Costs of Coworking Vs. Commercial: We Have The Calculations

When it comes to finding the right space for your business, there are a bunch of different factors that you’re likely considering. What sort of feel do you want the office to have, and what sort of amenities? Will you possibly be upsizing or downsizing in the next year or few? What sort of community would you like to have as neighbours?

There are a huge array of social and logistical benefits that are offered by coworking spaces over traditional commercial office spaces, and whilst all of these contribute to a thriving workspace and workforce, the underlying factor for what sort of space you ultimately choose will likely be what can fit into the budget.

We speak to people every day who are going through this decision making process. One of the fundamental questions faced by all small businesses owners thinking about moving into a coworking space is, “How much will this cost me, compared to renting an office of my own?”

It’s a tricky question, with lots of time and information needed to answer it.

The good thing is, we’ve done the work for you.

Have a look below at the detailed comparative estimated costs of running a small business of 10 people here in Melbourne, Australia, from both a renting and coworking standpoint.

Rent: $60,000 per annum

We based these figures primarily on word of mouth, as well as time spent looking at real estate website realcommercial.com.au.

Searches where limited to spaces of over 130 square meters and based in St. Kilda, with an additional radius of 1 km.

Receptionist: $55,000 per annum

Based on information about the average salary of a receptionist in inner Melbourne, provided by indeed.

Utilities: $3,850 per annum

Electricity
Based on the average amount of electricity used at 10kWh per day, and with an online quote from Momentum energy of $120 per month.

Average deduced through: SME businesses in Victoria (considered 20-199 people) use an average of 20,000kWh per year (or, 55kWh per day); based on a report on ‘Small Business Retail Energy Bills in Australia‘ by Energy Consumer Australia (see page 32 ‘Victorian Electricity Bills April 2018’).
We then worked back from this average to estimate a team of 10 would use 10kWh per day.
$1440 per annum

Internet

Based on an online quote from Telstra for unlimited monthly internet for a small business.
=$1200 per annum

Water
(Alright, buckle in. We’re going for a ride.)

Costs are based on those charged by South East Water for small businesses.

These are:
Water service charge: $116.64
Sewerage charge: $439.88
General drainage charge: $136 (charged by Melbourne Water)
Amount per kilo litre of water: $3.12
Amount per kilo litre of sewerage $1.81

The base rate for water service, sewerage, and general drainage charges is:
116.64 + 439.88 + 136 = $692.52 (or, 57.71 per month)

The accruing water costs are worked out as follows:
A person uses approximately 50L per day at work, based on this report.
Cost per day for water:

Number of litres used per day X number of people in office X cost per litre
= 50 X 10 X .00312
= $1.56 per day in water costs

Cost per day for sewerage:
Number of litres used per day X number of people in office X cost per litre of sewerage
=50 X 10 X .00181 per liter
= $.905 per day in sewerage costs

We work approximately 22 days a month.
Total accruing water costs per month for 10 people:
= (cost of water per day + cost of sewerage per day) X 22
= (1.56+.905) X 22
= 2.465 X 22
= $54.23 in total accrued costs for water and sewerage per month

In summation, the average monthly cost for a small business is:
⇒ total accrued costs + base rate for water service  
= 54.23 + 57.71
= $111.94 in monthly costs
= $1343.28 per annum for water

Staff Amenities: About $2,400 per year

Based on estimates found online of $14,400 for an office of 60 people; 14,400/6= 24,00, as approximate for 10 people

Cleaning: $7280 per year

Cleaning: costs about $35 per hour, based on prices for Melbourne found online.
At two cleaning sessions a week, for 2 hours each:
= $140 per week
= $7280 per year

Initial Fit Out: $90,236 ex. GST

We based this price on an online quote by Apexei, based on an office fit out of approximately 130,000 square metres, including:

  • Small reception
  • 1 large office
  • 1 boardroom
  • 1 meeting room (up to 10 people)
  • Medium kitchen space
  • Medium storage
  • Mid-range fit out

Keep in mind that these values may change, based on individual company’s discretion. The prices we’ve quoted are estimates based on our own research, and right at the time of publication. We encourage you do your own research based on your own needs, and hope that by sharing our own working and estimates we help you to develop an understanding on the costs involved with coworking and renting an office space. 

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