Coworking is taking over the world.
As a result, entrepreneurs are flocking to coworking to take advantage of this blossoming movement.
That said, opening a coworking space is not an easy task, it will be an ambitious and multi-disciplinary journey.
Becoming a fully-fledged coworking space owner also means being a jack of all trades.
You will have to familiarize yourself with multiple industries and specialties, including commercial real estate, design, technology, and much more.
As a result, you can’t go step into this totally blind.
Equipping yourself with a high-level picture of what it takes to open a coworking space is the essential first step.
This mental road map will allow you to anticipate potential friction points and obstacles during the start-up process, and as a result, be more prepared to bypass common obstacles and make decisions quickly smoothly.
Here is a high-level glimpse at the most crucial steps leading up to the opening of a coworking space.
By the end of this article, you will have gained a deeper, more nuanced understanding of exactly how much time and resources it will take to make this ambitious entrepreneurial goal come to life.
Conduct Preliminary Research
Any experienced entrepreneur will tell you that research is fundamental to launching a business.
In short, your goal is to gain intimate knowledge of the coworking market and competitive landscape.
That said, this becomes a more complex exercise because when it comes to coworking, each market is unique.
Coworking trends vary from country to country, region to region, and city to city.
As a result, it's crucial that you research not only high-level coworking trends and landscape but also the coworking trends in your area.
Connect to the coworking community
Coworking is a global movement, and behind every movement are passionate individuals responsible for pioneering this change.
If you want to gain an intimate knowledge of coworking, it’s vital to stay on the pulse of the industry.
Your goal is to consume as much coworking related media as possible.
And there are plenty of coworking “influencers” and experts out there creating valuable content specifically geared towards coworking operators.
Here are a few digital publications and other media you can follow to stay up-to-date on the latest coworking new and trends.
- DeskMag, otherwise known as “The coworking magazine”
- Everything Coworking Podcast, hosted by Jamie Russo
- Coworking Mag
- All Work Magazine
- Alex Hillman Blog
- Coworking Out Loud, by Cat Johnson
Create a Financial Plan
At this point, you want to ask yourself a very important question: Financially speaking, can you make it on your own.
Coworking spaces can turn a profit, but like any business, a significant investment must be made before you can start generating revenue.
Determine a basic offering
Determining your basic offering, in other words, which membership types you will offer and their relative prices is the first step to being able to draft a viable budget.
Not sure where to start?
You can get inspired by some of the most common membership options offered by modern coworking space. However, you can also get creative and offer a variety of unique memberships and plans that reflect your space’s mission and that you feel will attract the right type of people.
Start-up costs & budget
Determining your start-up costs and drafting an initial operating budget demands having a rough idea of the anticipated size of your operation.
In other words, this is the point where you will have to decide how big or small you want your space to be.
The majority of the initial start-up costs will be spent on a lease and real estate costs, which will be steeper for a larger space.
Other things that will contribute to your initial start-up costs are insurance, office furniture, interior design, paint, carpentry, plumbing, electrical work, wireless internet & IT system, hardware and set-up, kitchen supplies, cleaning supplies, etc.
As for your operating budget, this will also vary greatly depending on the size of your space. Now that you know your basic offering and prices, you can easily calculate a rough overhead revenue. Keep in mind some common operating expenditures are rent and taxes, payroll, marketing and advertising, cleaning services, coffee and supplies, and business software.
Shop For a Location
Now you have an idea of how big you want your space to be, and you have determined a financial plan and budget; you are now in the right place to start shopping for real estate.
This is also where your preliminary research will come in handy, as the research you’ve done will help you determine which areas and neighborhoods are desirable to launch a coworking space. That’s when the real estate broker steps in to help you shop for the perfect space in specific neighborhoods.
Once you find that perfect space, it’s time to acquire the property.
Here are the various ways to do that.
Leasing a commercial space
Most coworking space owners lease commercial space.
This method has a few obvious advantages, the most important being that it removes the heavy financial burden of actually purchasing a commercial space. Similar when you rent for personal use - as opposed to buying - leasing a space removes the burden of having to deal with taxes and facility maintenance as well.
The drawback of leasing is that it’s somewhat inflexible. Most landlords prefer tenants to sign long-term leases, normally between five to ten years.
Subletting your coworking space
The alternative is subleasing. This is a low-risk and flexible way to acquire commercial space.
The main appeal of this type of real estate agreement is that it may not require as long of a lease and commitment as leasing.
For example, you might find a move-in ready commercial space with only a couple of years left on the lease. This will give you time to build out your space, and may also give you the option to renew or take over the lease once it’s up.
Although sub-leasing is low-risk, it comes with drawbacks. When the sub-lease is over, you might be required to move. As a result, you may not want to sink too much capital into building out or designing your space.
Profit share leases
This type of lease agreement is designed to be mutually beneficial for the landlords and operators.
Landlords will contribute to the cost of the space build-out and accept a modest rent rate; however, they take a percentage of the profit generated if and when a certain sales threshold is achieved by the operators.
