The Coworking Industry is Booming!
It’s not too late to build your own coworking space. In fact, now is a better time than ever before. Before you buy a building or lease a space, though, it’s important to do your own research first. Below are some of the most popular pieces of the early stage strategy of considering whether or not to start your own coworking space.
Coworking Industry Growth links:
- Coworking’s Unstoppable Market Growth
- Coworking Key Figures: Data and Estimations for 2018
- Coworking is the new normal and these stats prove it
If you’re starting a coworking space, here are 6 components to address as you are strategizing your business roadmap.
1. Coworking Space Financial Model
Everything begins with the finances. Even though coworking began with the focus on community, ultimately these days, in order to compete and succeed in this growing market it is absolutely necessary that your space is well planned and managed from a financial perspective.
Coworking Financial links:
- Starting A Coworking Business: Financial Model
- 4 Financial Metrics your Coworking Space Should Track
2. Coworking Space Business Plan
What’s in a coworking space business plan? Business plan formats have been around for years, and for the most part, they are the same for coworking businesses as they are for other businesses. The reason they’re becoming more popular (and needed) these days is that it is now possible to get a small business loan (or general investment) to begin a coworking brand. In the early days, the industry was so new, you had to self-fund it personally, so it wasn’t as necessary to “prove” the plan to anyone. A coworking business plan is essential if you’re looking to share your concept with a potential investor. Chances are they are not going to be focused on the passion, but are focused on the efficacy of the plan.
Coworking Business Plan links:
- Make Your Coworking Space Business Plan: Finance Resources for Coworking Spaces
- How to Make a Profitable Co-working Business Plan
3. How to Design a Coworking Space
In the early days, this meant simply finding a space that was open and then putting some furniture in it. Painting the walls, putting up some signs, etc. But now that financial models are tied to a plethora of private offices, it is necessary to ensure that your space has sufficient space allocation for high dollar private offices. This requires thoughtful buildout and construction plans. If you are not an architect, you will need to engage one. Fair warning- most architects do not have experience building coworking spaces, so you will need to make sure to stay actively involved in its design and planning.
Coworking Design links:
- The Essential 8-Step Guide to Designing a Coworking Space
- How to Design an Awesome Coworking Facility
4. Coworking Space Business Model
The business model is driven by membership types (people) and resource types (space). For example, a member that is interested in hotdesking will be in an open space and will generate X amount per month. This user generally stays in the membership for Y amount of time. Building a reliable business model around hot desk users, though, is no longer financially feasible. Now that there is a huge uptick in corporate coworking memberships, the increase in private offices and team rooms in coworking spaces have skyrocketed. This is a fortunate thing for coworking space entrepreneurs as this allows the financial model to be a reliable source of consistent revenue. If you have the financial model solidified with consistent office rental, then the transient nature of freelancers and independent entrepreneurs will not destabilize your financial model.
Coworking Business Model links:
- Key Aspects of a Coworking Business Model
- Coworking Financial Model?
- Is there anywhere I can find a spreadsheet with a generic financial model for a coworking business?
5. Coworking Space Calculator
Often people are looking for a quick calculation of projected revenues and expenses. For this you can hire a proper coworking consultant or you can also find quick and easy ways to calculate it yourself.
Coworking Calculator links:
6. Coworking Space Marketing Plan
If you build it, they will come….right? Well….it’s not so easy. Especially since financial models are based upon a lot of private office rentals. It’s necessary to focus on smart outbound marketing to the right type of user to fill up your coworking space. In addition to attracting new interest and memberships to your coworking space it’s also important to actively engage your existing membership, as often creating happy members can be your best marketing technique! How can you improve engagement in your coworking community with online tools?
Coworking Marketing Plan links:
- 10 Coworking Space Marketing Tips to Drive More Members
- 16 Creative Ways to Market Your Coworking Space
- How to market your #coworking space… and what to avoid