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Coworking spaces are still on the rise, regardless of WeWork mistakes

(BUSINESS NEWS) Coworking spaces are taking the world by storm, WeWork may still be good for some but not all. But the smaller companies have what you need too.

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Last week, we shared a story on the sudden decline of coworking “giant” WeWork. In case you haven’t had a chance to read it yet (I highly recommend it as it sheds some serious light on the topic) the TLDR gist of the story is that the company has very quickly declined from a $47 billion company to an $8 billion one. That said, their drop in value has resulted in a need to offload assets, such as a variety of coworking companies it recently purchased – some as recent as this year.

Despite the company’s obvious failures, according to a recent coworking survey by Clutch, WeWork is still pretty popular. When surveyed against 5 other possible choices, the company took the top spot, with 39% of respondents said they work from a WeWork location.

But watch out WeWork! In the same poll, 36% of people (only 3% less than WeWork) are opting for local spaces for their coworking needs. So what does this mean for the coworking landscape in 2020? Clutch found some really interesting data that may give us some clues into what the future of coworking may look like.

Our first trend is that coworking spaces are seemingly favored by business who prefer to be involved in their local community and offer community-based perks. This is something that niche spaces, like Enterprise Coworking, owned by Focus Property Group in Denver, Colorado, are capitalizing on.

Andrew Schuh, a marketing specialist at Focus Property Group, says that local Denver businesses tend to be drawn to their coworking space and that “being local and involved in local events and forming partnerships with local businesses has really helped us. We have a local touch that WeWork doesn’t have.”

But are other local businesses and employees around the globe following suit? We’ve found that whether or not you’re with a company or single employee, the decision to go with a larger space, vs. a smaller, local space, really comes down to a couple things: the size and type of company you work for and your company’s policy on remote working.

For example, if you are a freelancer and you do not have a dedicated space to work in, assuming you have the amount of work that warrants a coworking membership, logic would say that you may want to go with a larger space like WeWork – one with more amenities (which we’ll discuss later in the story). However, being a freelancer also means that you’re probably the one paying for the space, so both actual need and budget can be very real concerns. These concerns may force you in the direction of a local company, vs. a large company like WeWork.

On the other hand, if you are part of an organization that pays for, or subsidizes your remote workspace (lucky you!), you may very well have the means to go with a larger space like WeWork.

Another trend that certainly plays a role in the 2020 landscape is in relation to company policy. It’s important to mention that many, but not all, larger companies have restrictions when it comes to remote working. Some businesses may completely disallow remote working, while others may only offer the ability to work out of the office a few days a week.

Clutch goes on to point out that if a company has more than 100 employees, it’s more likely that their employees visit their coworking space the majority of the week. They found that 53% of employees from larger companies spend 5 or more days per week at their remote office of choice.

In the same vein, Clutch found that if a company has less than 10 employees, only 29% of employees spend the majority of their time at their coworking office. This likely correlates somewhat with what we mentioned before: smaller companies are less likely to prioritize private office expenses, typically based on budget, need, and policy. It can certainly also have something to do with the job you’re in and whether or not the position supports remote work.

Schuh says “The majority of members use the space most days, but there are the smaller businesses that come in fewer days per week…our larger members are definitely here full-time, though.”

Now, another trend that may have an impact on the future of coworking is in relation to plans and contracts. Larger companies tend to stick with coworking spaces for at least a year. We speculate the reasons are both growth-related and budget-related. In a small company, month-to-month is often a great option as it offers flexibility. However, medium and larger companies frequently go with annual plans, which may be subsidized and offer a stable work environment for their employees.

For instance, TrustPilot, a well known review-gathering service and platform, is Enterprise Coworking’s largest member, with 72 out of 800 employees working at the Denver space. All Denver-area employees exclusively work out of Enterprise as it offers them both stability and flexibility. The company has a suite-plan (vs. a desk membership), meaning they can work anywhere they’d like in the office. They also recently signed a 5-year contract with the space, saying that they have no plans to move, even as they grow.

Contracts such as these support small to mid-sized businesses who are on the right track, growth-wise, and are looking to increase their footprint long-term.