Build Your Space
Now that you have locked down a location, it’s time to spread your creative wings and bring your brand to life!
Your goal is to plan and execute the building of your space, for example, creating an optimal floor plan, and also designing and furnishing. In other words, creating a visual brand identity for your business.
Depending on the condition of the commercial space, bringing your vision to life might require the assistance of experienced professionals like an architect, interior designer, engineer, and contractors.
Optimize the floor plan
Designing a floor plan with the help of an architect is the first crucial step towards successfully building out your space.
Due to the successes and failures of past coworking businesses, helpful formulas exist for optimal floor planning.
An architect with experience designing offices and coworking spaces will be a highly valuable asset at this point in the process.
Once you have drafted an optimal floor plan and have a blueprint in hand, you can start bringing this plan to life with construction.
When it comes to construction, you will enlist the help of a contracting company to complete the heavy renovation and construction work.
Also, you can consult with an electrician or engineer to design the infrastructure of the space.
For example, ensuring that there are enough electrical outlets throughout the space. Or if you’re located in a four-season climate, to ensure that you have an updated and functional heating system.
Once all the heavy construction work is complete, your space will be ready to be transformed into a functional and beautiful workspace.
Furnish & accessorize your space
This is your opportunity to bring your business's brand to life!
The furniture pieces and objects you use to decorate and adorn your space should reflect the culture and feel of your business, so pick them wisely!
Commercial office furniture can be easily found. From high-end to affordable and everything in between, make sure you select pieces with the function as well as aesthetics in mind.
Find The Right Technology
It’s 2019, and a modern coworking space can’t run properly without the help of technology.
When we say “technology,” this encompasses everything from strong, reliable Wi-Fi, to coworking management software, and even keyless access solutions. In short, leveraging the power of fast and innovative technology will help reduce member churn and give your business a leg up on the competition.
Wi-Fi & router
The quality of your internet and Wi-Fi connection is without-a-doubt one of the most important features of your coworking space offering.
In short, fast and reliable internet is not a member want, it’s a basic necessity. With the right research, professional assistance, and quality hardware, you can provide your members and guests with a reliable internet connection.
That said, all modern coworking spaces require the various type of software and digital platform to manage and automate tasks like creating member accounts, billing, communications, and marketing.
For example, powerful coworking space software like Spacial can help you manage your space with automated billing, easy room booking, and a digital touchpoint for members to flag issues.
Keyless access control systems
Long are the days of the classic clunky locks and metal keys; a whole new spectrum of keyless technologies and “smart locks” are taking over the market. You probably already use one of these types of keyless technologies daily at your apartment building, gym, or office.
Ranges of keyless technology exist to fulfill the needs of your coworking space. You want to choose the keyless system that right for your coworking space and fit the needs of your space and budget.
Hire a Killer Team
The staff of your coworking space is the backbone of your business.
These people will interact with members on a day-to-day basis. They also represent your company and function as an extension of your brand. As such, you must bring the right people onto your team!
First, decide how many full-time and part-time employees you will need to launch your space. Here are some common roles found in modern coworking space.
If you’re on a tight budget, you may only want to hire one community manager, other than yourself, to help run your space.
However, if you have a larger operating budget at your disposal, you can hire multiple people to help scale your business.
Hiring a Community Manager
Warning: This is not a standard 9-5 office job.
A Community Manager is your greatest asset. They are almost always on their feet, and depending on the size of your space the Community Manager will be responsible for several daily operational tasks, but also accountable for the fulfillment of long-term goals.
Create an Online Presence & Promote Your Space
Your space is now ready to be shown to the world!
Now is the time to take high-quality pictures, build an online presence on Google Business and launch social media pages, and begin crafting a marketing and sales plan. The initial goal is to create brand awareness and ultimately generate sales leads.
In essence, your goal is to get the word out.
You want your local community to start talking and a buzz to be created around about the new coworking space in the area.
Establishing a brand and digital presence
It’s an inarguable fact of 2019: all modern businesses need a social media presence.
Don’t be fooled by the seemingly superficial nature of these mediums. It’s easy to assume anyone can be a social media guru because of our familiarity and personal use of these platforms.
The reality is, social media platforms are just another marketing channel.
Here are some helpful tips for building brand awareness and driving sales by leveraging the power of these channels. Ultimately, executing an effective and high ROI social media strategy requires just as much careful planning as any other traditional business objective.
Launch Your Space!
Launching a space and creating a buzz go hand in hand.
Think of a new trendy restaurant that throws a “soft launch,” inviting only select friends, media, and influencers.
Similarly, you can launch your space and organize an event surrounding the launch. This will facilitate getting the word out and get a buzz-generating.
That said, once your space is launched, you can officially start conducting tours and searching for the right people to fill your space.
Create an Outstanding Coworking Experience
Once new members are signed up, the hard work doesn’t stop there.
Continuously creating an outstanding member experience serves as a buffer against member churn. This all starts by consciously cultivating a sense of community, organizing fun and meaningful events, and creating an environment where members consistently feel welcome and at home.