The first coworking space appeared in 2005, in San Francisco at the initiative of Brad Neuberg. It was also then that the first mention of the word “coworking” appeared in connection to shared offices. It was called San Francisco Coworking Space and it was open two days a week: Monday and Tuesday. In the first month, it was completely empty because no one knew about the concept initiated by Brad.
Thus, the term “coworking” defines a shared space, which can be used on a subscription basis by anyone looking for an office. It’s a space where you can work together and collaborate.
To whom is a coworking space addressed?
Coworking spaces are usually aimed at people working in the digital field.
What does this mean? Practically anyone who only needs a laptop, a good internet connection, and… good coffee (or tea, no discrimination) to carry out their activity, can work from a coworking space. As an example, we can mention professionals in the field of software development, design, marketing, and even accounting or law.
Usually, these people are freelancers, remote workers, or entrepreneurs with small companies and teams. But the profile of the coworker is not only limited to them. Even corporate employees can occasionally be found in such spaces when they travel on business or need a few days of work in a creative environment, far from classic offices.
There are, of course, coworking spaces niched in certain fields. This niche refers to the type of people you will meet in that space, but also the facilities it offers. Thus, the offer can include spaces dedicated to creatives (maker space, with workshops and all kinds of tools), spaces addressed to social projects, spaces for those in the tech field, and even spaces dedicated to chefs.
What should you take into consideration before opening a coworking space?
Before starting a business, an entrepreneur must have both motivation and a structured plan. This is also the case when opening a coworking space and here are some of the things you need to consider before starting this type of business.
Of course, a coworking space will provide top-notch seating arrangements and world-class facilities, but if the community you are working with needs a place similar to an everyday office then there is no point in arranging such a space. What you have to do is to grow a collaborative, efficient, and energetic community in your coworking space.
Members will pay attention to what a neighborhood has to offer. It is important for people to have where to park their cars and have easy access to public transportation. Also, it wouldn’t be such a good idea to open a coworking space on a busy, noisy street.
It is not easy to find the perfect location for your coworking space as it is a new business and you don’t want to pay too much for rent. It is not recommended to rent a place in a premium area of a city. It would be a good idea to find a space at a lower cost that is easy to access. As a tip, you should look for an old building. For example, you can find 2000 square feet of space, that is away from the Central Business District, at the cost of around $800 per month. Most of the commercial properties require two months’ worth of rent in advance and have a norm for security. So, you should budget Rent x 3 for the initial rent cost.
Also, depending on your coworking business model, you may need a specific location. For instance, a startup-centric coworking space should be located close to a popular college or university, while a coworking space that targets members of the legal community should be located close to the courts.
You should have your own team
Opening a coworking space is just like opening any other business; you need the right people by your side to help you set up everything. However, you have three possibilities when starting this type of business.
You can choose to do everything by yourself and save some money. For instance, you would have to pay anywhere between $1,600 and $2,200 per month to a Community Manager.
Or you hire specialized people to do all the things that are needed to open a coworking space. It would be more expensive, but you will get the desired results. One person will take care of the diverse services in the space and another will handle the marketing tasks.
Finally, you can outsource some of these duties and so save some money with the workspace that can be rented further.
The best of all these three possibilities for starting and running a coworking space is to have specialized people for each business department. You may think that you can handle all of these by yourself, but at some point, it will be overwhelming and you will end up self-doubting. On the other hand, if you will work with dedicated people things will be much easier. Here are some of the tasks that can be managed by your team:
- keeping a record of everything;
- holding events;
- organizing promotional activities;
- looking towards the cleanliness of the workspace;
- community build-up;
- making sure that there is enough coffee and snacks for the members;
- looking after the membership;
- looking after the member’s complaints;
- making sure that the members get all the facilities.
When opening a coworking space there are some activities that are absolutely necessary and, if you are alone, you will have a lot to do when people start to come in. That is why it is recommended to hire some people to help you successfully run this space.