The final trend we’ll discuss today is all about amenities. Coworking spaces aren’t just for working. They’re for playing, too!

Many coworking offices come with a wide array of services and perks. Clutch found that 39% of coworking spaces have recreation rooms, for example (Enterprise being included in that statistic). Game rooms like these can have a direct impact on job satisfaction and productivity, which can prevent burnout. Enterprise’s recreational room, for instance, provides pingpong tables, shuffleboard, and Xbox access and helps to reduce daily work-related stresses for many employees. Actually, according to Clutch, about 60% of coworking employees are more relaxed at home since they started working at a coworking office.

Office Assistant, Holly Emmons, attests to this by saying “Our team loves pingpong…people take breaks from their busy days to destress for a few minutes and get away from their desks, so it is great having these types of spaces throughout the building.”

Another amenity that’s taking the industry by storm is wellness programs, and it’s no wonder why. After all, having healthier customers means more activity in the coworking space (more frequent visits, consistent payments, less cancellations, etc.), which means more revenue for the coworking space.

So, what does all this mean for coworking in 2020? With larger companies committing themselves to specific services, we predict that the coworking model will continue to be near and dear to both businesses and employees in the future. In this competitive market, it’s highly likely that many spaces will also continue bring in new tactics and amenities to rival giants and small businesses-alike.

So, without further adieu, let the coworking space wars begin!

Rachael Olan is a Texas-based Staff Writer at The American Genius and jack-of-many-trades. She's well known for her abilities in Marketing, Sales, and Customer Service, with a focus on SaaS and eCommerce businesses. Outside of writing, Rachael spends much of her time with her swarm of pets, including a 70 lb tortoise named Frankie.

Business News

AdvoCare MLM was painted as a pyramid scheme! Well color me surprised

(BUSINESS NEWS) AdvoCare is the most recent case of an MLM being called out as a pyramid scheme by FTC, but there’s plenty more MLMs where that came from…

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AdvoCare business structure

It’s always a good day when an MLM (multi-level marketing business) actually suffers legal repercussions. Granted, these days don’t happen nearly as often as we’d like – MLM CEOs have historically had deep pockets and a far reach – which means it’s all the more reason to celebrate when one gets called out.

Today’s culprit is AdvoCare, a Texas-based “wellness” company. AdvoCare has been fined $150 million by the FTC (Federal Trade Commission) for operating a pyramid scheme. The company, as well as a few of its top influencers, have been misleading people when it comes to how much money they could earn. This is pretty typical behavior for MLMs in general, though many are careful to couch your potential earnings in vague terms.

For the record, the majority of users lost money, and most who managed to turn a profit made a maximum of just $250. I say ‘just’ because it’s hard to know how long someone would have had to work to not only break even, but manage to turn a profit. MLMs make big claims about earning money, but when you have to pour a hefty sum of cash into the products, it can take a while just to break even.

That’s why many MLMs, including AdvoCare, push contributors to recruit, rather than sell the product. And if you’re thinking that sounds like a pyramid scheme, you’re totally right. This method of putting recruiting first is part of the reason AdvoCare has gotten in trouble with the FTC.

In response, AdvoCare is moving away from multi-level marketing sales and pivoting to selling products directly to retail stores, which in turn sell to customers.

Now, with AdvoCare’s downfall, don’t be surprised if other MLMs insist that they’re different because they haven’t gotten in trouble with the FTC. In fact, plenty of MLMs are quick to tell you that they’re totally legal and totally not a pyramid scheme. Sure, Jan.

First of all, if there’s a big focus on recruiting, that’s obviously a big red flag. There are plenty of pyramid scheme MLMs out there that just haven’t gotten caught yet. But there are other sneaky ways an MLM will try to rip you off. For instance, some companies will insist you buy tons of product to keep your place, and that product can be very hard to unload. Not to mention, many of the products MLMs tout are subpar at best.

AdvoCare getting called out by the FTC is a great start, but MLMs seem kind of like hydras. Cut down one and two more seem to spring up in its place. So be vigilant, y’all. Just because an MLM hasn’t gotten caught yet doesn’t guarantee it won’t still scam you out of your hard earned cash.

