A co-working space is a building or a center where people sign up as users to regularly come in and do their work. Professionals from various fields, backgrounds and organizations get an opportunity to network, collaborate and work in a motivating environment. The owner or founder of a co-working space earns revenue through membership charges paid by its users.
How do I start a co-working space?
Starting a co-working space is an exciting, fulfilling, and hopefully profitable endeavor. Let’s look at the step by step process of planning and executing the creation of a co-working space as a profitable business venture.
Prepare a plan
The first step is to plan your business model on paper. What you are selling, what problem you are solving, your unique selling point, how you will market and deliver the product, and such questions should be asked at this early stage. Also, think about your target audience and how to reach out to them.
For example, if your target audience is freelancers, you should reach out to neighborhoods with creative industries, or communities of digital nomads. Develop content in the form of blog posts, social media campaigns and video testimonials featuring successful freelancers who endorse co-working spaces.
Identify competitors
The best way to understand the market is to learn from your competitors- both from the successful and failing ones. Competitors could be direct, like other co-working centers, or indirect, like cafes, libraries, community working centers, etc.
If possible, approach rival businesses as a customer and observe your experience. What feels right, what could have been better? Use these insights to figure out the unique selling point of your own business.
Figure out specifics
The specifics of the business include the who, what, where, how- who will purchase your service, what they can expect, where you will set up your business, and how you will deliver the service, i.e., the membership and pricing structure, terms of contract, etc.
Location
The profitability of a co-working space depends on various factors like its geographical location, market demand, popularity in a community, amenities and services, etc. For example, a small town where employees from city based organizations work remotely, is an ideal location for setting up a co-working space. On the other hand, an urban area with plenty of remote work spaces, or a countryside location where most people work blue collar jobs, are both bad options.
Purchase or rent a commercial space that is both convenient for your target audience, and budget friendly for you. Take care of insurance and maintenance for your property. Read the terms of contract carefully, including the duration of the lease, provisions for renewal and the costs of renewal.
Revenue
Revenue model refers to how you plan to earn money from your business. Membership and renting are the two most common ways in which co-working spaces generate revenue. Co-working space owners typically earn revenue by renting out the space, the infrastructure and the services that a co-working center offers.
Businesses and professionals can use co-working spaces for seminars, training programs and promotional campaigns, for which they could charged an extra fee. Co-working spaces may also charge its users a monthly or annual fee for a premium subscription to the center. You can also make room for early bird discounts and special membership privileges for people who sign up early
Target audience
For most co-working spaces, the target audience is small business owners, freelancers, independent contractors and all kinds of professionals who need a desk space or a meeting room for a limited period of time. You can design your co-working space depending on whom you want to focus on.
Independent professionals who work alone might like an open space with desks, couches, etc. where they can work at their own pace and socialize whenever they are free. Business teams or training groups may need private offices and meeting rooms, wherein one room or entire floor is reserved for them.
Purchase supplies
Create a list of all the supplies you will need to invest in for your co-working space. Key areas of essential supplies are kitchen, bathroom and overall cleaning. In the kitchen, basic appliances like coffee makers, microwaves, utensils and basic ingredients like coffee, tea bags, sugar, salt, creamer, etc. are necessary for users to enjoy refreshments.
Bathrooms need to be well stocked with hand-wash, paper towels, toilet paper, and air fresheners for a clean and comfortable environment. Cleaners, disinfectants, trash bags and recycling bins are necessary for a crystal clear, pristine space. Thoughtful provision of these supplies not only meets the practical needs of co-working space users but also contributes to a positive and professional atmosphere.
User testing
You can invite a small number of prospective clients to use the service free of cost for a limited period of time. Then you can take surveys and interviews for feedback about the environment, staff, pricing structure, advertising and all other aspects of the service. Listen to useful suggestions, and work to modify the things that don’t enhance user experience.
For example, a user may find that the noise levels in the space are too high during peak traffic hours, and may suggest provision of noise cancelling headphones or designated quiet zones in sound proof cabins.
Marketing and publicity
A soft launch party is a great way to get to know your audience, make connections and test the waters. If you are confident that more people are interested in the service, you can increase your publicity efforts. If possible, you can invest in a dedicated team of professionals for marketing and public relations.
To conclude, launching your own co-working space is a step by step process involving several tasks like selecting a location, identifying your target audience, choosing a revenue model, arranging funds, user testing and feedback, and marketing campaigns. If you are an entrepreneur who wants to create a co-working space, I hope this article provided an overview of the things you need to do, before you start. Good luck!
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