An Overview on How to Start Coworking Space Business
To start a Coworking space business, you need an area where people or groups of people can share their interests and interact for mutual benefits. Space where people from a closed ecosystem to work more effectively and efficiently. Here are the complete guidelines of how you can open and run a profitable coworking space business.
Before planning for land, location, or making any investment, you must do certain things. For example;
- Your primary concentration should not be on the design of buildings but on the type of ecosystem and community you want to form.
- It would be best if you were valid on the functional part; business will automatically come. The functionalities and operations of a company can make or break your business.
- There should be comprehensive and excellent research in finalizing the location for coworking space. It is very critical and plays a crucial role in the future of your business. People will not come from far. The concept of coworking lies to facilitate the overall experience of a businessman or a professional. And, of course, distance plays a crucial role.
- Concentrate on providing the amenities, utilities such as uninterrupted latest high technology, internet, conference room, projector, water, and other facilities. Furniture and decoration of the building are secondary and doesn’t matter a lot.
- During your research and before stepping into it, you should consult veteran coworking owners and CEOs for ground reality, target market, and for any suggestions. If you want to prefer online sources to enhance your knowledge, then you can prefer Co-work Wiki. It will provide relevantly and ease your queries.
#9 Step Guide on How to Start a Coworking Space
#1. Creation
You need to create The Company Profile, decide on the Name and Logo. Take the trademark of logo and company name to protect your Intellectual Property (IP).
#2. Registration
Register your company in the coworking business and get all the legal formalities and documentation done.
#3. Sources of Investment
Develop your financial model and ROI. List down the various sources from where you are going to raise funds. The causes can be self-funded, Venture Capital, partnerships, Banks, or a few others.
#4. Build a Team of Work Rich People
It would help if you had a competent team, especially marketing and research analyst, IT professionals, and the rest can be the standard set pattern of employees like in the hospitality sector.
#5. Spy Eye in Finalising the Location
As discussed above on which factors the location is the most prominent and crucial aspect of any workspace. Most members and employees would prefer an accessible site that is closer to their business opportunities. Once it is done, you can hire a broker/ agent who would look out for properties in the area on behalf of you.
#6. Buy/ Lease/ Franchise
After finalizing the location and selecting the property with the broker or agent’s help, you can get your lawyer to review the legal documents. If you do not have the heavy investment, you can rent a building from the owner for 10,15, or 20 years, whatever suits you.
#7. Architect, Designer, and Engineer
Hire a designer or architect who can make your building as per the market demand. The design should be vibrant and quirky with basic amenities like meeting rooms, pantry, break out areas, and some others,
#8. Higher full Team and Start the Marketing process
Now it’s time to settle down and make the building operational. So, it would help if you had a sales, marketing, IT, and accountant team. Start aggressive marketing of your brand, services, and offerings.
#9. Run Testing before the Launch
Have a test run of the property done before the launch date and then finally launch the park with the guest list filled with who of various industries.
Things your Coworking Space Business can do to get Competitive Edge
- Full utilization of space with Zero wastage
- When the startup or SMEs grow in your coworking space, his team size also grows. He/she demands more areas, and automatically your business grows.
- Reduction of office maintenance cost
- Reduces upfront costs of setting up an office
- People think that Home is for procrastination and they can’t be productive there. Hence they prefer nearby coworking spaces.
Who is your Target Audience and to Whom you should Market
- Freelancers
- Professionals
- Small Medium Enterprises (SMEs)
- Startups
- Remote employees
- Corporates who are scaling their businesses in different countries.
Types of Coworking Space Businesses
- Pure Real Estate: Workplace as a Service model (BHive, BoldKiln)
- Educational: Office + Courses (Galvanise)
- Equity: Accelerators/Incubators
- Sector-specific: Dedicated coworking for a vertical (Campfire)
- Coworking for large enterprise/Business Centers (Regus, Vatika)
- Coworking Aggregators (WeWork, Breather, Qdesk, PivotDesk, Kowrk)
- Coworking Marketplaces (PeerSpace)
- Cafes/Restaurant/Pubs as co-working spaces (MyHQ, Coworkyard)
- Coworking for the community. e.g., women (The wing)
Mistakes that can Break your Business and Bring you Down
- Bad Location
- Cheap or Poor Community
- Poor internet connections, noise levels, and lack of privacy
- Lack of Conference and Meeting rooms
- Higher Pricing with Lack of Plans
- No Facility of Cafeteria with coffee, snacks, food & beverages,
- Lack of Mentor and Investor network
Total Investment and Cost Involved in the Coworking Business
Much like starting up, ongoing operating costs vary massively depending on location. Local utilities, taxes, etc., contribute heavily to the varied budgets.
Monthly Fixed Costs will be
- Rent + taxes
- Part-time office staff
- Electricity
- Internet
- Cleaning service
- Coffee
- Management software (Basecamp, etc.)
- Office Supplies
For 1800 square feet Hall
Total monthly operating costs were ~$3600/month at your peak costs, slightly more in winter and summer months when electricity usage spiked.
For 4500 square foot Hall, Your Total Monthly Operating Costs are around $9,000.
For rent x 3 (First/Last/Security) $1,600 for additional workstation furniture $600 for first conference room table & chairs $300 for whiteboards $3,000 for networking equipment $2,000 for projector & installation equipment $5,000 for misc furniture, lockers, kitchen supplies, etc
Your initial 1800 square foot Hall will cost around $6,000 for rent x 3 (First/Last/Security). $2,000 for 20 desks & chairs, $150 for a wireless router, $500 for a 1-year insurance policy, $300 for misc things like trash cans & bags, cleaning supplies, etc.
Closing Keynote on How to Start Coworking Space in 2023
According to the reports of CBRE and the detailed research and analysis by The Blue Oceans Group, the coworking space industry will increase by 277% by 2022. Currently, tier-1 cities like Delhi, Gurgaon, Mumbai, and Bengaluru have the maximum coworking buildings in India. The operation will scale by 25-30% in tier 2 and tier 3 cities of India by 2020, due to the increase of demand by 40% for coworking spaces.
Also, in tier-2 and three towns, the number of seats is expected to reach 9 Million. The idea of flexible workspaces has undergone massively over the last two years, especially for startups and small-medium enterprises.
Future growth of the Co-Working space business is 3X by 2023. It has massive growth and opportunity. Though real estate is still reviving, the growth of the coworking business is magnificent and phenomenal.
If you want to become an entrepreneur and dream of having your business, then the Coworking space business can be the best deal to get into it.
If you have any queries, then leave them in the comment box.
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