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Business News

Bose is closing their retail stores, but we haven’t heard the last of them

(BUSINESS NEWS) Over the last 30 years Bose has become so well understood by consumers that they don’t even need retail stores anymore. We hear them just fine.

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Over the next few months, Bose plans to close all of their retail stores in North America, Europe, Japan, and Australia. The company made the announcement last week. With 119 stores closing, presumably hundreds of Bose employees will be laid off, but the company has not revealed exact numbers.

However, this shouldn’t be taken as a sign that the maker of audio equipment is struggling to stay afloat. Rather, the move marks a major change in how consumers purchase tech gear.

When the Framingham, Massachusetts-based company opened its first U.S. retail store in 1993, it was making home entertainment systems for watching DVDs and listening to CDs. According to Colette Burke, Bose’s vice president of global sales, these first brick-and-mortar locations “gave people a way to experience, test, and talk to us” about Bose products. “At the time, it was a radical idea,” she says, “but we focused on what our customers needed and where they needed it – and we’re doing the same thing now.”

When a lot of this equipment was new, consumers may have had more questions and a need to see the products in action before purchasing. Nowadays, we all know what noise-canceling headphones are; we all know what a Bluetooth speaker is. We’re happy to read about the details online before adding products to our virtual shopping cart. The ability for Bose to close its retail stores is probably also an indicator that Bose has earned strong brand recognition and a reputation as a reliable maker of audio equipment.

In other words, consumers are less and less inclined to need to check out equipment in person before they buy it. For those who do, Bose products can still be purchased at stores like Best Buy, Target, and Apple. But overall, Bose can’t ignore the fact that their products “are increasingly purchased through e-commerce,” such as on Amazon or directly from their website.

In a statement, Bose also said that it has become a “larger multi-national company, with a localized mix of channels tailored for the country or region.” While Bose is shutting down its retail stores in several continents, it will continue to operate stores in China, the United Arab Emirates, India, Southeast Asia, and South Korea.

Burke said the decision to close so many retail stores was “difficult” because it “impacts some of our amazing store teams who make us proud every day.” Bose is offering “outplacement assistance and severance to employees that are being laid off.”

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Business News

Finally the American workforce is now mostly women!

(BUSINESS NEWS) Women officially make up more than half the workforce, but that doesn’t mean total equality. So what does this tipping of the scale mean?

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Equality for women has finally been achieved: according to the Bureau of Labor Statistics, women now make up more than half of the workforce! That’s it, that’s the article.

Kidding. Just because women are currently in the majority doesn’t mean all their problems are solved.

First, it’s worth noting that although women currently make up more than half of employees on payroll, that number is slight (50.04% to be exact). Not to mention, women are very likely to fall back in the minority once construction – a male dominated profession – picks back up in the spring.

Still, the number of women in the workforce has been growing over the last decade. While jobs in manufacturing – another male dominated field – are dwindling, jobs in education and healthcare are growing. When it comes to K-12 teaching, for example, women are more likely to fill teaching roles. Women also dominate in nursing.

Not to mention, women are earning more degrees than men!

That said, despite this progress, women as a whole are still getting paid less than men. Part of the reason lies in the types of careers that women end up in. Those female-dominated fields we mentioned earlier? They don’t typically pay well. Plus, there’s that pesky glass ceiling that still exists in some fields. Remember, there are more CEOs named John than female CEOs.

It’s also worth noting that the information collected by the Bureau of Labor Statistics only covered people on a payroll. That means the growing number of freelancers aren’t being accounted for in the report. Freelancing has become a great way for individuals, often women, to stay home and care for their family while also earning money. It would be interesting to know how freelancers shift the balance, both in employment and income.

Finally, there’s the invisible labor that women often contribute to society. According to the UN, women account for 75% of all unpaid labor – which includes things like childcare, meal prep and cleaning. This is vital labor that is not accounted for by studies like that of the Bureau of Labor Statistics and sheds light into another reason why women might still have lower pay than men, on average.

So, yes, the fact that women make up over half the workforce is something to be celebrated! That said, we’ve still got work to do on the equality front.

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