Step by Step Guide to Opening A Coworking Space: Everything You’ll Need
Coworking is ushering a new era of flexible operations for businesses and individuals alike. At just a fraction of the cost for traditional leasing or rent, coworking is an alternative that is winning everyone’s trust. From multinational corporations to freelancers, from startups to eCommerce websites, there is no one who hasn’t already acknowledged the growth of coworking by becoming a part of it in some way.
However, it’s not just those looking for office spaces and workspaces that are reaping the benefits of coworking. Owners of places that can serve as shared offices are also realizing the potential that this market has. Not only does coworking provide an easy revenue stream, but it also opens a window of opportunity for the initiation and implementation of creating ideas as well as productive learning experiences.
If you have a space that can serve as a coworking office and you are tempted to be a part of this market, then this article provides a comprehensive guide to opening a coworking space and all the prerequisites you’ll need to begin your journey down this path:
The Prospects of Coworking
Coworking as a concept began in 2005. In the first few years, it wasn’t regarded as much. After world economies especially the one in the US witnessed a recession in 2008, spending became scarce. As part of the revival, there were a number of changes in the way businesses operated. This is where coworking began to establish itself.
The growth of coworking has been slow but promising. According to real estate firm CBRE, coworking spaces in 2018 made up 7.6% of the total office space in use within the US. By September 2019, this percentage was 8.6%. At this rate, future predictions look sound. Coworking is expected to show a steady rise based on factors like rising in entrepreneurship ventures as well as a number of freelancers across the globe.
Although coworking has grown significantly over the years, accurate market worth figures are still hard to come by. Some sources indicate that the market is worth almost $10 billion at the moment, and is growing steadily. Flexible workspaces are coming in demand for a variety of reasons. Not only are they cheaper than traditional rentals, but they also offer a better opportunity of expanding through networking.
Both supply and demand for coworking related products are showing an upward trajectory. The listing of coworking spaces has grown by almost 200% in the last five years. Cities like Chicago, London, and New York are the biggest hubs for coworking with an annual growth rate of 20%. The concept of shared working space has become highly appreciated for both consumers and suppliers.
Why You Would Want to Invest in a Coworking Space
The rise in the popularity of flexible working spaces has been unprecedented. Moreover, industry trends show it’s not a fad. The growth has been steady and now future predictions show a similar pattern. This is one of the biggest deciding factors when it comes to making investments, especially ones that will last over a long period.
Flexible working is becoming the biggest trend these days and coworking provides an opportunity to do exactly that. The prospective target audiences include not only startups or freelancers but established organizations including international ones. These businesses and individuals make use of shared workspaces to carry out daily tasks or conduct meetings and training sessions etc.
These are just two of the many factors that are driving growth in demand for coworking spaces. Naturally, this makes the industry a lucrative window for anyone who wants to become a supplier. A coworking space is relatively more profitable than a conventionally rented one because the same square footage can accommodate a number of different businesses or people.
Although the profits and consistent growth are key in attracting investments towards coworking, there are other motivating factors too. Chief among these is the networking avenues that open with a shared working space. Various individuals from diverse backgrounds under one roof with nothing to separate them or hinder their interactions with one another. This gives rise to some innovative ideas for even suppliers to expand their offerings.
Things to Know Before You Start
If you have a space that can serve as a coworking office, this is your time to take an initiative. Even if you are thinking of buying a space, opening a coworking space, or converting an existing one to a shared workplace, there are a few things you’ll need. First and foremost are a few things that should be considered beforehand. These include elements like essentials of a coworking space and what the design and other aspects should look like.
Here are a few things you should know:
Do your research
Just because they are successful around the world doesn’t mean that a coworking space will work anywhere. Before you decide to jump on the bandwagon, make sure that you dive into the nitty-gritty of it. Look for shared workspaces in the vicinity where you want to launch, discover if there is actually a need for it. Also, gauge the level of awareness in the people you want to target about coworking spaces. Since it is a new field, many people are still unaware of what the concept really implies.
Identify the focal points
Opening a coworking space is like initiating any business but there are a few important things to consider. The idea of shared working spaces is still flourishing so the development is in the early stages. This is why investors and owners have to take a few things into consideration. The important aspects to focus on including the community and not space. Place emphasis on the function of the space, i.e. whether you want to run a profit or inspiration center, etc. Your subsequent business plan will depend on this.