For starters, you will need an administrative manager, an operations manager, and a community manager. Plan on spending anywhere between $4,200 and $5,200 per month on these three employees.
Alex Hillman is an example of an entrepreneur that opened his first working space with only $6,000 and you may wonder how. The answer is simple – it was back before 2012 when this coworking trend was new and people were enthusiastic to try this experience.
It is important to provide services and facilities
The services you offer to the members should be in accordance with your business goals and mission. For example, a coworking space that focuses on assisting startups should offer amenities and services which help them grow, such as conducting workshops.
The possibilities are endless when it comes to the amenities and services provided by a coworking space. Depending on your budget, you can make it very attractive. But if you are on a tight budget, you must focus on the necessary and essential services and amenities and we are going to talk about each of these in the following lines.
The most important utilities in a coworking space are printing and internet facilities. You will not be able to run a coworking space without an internet connection. Also, another service you need to consider is coffee as most of the members will ask for it when they come to work.
You should not forget about installing electrical outlets close to every coworking station. And lastly, you will have to arrange for water outlets and washrooms. You should budget around $11,000 for the electrical outlets and washrooms. Keep in mind that this estimate is based only on what is needed for starting the coworking space.
Cooling and heating systems should be installed to control the temperature inside the coworking space. Plan on spending $4,100 to $5,100 for a dual HVAC system, for a 2000 square feet area. These central solutions are absolutely necessary to ensure a comfortable working space for the members.
You will have to establish the exact types of membership you will offer before opening a coworking space. However, there are two types of memberships you will find in every coworking space, and these are the hot desk and dedicated desk options. You will be able to accommodate around fifty people in a 2000 square feet area, which means that you will need a minimum of fifty ergonomic chairs and, depending on their usability, some desks. On the other hand, for dedicated desks and others, separated storage racks and storage spaces will be needed.
If you have money, you can make the workspace more attractive by spending on interior decoration. Also, you can give a versatile appearance to your space by including standing desks.
Initial optional services when starting a coworking space
The ultimate aim of a coworking space is to offer its members as much comfort and convenience as possible. But, in the initial stages of building this type of business, you can leave behind some services that will do nothing more than add up to the costs in the beginning. Some of these services include private offices, a bike rack, an exclusive kitchen, a shower facility, lounge areas, and phone booths. For sure these services and others will make a difference, but will also increase the initial investment. And you should make little baby steps when opening a new business.
How to scale a coworking space?
In order to reach a larger market, you will need to scale up your coworking space. There is an extraordinary magnitude of scaling up just a few months since opening this business. Firstly you should evaluate the progress you made in the last period and then expand. For attracting more clients and finally grow the company you should add some more services and features, and add value to your business plan. For sure, these steps will help you to scale your coworking space and widen your work market.
The initial investment for starting a coworking space
When talking about the capital you need to open a coworking space, we’re actually talking about the expenses that will be done before the opening of a coworking space. The total initial costs that you may have to support when opening a coworking space are the following:
- utilities and services, which include the HVAC system, the remodeling, painting of the workspace, and the electricity setup; all of these would cost around $31,000;
- rent, which is anywhere between $800 and $1,200 (the initial rent cost is Rent x 3);
- staff, which would include an Administrative manager, a Community Manager, and an Operations Manager will cost $4,200 to $5,200;
- furniture will cost you around $8,000 if you have 10 desks at the price of $470 and 50 chairs at the price of $60.
So, if you want to open a coworking space, the total initial cost would be around $40,000.
Most office spaces come with a number of amenities that can be accessed by members. This means that, in addition to the actual office from which people can work every day, it gives them access to a whole set of complementary services designed to make their work easier. Whether we’re talking about meeting rooms that they can use for offline or online meetings, stable and fast Wi-Fi, coffee (usually unlimited), or a place to relax (bean bags, couches), coworking spaces are meant to make their life easier and why not, more enjoyable. Members have all these services included in the subscription and get rid of all the hassle that comes with managing their own office.