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Sandra, left, and Chad Ballantyne, co-founders of The Creative Space (COURTESY OF CHAD BALLANTYNE)
Sandra, left, and Chad Ballantyne, co-founders of The Creative Space (COURTESY OF CHAD BALLANTYNE)

TRENDS

Entrepreneurs jump on co-working bandwagon Add to ...

In 2008, Chad and Sandra Ballantyne moved their marketing and Web design company, Rhubarb Media, into its first office – a 1,300-square-foot space in downtown Barrie, Ont., which they shared with another small company.

A year later, when the other company decided to move out, and Rhubarb was left with $2,100 in monthly rent to pay – and another year on the lease – the entrepreneurs called on the freelancers they worked with to fill the empty desks.

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Mr. Ballantyne then read about co-working, a growing international phenomenon of sharing office space, realized he was already doing that, and decided to turn the space into a second business.

In January, 2009, the Ballantynes launched The Creative Space, easily filling the three desks they had for rent and, within a year, took over the upper floor of the same building, doubling their space.

Today, after a couple of more expansions, the company is in a 6,200-square-foot building that it moved into last September in a lease-to-own arrangement. The space consists of a main floor with 23 desks — nine of which are rented full-time and 14 that get used by the hour or the day. Upstairs, the Ballantynes rent out four offices and have an open loft space that gets rented by the hour by groups.

So far, they’ve been filling up to about half capacity, and they’re hoping for more.

“We felt it was time to truly invest in co-working in Barrie. It’s a giant leap, but we feel there’s a great future in this,” Mr. Ballantyne says.

Co-working, or shared workspace, is a growing trend around the world. There are now more than 1,300 co-working spaces around the world, according to the latest Global Coworking survey by Deskmag, an online magazine about co-working, a figure that has been about doubling annually over the last few years. An estimated 45 of them are in Canada, a figure that continues to rise.

Deskmag’s estimates don’t take into account businesses that offer just private office space — and not-open concept “hot desks” — nor embrace the co-working philosophy. But these similar concepts are on the rise, too, and include larger companies like Regus regus.ca]/note> and Telsec Business Centres [telsec.net]/note>, which have multiple locations and affiliates around the world.

The growing number of entrepreneurs jumping on the co-working bandwagon are making a business of catering to the rising numbers of telecommuters and self-employed who are tired of working at home in their pyjamas or in coffee shops, and are drawn instead to shared office space. These spaces are ideal for small startups who need to look professional but can’t afford a “real” office. And companies trimming down can get rid of their pricey standalone offices and downsize into a shared space.

Right now, many entrepreneurs who run these spaces are still exploring how to really make their businesses profitable. But with such a sharply rising trend, they believe their efforts will eventually pay off. “Down the road we could have a revenue stream that will allow us to quit our day jobs,” Mr. Ballantyne says.

Shared spaces have high monthly fixed costs and buying equipment like desks, printers and teleconferencing systems can put opening even around a 2,200-square-foot space at around $45,000 – which is what co-working space The Hub Halifax Ltd. cost to launch. Meanwhile, Marnie Walker says she invested more than $800,000 making her 45 offices and three meeting rooms at 401 Bay Centre in Toronto elegant enough for business-district clients.

The goal, of course, is to be full month after month, which still eludes many businesses.

“A lot of people who launch these spaces think, ‘If you build it, they will come.’ It doesn’t work that way,” says Rachel Young, co-founder of co-working space Camaraderie Coworking Inc. in Toronto.

Ms. Young, an event planner, and her friend, Wayne Lee, a Web developer, networked in coffee shops and via social media for a year before opening Camaraderie in early 2010.

The duo was able to draw enough clients to take over another floor of their building, doubling their space to 2,500 square feet, with a capacity of 26, in a combination of open desks and private offices, last summer. Charges range from $200 to $375 a month, or a daily drop-in rate of $25. The business is now running at about 70 per cent full, Ms. Young says.

“We know that the financial payoff is in the distance,” Ms. Young says.

The Hub in Halifax was launched in 2009 by four entrepreneurs, two of whom are still involved.

Its space has vabout 30 desks. Charging $399 a month to members – about 50 of whom have signed up – or $25 a day for a desk, The Hub is running at an average of about half full, says co-founder Joanne Macrae, who adds that the business generated revenue of about $100,000 last year, a figure that has been rising 10 per cent to 15 per cent annually, she says.

“We saw our space as a prototype of the idea; we wanted to take the idea of co-working and see how it worked,” Ms. Macrae says.

The Hub's owners have discovered many startups would like some more private options, and so it is looking at how to accommodate them. Some are also requesting more technology be available to them.

Ms. Macrae and her partner, Tracy Boyer, are now looking at ways to “evolve” the business, including how to grow regionally, she says.

Ms. Walker, meanwhile, started 401 Bay Centre in late 2008. And while her space is large, at 16,000 square feet, compared to other entrepreneurial ventures, she’s thinking of expanding, too.

“To be able to give the kind of service we do, you need a critical mass,” Ms. Walker says. She has a staff member on site at all times who will put together PowerPoint presentations, hook clients up with accountants and get marketing materials printed.

She reports her company is “doing very well” and she’s always got her offices rented out and meeting rooms booked solid.

Many of these entrepreneurs also see themselves as part of the startup incubation trend. They are looking for more than financial rewards for helping small companies thrive and fostering a vibrant local business community.

“The motivation is to make life better,” Mr. Ballantyne says. "We see that happening by helping our neighbours, focusing on building relationships, doing excellent work together and seeing our lives as not something to live just for ourselves.”

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