By Dan Nielsen
The Record-Eagle, Traverse City, Mich.
Fixed costs can break the financial shell of a business idea before it is ready to hatch.
Plenty of would-be entrepreneurs have good ideas and viable business plans. But the cost of leasing an office or manufacturing facility remains out of reach.
Some creative types don’t need a full-time office but would like access to a professional setting to occasionally meet with clients or hammer out particular projects.
Other freelancers, weary of working alone, yearn for a place they can interact with others and acquire a little social caffeine to stimulate their creativity. Sharing a space also can help independent workers network, can help them gain exposure for their businesses.
Co-working facilities aim to address these needs by dividing a larger space into bite-size pieces that even a limited budget can digest.
Sometimes called incubators, these operations help ideas grow into full-fledged businesses. They typically provide desk space, meeting space, WiFi Internet and access to printers. Some provide teleconferencing infrastructure.
The co-working concept is alive and well in big cities across the nation. Grind in Chicago. WeWork, TheYard and AlleyNYC in New York City.
The concept has existed in Traverse City for some time. Co-Wharf formerly operated at 140 E. Front St. A co-working space called The Hub operated in Building 50 but recently closed. Grow Benzie operates an incubator kitchen in Benzonia that targets entrepreneurs interested in creating food products. Bayside Bakehouse is a shared commercial kitchen in Cass Business Park that helped launch several food businesses.
Two co-working office spaces in downtown Traverse City are humming along right now, in second-floor spaces across the street from each other. Nate Elkins has run SPACE at 120 E. Front St. for three years. Sam Porter recently set up a co-working office at 129 1/2 E. Front St.
“I just saw the need for so many independent workers in Traverse City,” Elkins said.
An urban planner/designer, Elkins started SPACE as a pet project. The second-floor facility is mostly one big open space. Elkins designed and built louvered dividers. He installed the floor himself from plywood as a cost-saving choice. The grain of the plywood floor became part of the SPACE brand — it is featured on business cards and brochures.
Elkins operates his design business from SPACE. He migrates his work materials around the various stations at SPACE as need dictates. He occupied a room at the rear of the facility but recently moved to a work space in the shared room. He enjoys the communal aspects of interacting with his clients.
“You feel like everyone is kind of working together,” Elkins said.
Many of his customers also like rubbing verbal elbows with other independent workers. Some SPACE clients break up the monotony of working at a desk by doing some work standing at a counter with a window view or sitting at a table. The average age of SPACE users is between 25 and 40. Most clients are graphic artists, photographers or tech workers. Four employees of website MacUpdate do their work in SPACE the year around.
Elkins has been considering for six months either expansion or moving SPACE to a larger location. Summer attracts out-of-towners who stop in to use a desk for a day or a weekend, Elkins said. The facility nears its capacity on Fridays and Mondays in summer as visitors squeeze in a day of work during vacation.
“I wish I had more space,” he said. “We’ve definitely outgrown it.”
SPACE offers several pricing options that range from $15 per-day to $225 or $325 per-month. A punch card system can reduce costs for occasional users.
Elkins said SPACE makes a profit, but is not a huge moneymaker. His agreement with Custer adds another aspect to SPACE. The office functions as the northern Michigan showroom for the Grand Rapids-based dealer for Steelcase furniture. A Custer sales and design representative is based in the office.
Porter’s shared space across the street attracted nine clients so far. Prices vary according to square footage, view and privacy and range from $100 to $500 per-month.
“I want people to come here and be inspired,” said Porter. “We see it as the center of Traverse City. We want people to interact. Interaction is the key.”
Porter provides each work space with a desk, chair, wall-mounted whiteboard, wireless Internet and access to printers, shared conference space, coffee and craft beer. But that might not be enough for some.
“A lot people need space,” Porter said.
To provide for those who need more than just a desk, Porter is working on a larger facility on Rennie School Road. When complete, it will include spaces large enough for an entrepreneur to build out a food truck or tiny house. It will include a performance stage and recording facilities.
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It also will include offices.