In just the past few years, coworking spaces have become a staple of the sharing economy, with memberships growing by over 40 percent a year. The variety of coworking spaces is also growing, to meet the ever-changing needs of entrepreneurs. Now, there is a wide range of niche concepts, including women-only, wellness-oriented, LGBTQ, and construction-focused spaces, to name a few.
If you’re a property owner, it’s understandable that you might want to capitalize on the significant demand for coworking spaces. However, with any business, there is a litany of factors to consider before actually taking the first step. Of course, a real coworking business plan would be more than a couple of pages, but here is a general overview of how to start a coworking space.
Research Consumer Needs
Taking the “if you build it, they will come” approach will likely lead to disastrous results for a coworking space. Given the calculated moves of coworking giants like WeWork, Knotel, and Regus have made over the years, it’s become apparent that successful spaces are built around strong communities of professionals and take a massive amount of research to cultivate.
Do a bit of market research and see what other coworking spaces are offering in the area. The type of amenities they offer and don’t offer can be an excellent way to see what is popular or missing in the market. You might consider hosting an event or two before opening to see what the professional community is looking for and what benefits they might need. Many coworking spaces are distinguishing themselves by offering child-friendly spaces, sit-to-stand desks, or even yoga and wellness classes. Find out what matters to your potential clients and try to cater to their needs.
Some simple amenities you can offer are:
- Printing and phone services
- A kitchen or general eating area
- Conference and meeting rooms
- Wireless and wired internet
- Snacks or even catered meals provided by your operating partners
- Networking events to bring businesses together
- Wellness and fitness classes (depending on your space and budget)
- Innovative security measures for easy access to the space
- Software integrations to make coworking easier
- Extended work hours or 24-hour access (if you have the resources)
Some luxury coworking spaces have taken their amenities to the extreme to cater to a specific audience. But the above suggestions are, at this point, industry standards that are widely expected from clients. They will provide the basis of your space while you are still discovering your prime demographic and their particular concerns.
Make a Budget
Luckily, the startup costs for starting a new coworking space are fairly straightforward. Depending on the size of your space, these costs can get expensive. But if you are starting small and don’t have millions of dollars in funding at your disposal, the following list contains the bare essentials, that your space can’t go without. Note: The biggest chunk of your budget each month will go towards leasing (or buying) the actual property. If you already own one, that’s a major hurdle you can check off the list.
Essential costs include:
- Equipment (maintenance and cleaning supplies)
- Kitchen amenities and supplies (i.e. coffee maker, fridge, pantry, dishes and silverware, etc…)
- Property insurance
- Unlimited WiFi
- Security system
- Receptionist (or some kind of on-site community manager)
One way to keep the costs down is to start with a smaller location, perhaps under 2,000 square feet. This can keep your costs manageable, while still helping to attract clientele through a good location, new equipment, and other amenities.
Find a Convenient Location
The location you choose can make or break the success of your coworking space. Focus on finding a space that is conveniently located near public transportation, in a safe neighborhood, and is easy to find. Many coworking spaces have found their homes in older or underutilized buildings like warehouses and factories. If the space has been empty or underused for a long period of time, you might even be able to work out a deal with the landlord or property manager, helping to reduce your overall costs.
Have the proper equipment
While having a pretty space with trendy-looking furniture might be important to you, what is more important are the utilities you can offer your members. Rather than spending an inordinate amount of time finding the best lounge furniture for the space, you should focus more energy on finding the best high-speed internet possible. Talk with your local utility companies to see what the best plan for a community internet plan should be. If your internet connection is weak or slow, members will quickly become frustrated and leave your space.
Secure the space
Entrepreneurs want to work in a place where they don’t have to worry about safety constantly, and you don’t want to have to worry about your equipment going missing. To cut down on costs, you might want to consider using an access control system. It helps keep the space secure and allows members to come and go as they wish, especially if you are planning on having a 24/7 coworking space. You don’t have to have a receptionist or security guard on duty. There are even some access control options that allow members to enter via a smartphone, so there is never a need to keep track of keycards.
Partner with local businesses
Consider working with other businesses to help market yourself. You can work with a local child-care business to provide services or a local coffee shop that will provide the coffee for the space. You can also reach out to your state and local chambers of commerce to see what sort of assistance or resources they can give you. They can help you make invaluable contacts that can help your startup business get up off the ground.
The popularity of coworking spaces is growing each year, so now is a great time to jump into the market and start a coworking space. The possibilities are endless!
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