So - you’ve got a coworking business in mind.
At this point, it may be just a cloudy idea in your head or a couple notes and ideas jotted down on a document.
You need a well-articulated plan for a business to come to fruition.
This plan will not only serve as a sales pitch to seduce potential investors but will also be a key tool towards building your business.
In short, a well-written business plan takes a fuzzy idea and brings it to life.
Further, a good business plan serves as a blueprint; breaking down the process of launching a business into its core components; into more manageable chunks that can be tackled individually.
The research conducted to write a business plan will also help build a foundation of knowledge needed to penetrate the market and remain competitive in the industry over time.
In other words, from the very beginning, what you learn will be carried forward and serve as a bank of information that will drive your entrepreneurial venture forward.
The Purpose of a Business Plan
Articulate a vision
A good business plan will concisely communicate your high-level vision.
In other words, your business plan should be answering the question “why?”
Why should this business exist?
A common piece of advice for answering this question: Be convincing.
Your proposal should be concise and spark inspiration.
Communicate how your business will solve a problem
As a naturally curious and perceptive individual, your business idea came about because you noticed a gap in the market, a niche that needed filling.
Writing a business plan is an opportunity to express how you came about that realization.
In short, tell a good story! People have a soft spot for a good story.
A dry and technical presentation is sure to put potential investors to sleep.
On the other hand, thinking of yourself as the protagonist in your very own entrepreneurial narrative will help you express your story in a human and captivating way.
For example, perhaps you decided to launch a coworking space due to your struggles of feeling lonely as a freelancer or struggling to find coffee shops in your area equipped for long hours of work and reliable Wi-Fi.
It’s a great idea to mention this struggle in a business plan, as it adds a human quality to your story, making it more relatable and inspiring.
Define your business goals
Once you have shared your story and articulated exactly what problem your business is going to solve, you will also need to define your goals.
In short, what is your financial plan?
When presenting your idea to potential investors, this is crucial. You can have the most catchy and inspirational story on the block, but if your business idea isn’t backed by a viable financial plan and clear projections, you will have a difficult time convincing investors.
Essential Components of a Business Plan
Now that you have a high-level snapshot of the purpose of a business plan, let’s break down its anatomy.
- Description of your business
- Content & industry background
- Competitive analysis
- Service or product
- Marketing & sales plan
- Operations & management
- Management team
- Financial projections
The breakdown of a business plan will vary slightly from industry to industry.
When it comes to shared workspaces, there are some common elements found in a sound and comprehensive coworking business plan.
Also, there is no shortage of resources such as blogs, books, articles; even YouTube tutorials out there that can help you build a business plan.
Let’s start at the very beginning of the list!
Description of your business
If you’ve read any scientific or academic papers you will know that each one starts with something called an “abstract.”
Because these studies can be several pages long, an abstract serves to summarize the entire study in a few easy-to-digest paragraphs.
This is what the introduction of your business plan should achieve as well.
This portion of a business plan also has other names, it's often called the “executive summary.”
It’s essentially a snapshot of your idea.
Describe your business as concisely as possible, but also build some intrigue so that the reader is left curious for more details.
Context & industry background
How well you’ve done your preliminary research will be reflected in this portion of your business plan.
This section of your plan gives context to your idea and ultimately articulates why it’s relevant and needed in today’s market.
Coworking is a global movement, and there is no shortage of resources that can help you stay on the pulse of current trends and news.
One of the first things people will ask about your business: How are you different from the competition?
You need to answer this question with confidence.
That said, coworking is not a novel business idea, the concept has been around for over 20 years now, and has expanded all over the world.
So when it comes to a coworking space business plan, differentiating yourself from the competition is crucial.
Modern coworking is about creating and offering a niche experience; a unique value proposition to customers.
For example, coworking for women, luxury coworking, or coworking for tech startups.
The initial step to differentiation is understanding and articulating what your direct and indirect competitors are doing, and then explaining how you will set yourself apart.
As this helpful article from inc.com states “You might be surprised by what you can learn about your business by evaluating other businesses.”
Service or product
Articulating exactly what the competition is offering and how you will set yourself apart transitions nicely into the next section: Explaining services offered.
This is where you go into finer detail about your product breakdown and the types of memberships you will offer. In short, explain exactly what you will be selling to your future customers and at what price.
Depending on the nature of your business this section can be long and detailed or short and to the point. Regardless of length, this is another crucial component of a business plan because this is where you introduce finances into the bigger picture.
At this point, you will not only describe the services you will offer in your coworking space, but also give a pricing breakdown. This will serve as a base for the financial projection section of your business plan, which we will cover shortly.
Marketing & sales plan
Now that you have articulated the “what” of your business, i.e., what you will be selling. It’s time to explain “how” you will grow your business - that is, explain your sales and marketing plan.
A commonplace to begin is by first describing exactly who you will be targeting. In short, answering the question: who is your ideal customer?
Paint a detailed picture of your target or “customer persona.”
For example, describe their age, occupation, marital status, education level, gender, hobbies, interests, etc.
Your marketing plan should be built off this persona.
For example, will you be rolling out a paid digital marketing strategy, focusing on social media campaigns, or will you start small and organic? The marketing efforts you choose should be contingent on your target customers.
For example, if your target customers are largely inactive on Facebook, you’d be wasting your time (and money) with a paid Facebook ad campaign.
This brings us to budget. You want to answer what your budget is for sales and marketing, as this is an important figure for investors.
Operations & Management
The daily operations of a coworking space share a lot of similar qualities to the daily operations of a hotel.
For example, the operational plan of your coworking space should include details on the following:
- Reception services
In essence, operations have everything to do with what it takes to make your business run smoothly and efficiently on a day-to-day basis. And the operations manager is a conductor who ensures every part of the machine is operating effectively.
Depending on the structure of your business plan you can create a separate section to explain your management plan. This is where you describe and show exactly who your key leaders will be.
Not only do you want to name your key leaders, but also give a brief rundown of their work experience, education, and skills. This will instill confidence in potential investors.
You can also go onto describing exactly what their position and responsibilities will entail and estimate a salary range to be offered for each position.
The best is saved for last in a business plan.
After you thoroughly explained and fleshed out a convincing business idea, it’s time to get to the nitty-gritty. Numbers.
Of course, investors love numbers; they want to know if a business idea is financially viable. And your financial projections will inspire them with confidence that - yes, you can eventually achieve your bottom line.
According to this useful article from Inc.com, most business plans include these basic reports and projections. These are the most pertinent to coworking:
- Balance sheets: This describes the company's cash positions. Essentially showing the current financial health of a business.
- P&L statement: Otherwise known as a profit and loss statement, it summarizes the revenues, costs, and expenses incurred by your business.
- Operating budget: A breakdown of your operating expenses in from a dollars point of view.
- Break-even analysis: This is a projection of when you can expect your business to become profitable.
If you are less experienced with finances, fear not!
You can commission the help of a freelance finance professional or accountant to assist with building this particular section of your business plan.
However, we are in the internet age, and a quick Google search can turn up a wide selection of free resources, tools, templates, and even user-friendly software to help entrepreneurs build an attractive and sound financial plan.