What to do before opening a coworking space: Think 4 Times!
Edit after 8 months:
I must admit our title was wrong. It should have read “Think 1000 times before you open (your coworking space)”
Our original opening:
Since freelancing and the ‘gig economy’ is on the rise, so is the demand for coworking spaces. Is your city in need of a coworking hub? If you’re thinking about opening a coworking space, there are many things to think about. Running a coworking space isn’t like any ordinary business. It takes time, patience, and people to be successful. Before signing a lease and writing your business plan, ask yourself these four important questions about what your coworking dream looks like.
How we would say it now:
Since freelancing and the ‘gig economy’ is on the rise, so is the demand for coworking spaces. Is your city in need of a coworking hub? If you’re thinking about opening a coworking space, there are many things to think about. Running a coworking space isn’t like any ordinary business. It takes time, patience, and people to be successful. — AND MONEY!
While it’s a very respectful and ambitious aim to open a coworking space, be aware that 50% of the global coworking spaces are struggling to attract members, and 50% are just not profitable
You may interpret this in 2 possible ways:
- It’s really a bad business (that I should stay away from)
- It’s an amazing business with awesome opportunities
We believe in the latter, #2, so here’s a few tips on how to make it right!
Opening a coworking space takes a village! Do you have a community?
What makes coworking preferable to working home or in a café is the sense of community that coworking offers. Being able to collaborate, network, and simply have someone to talk to while accomplishing daily goals is all part of the value that coworking provides.
But just because you have a physical space doesn’t mean your coworking community will necessarily form. Building a human base before ever signing a lease on a space is crucial. Some great ways to drum up support before opening a coworking space is to host meetups and attend business networking events in your town. You may be surprised by how many people are looking for what you want to offer!
Once you have a community and a space already running, you’ve got to maintain the culture and energy. How are you going to keep members engaged in the community, and how will newcomers integrate? Hosting regular lunches, educational opportunities, and networking events are just a few ways to keep the camaraderie alive.
Let’s get physical. What will your space look like?
Once you have a group of potential members, you can then focus on the physical space.
The first priority for your space is location, location, location! As is the number one rule in real estate, so is the same for coworking. Finding the best spot in your city is a make-or-break decision that determines your success. Is it accessible by walking or public transport? Is it central to other local businesses? Do members need parking? A space that is several miles out of town may not succeed if members can’t easily access the location.
The second priority when opening a coworking space is utilities. No space can survive without fast internet speeds, printing services, and meeting rooms. Before you start dreaming of those Herman Miller office chairs, make sure you have enough in your budget for the essentials.
The third priority is the environment. Furniture, lighting, and decorations play an important role in creating a setting that will help members feel productive, creative, and comfortable. Take the time to research what kind of vibe is best for your members.
In any case, admit it: “coworking” is sometimes a buzz word. Be very open about what you are offering to the coworkers: private offices, office spaces, event spaces, coworking events, dedicated desks, coworking communities, ways for start-ups to reduce ongoing expenses, fully serviced offices to business owners? Be very specific and deliberate about what you want to be, and what you want to be offering!
Let’s get down to business. What will your space offer?
Now is time to think about the business model. How are you going to charge members for using your space? There are several options for membership types that can work for your business.
Most spaces offer single-member passes by the day, week, or month, often including a free trial period of between one to five days. Although offering freebies may feel like a loss of revenue, it gives potential long-term members the chance to see if your space is right for them.
Other models involve charging members monthly for their estimated time of use. One package can include 25 hours for a month, where another can be for unlimited use every 30 days. Though not the most popular, some successful coworking spaces around the world have found that this model works.
It’s also important to think about whether you will offer ‘flex’ desks, ‘fixed’ desks, or both. By offering ‘flex’ desks, members are free to use workspace as they please. ‘Fixed’ desks are a good option for members who are dedicated to using your space each day and need to keep personal belongings in the office overnight. By offering both models, members can customize their experience, and you have more options for making money.
Plan for the end game. What’s your goal?
Although coworking is sweeping the world by storm, it’s still a relatively new idea the general public. For this reason, most spaces do not turn a large profit and operate to just cover costs.
Before getting started, it’s important to decide whether you want to focus your business on making money or on being an inspirational, entrepreneurial hub for your community. Though you might think that profits are the only reason to start a business, coworking spaces that don’t necessarily focus on producing capital can offer foundations to help the local economy.
In either case, be financially prepared to cover operational costs while slowly gaining stability. If you don’t have a ton of money in the bank, look into applying for grants offered to startups and small businesses. There are plenty of options for funding your coworking dream!
No matter what kind of coworking space you choose to build, keep in mind that it’s not like running any ordinary business. Creating a community of entrepreneurs, freelancers, and remote workers is no easy task, but it’s incredibly rewarding.
Still Thinking About Opening A Coworking Space?
If these 4 questions only made you more excited about opening a coworking space, we’ve got something you will enjoy: the one and only Coworking Game! This game will take you through lots of decisions that every coworking space owner needs to face. Do you have what it takes run a successful coworking space?
Have you started a coworking space? What are some words of advice you have for those who are thinking about it? Let us know in the comments!
This article was contributed by Stefanie Veneziano.