the
CONTACT Simone Bennett simcbennett@gmail.com www.simonebennett.co.uk
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IMAGE BY flickr.com/photos/59937401@N07/
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IMAGE BY flickr.com/photos/shnapthat/
/ Issue #1 / 2012
spaces WORK The differences between office rental facilities, startup incubators, and co-working spaces
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he world of work is changing, when it comes to places that independents work in, with old models being re-purposed, new ideas coming on line, and mishmashes galore.
OFFICE RENTAL FACILITIES Primary reason for existence: Rent space at a profit
To help navigate this tumult, I am going to describe three basic categories into which any given space might likely fall. Some places fit pretty purely into one category, while some very deliberately attempt to cross all of the categories.
These are organisations whose business models are primarily based around taking one or more pieces of real estate, dividing them into smaller pieces, adding services, and letting the space out at a profit.
Generally speaking, every place has a primary reason for existing, and those can usually be pretty easy to spot. The following constitutes my best attempt at helping clarify the core differences between these things.
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The market is made up of businesses that for one reason or another require the privacy and services of an office without necessarily wanting to lease an office of their own. These can be one-man operations or large teams.
Issue #1 / 2012 / This industry is useful because it makes office space accessible to smaller businesses whose founders are not in a position to take on space of their own. This kind of facility has been around in my city, New York, in various forms for decades. They compete on location, price and services. Some are more full-service than others. The Sunshine Suites company, positions themselves as offering lots of basic business services for an extremely affordable price, while something like eEmerge caters to those interested in prime mid-town location and higher end services. These companies generally do not have a formal application process but may impose long-term obligations, sign up fees, criminal background checks, and charges for additional services. The relationship is one of landlord–tenant.
Startup Incubators Primary reason for existence: facilitate high-growth venture-backed startups These are places whose models are a little less straightforward, as their success is defined by the growth of the companies they house. They are often subsidised by an entity whose interest is in economic development, such as a government agency, or an investment firm hoping to discover promising young companies to add to their portfolio.
of the company, the amount of existing funding, the existence of a prototype, and the industry the company operates in.
Co-working Spaces Facilitate a healthy community of independents The newest entrants into the arena, these are organisations that offer membership in a community of like-minded people in a central gathering space. While some may treat membership as effectively the same thing as office rental, a co-working space does not compete as one. Uniquely, co-working spaces are often organised organically as a community first before a business entity is formed. They tend to be part of a global movement that generally subscribes to core values of community, openness, collaboration, sustainability, and accessibility. The market is focused on people who don’t need office space or incubator programmes but access to a place and community to plug into on their own terms. That could mean individuals or small teams whose work doesn’t require much more than a desk and an internet connection. This appeals to groups that the other two industries do not cater for, including freelancers, contractors, telecommuters and travellers.
The market is specifically people with ambitions to build high-growth companies who do not already have access to everything they need to build their businesses. In theory, at least, they are useful because they take talented new entrepreneurs and provide them with guidance, education and other resources and connections to propel them forward as growing businesses. Startup incubators compete to attract and develop talented and ambitious business founders. Since incubators are subsidised, they provide bargain rate services, sometimes free of charge. They always have an application process of some kind. You must fulfill some basic criteria which may include the number of principals, the age
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/ Issue #1 / 2012
Coworking spaces are open to all who play nicely. They almost always offer a drop-in option, so you need not even be a member to participate. Membership options generally range from single days to 24×7 access, with part-time options offered in between. Coworking spaces distinguish themselves by their communities. Every co-working community has a different culture, so finding the best personal fit is paramount.
Similarities and differences Each area has its merits and drawbacks; it’s important to understand your needs. You’re less likely to bump into a potential investor at an office rental facility than you are at an incubator, for example, but you’re far more likely to find a customer or a co-founder in a co-working community than anywhere else. New Work City, the space I help to run, is a coworking space. It is not an office rental facility, though membership does include basic office services. It is not a startup incubator, though we do house and nurture many successful startups. We don’t exist to maximise return on our real estate: we simply want to cover the costs we incur, and maintain a sustainable model. We empower individuals to get out of the community as much as they put in. Your application process is your own participation and nothing more. People who don’t fit in weed themselves out.
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Office rental facilities and startup incubators, service the needs of business people. These people have more-or-less existed forever. Coworking spaces service the needs of people who do something they care about, while their business entity, if any, may act more as a means to an end. They are communities of practice, where people go to work on their craft. It is that latter group of people I find the most interesting. In light of everything that is happening in the world right now, the notion of making a living doing something you believe in on your own terms is a liberating one. In it may lie answers to repairing our economy. By building services and doing things to help people start and maintain healthy independent careers, we have an opportunity to make a really long-lasting positive impact on the world.
USEFUL LINKS http://happymonster.co/2011/11/07/what-are-thedifferences-between-office-rental-facilities-startupincubators-and-coworking-spaces/?t=1320709679
CONTACT Tony Bacigalupo tony@nwc.co www.nwc.co
Issue #1 / 2012 /
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