Enlist professional help and consultation
It is important to get insights from those who have gotten it right. In the age of the internet, it is not hard to get a hold of someone who owns or works for a team that operates a coworking space. This is crucial because they’ll be able to tell you how things can be done right. You can either talk to a local expert or a friend you have somewhere else. You’ll have to tweak their advice according to the specific conditions that pertain to your area.
Essentials of a Coworking Space
Once you’re past the planning phase, there is the actual implementation stage. A coworking space is not like any other office. There are a few things that make it stand out. These include a focus on facilities and community building. In achieving this, there are some elements that should be considered. Here is a list of suggestions for your consideration:
- The design: One of the most interesting things about coworking spaces is that eye-catching décor. This doesn’t necessarily mean that you get an experienced interior designer to do your place. There is a multitude of ideas you can get from scrolling the internet and finding what other places are doing and how it’s working for them. Many shared workspaces have minimalistic interiors with simple wooden desks, chairs, ample lighting and a hint of nature through potted plants, etc.,
- The furniture: The reason why people are attracted to a coworking space is that here it feels more like home and not like an office. This is achieved through the use of several things and furniture is one of them. For a coworking space, you have to steer away from traditional desks and chairs although you can’t eliminate them from the workplace completely. This is where you have to show your creativity and mix things like bean bags, floor seating arrangements and single or multiple seating desks etc. Already established workspaces can provide hints here too and after that, it’s up to you,
- The equipment and facilities: The things which a coworking space offers can differ significantly but there are several constants. Shared workspaces even offer laptops and other devices to users who need them, but of course, there are extra charges for that. The things without which coworking space is of no proper use include a stable Wi-Fi connection that is accessible throughout the place, convenient power supply sockets for charging devices, refreshments like water and coffee, a sound collection of music and literature, etc. You can choose to add or subtract things based on budget as well as the demand in our particular area.
This is by no means an ultimate list for everything you’ll need in a coworking space. During the initial research phase, you’ll be able to figure out all the essentials that’ll make your venture a success. To make it easier, put yourself in the shoes of your potential customers and then analyze the things you’ll need. You’ll have a pretty decent answer.
Creating an aesthetically and functionally pleasing space is only the start. The real work begins after that and this is where the pre-opening research that you conducted really begins to shine. Much like any other product or service that is introduced in the market, a majority of the consumers won’t come looking for you. It is the job of the business to get them motivated for the cause.
For a coworking space, attracting people is a challenge for a number of reasons. For starters, different people will have various assumptions, goals, and inspirations. It is crucial to determine these and then act on targeting them through niche marketing. Then there is the issue of aligning the core function of your space with that of the people who’ll use it.
In the previous paragraphs, we discussed two forms of coworking spaces, i.e. for profit or for inspiration. In the case of the former, you’ll be charging more and this might not be acceptable to some businesses or individuals who have constraints. Attracting the customers, in this case, will take an innovative approach that showcases how to very different objectives can align for mutual benefit.
For someone making an investment, and we mean any type, the main incentive is knowing the payback schedule. This is where pricing becomes crucial. This is also the reason why the price has to be given extensive consideration before it can be announced.
The price you charge will vary depending on the type of space you have, the facilities being offered including networking capability, what competitors in the area are charging and finally the features that set you apart from the rest. Average prices differ around the world and only proper research will help you get a good idea about it.
Listing your space
Listing the space is vital for a number of aspects. However, before anything else, it is important to note that you can list your space on multiple platforms but you have to be wary of a conflict of interest. The listing website serves as the first marketing avenue for your business.
The credibility and reach of the platform you use are of great significance when putting up a space because a large number of traffic, sometimes even more than what you attract from other places combined, comes through a listing platform. Places like StartupBnb and Hubble are good starting points.
Maintenance and Operational Requirements
The initial investment for a coworking space based on the covered area, amenities provided and interior design can range anywhere between $10,000 to over $100,000. The caps depend on individual budgets and consumer requirements.
Then comes the bulk of it in terms of on-going expenses. These can be in the range of $1000 to $10,000, again based on similar factors like wear and tear due to usage, continuing investment as well as repair or maintenance of current services.
Opening a coworking space provides a sure path to a profitable business both financially and personally. The thing to bear in mind though is that you have to tread carefully, even when the idea is in a nascent stage. The venture will only be as strong as the foundation you provide to it through immaculate research and effective execution. After that, it is relatively smooth sailing to the end.