Thinking about opening a coworking space? You’ll have a unique opportunity to facilitate collaboration and entrepreneurial activity in your local community and provide a professional workspace for those who need another option besides home and the coffee shop. Here are eight steps that will help you move forward with opening a successful coworking space and building an engaged member community.

Solidify Your Value Proposition and Business Model

Your value proposition is a promise to deliver a product or solve a need for a target audience. Having a good grasp of your business model is also paramount to your success. It’s important to know who your target customers are, what unique value you provide, how your business will leverage these strengths to generate revenue and what expenses you’ll need to consider to keep your space running smoothly.

The Business Model Canvas is a visual roadmap to help you answer how you’re going to deliver your product and reach your customer, and a great tool to determine the key functions of your coworking space. Once you develop a clear picture of your ideal customers and options for creating revenue, you’ll more easily be able to make decisions about your location, your specific offerings, pricing and amenities.

Research and Identify Local Competition

To help you shape your offerings and pricing, research and identify local competition to better understand your market. Write out a list of direct and indirect competitors. Work out of coffee shops, the library, other coworking spaces and consider the times you’ve worked in a traditional office. Make note of the strengths and weaknesses of these options to understand the unique value your space can provide and to help you fine tune what your coworking space will offer.

More importantly, whether coworking is unheard of or extremely popular in your town, experience it for yourself and take time to connect with others space owners and community managers. These opportunities will help you learn from their experiences and influence the direction of your coworking space. In the end, collaboration over competition is the heart of coworking and will help enhance your community.

Search for a Location

When you’re thinking about opening a coworking space, it’s never too early to begin looking at all of the available spaces in your community. The amount you spend on your building (mortgage or lease) is going to be one of the most important factors in reaching profitability. You’ll need a location that is suitable for your target customers and you must also stay within a budget that supports business longevity. 

When it comes to the lease, make sure it’s clear who will be responsible for any necessary buildout. Also be sure you understand all insurance requirements for the space you want to lease or purchase.

Most commercial leases are long-term (typically five years or more in length). When signing a lease, add a renewal option with specific provisions for extending the lease after the initial term at a fair rate agreed upon by both parties. This will help you avoid getting priced out of your location after your space is successfully up and running.

Create a Revenue Plan

What’s your initial budget? How many memberships do you need to sell in order to reach your break-even point for operating? Here are steps and considerations to help you work out the details of your offerings, pricing and target revenue.

Build a Pro Forma
A pro forma helps you identify your revenue potential as well as basic costs. It’s also used as a report for owners, investors and creditors to show how your business will reach profitability.

Determine Your Membership Types

A single membership type won’t fit every person who wants to work at your coworking space. That’s why drop-in, flex-desk and dedicated desks are all common membership types in the coworking industry. Offering each of these options allows flexibility for various work schedules and financial situations. Some individuals may only need a place to work occasionally, while others may want reliable, dedicated space they’ll return to each day. Keep your memberships simple and don’t overwhelm your customers with too many options.

Consider Dedicated Office Space

Office suites can be a hit or miss depending on the needs of your local community. Successfully leasing an office provides a strong revenue stream and is a must-have for many companies who want to join coworking spaces. However, offices can increase initial costs for buildout and furnishings. There’s also an opportunity cost when offices sit empty, so consider if potential office space could be better-utilized as a conference room or extra space for non-private, dedicated desks.

Offer Select Amenities for an Additional Charge

Conference room rentals, event room rentals, childcare, parking passes, lockers, sit-stand desks and mailing services are all options for amenities that generate revenue. Which of these are a good fit for your target customers? Consider how your community could best be supported and check out our Guide to Coworking Space Amenities for other ideas you can implement in your coworking space.

Start Building Your Community

Coworking spaces are first and foremost about community. If you can successfully build one before you open, it will be much easier to hit the ground running. Many successful space owners spend months hosting meetups and gathering people to connect and network before opening the doors of a coworking space. 

When you host gatherings, collect email addresses of attendees and start to build an email list. As the plans for your coworking space come together, keep your network updated with your progress and encourage them to invite friends and colleagues to future events.

Manage Early Cash Flow and Expenses

Going above your initial budget is, unfortunately, very common when opening a new coworking space. Capture early interest to generate cash flow and reduce your initial expenses with these two tips:

Pre-Sell Memberships

Don’t wait to open before you start signing up members. As you build your community and generate interest in your project, offer a discount to members who are ready to join your space before you’re fully up and running. Do give members an opening date and don’t sell memberships if it’s too early to provide prospective customers with a clear idea of what they’ll get with a membership. Check out How to Pre-Sell Coworking Space Memberships for more tips.

Create Partnership Opportunities 

As a coworking space owner, you’re going to create and grow a member community. There are undoubtedly many local organizations who will want to not only support your efforts, but also get relevant products and services in front of your members. Partnerships are a great way for other local businesses to be involved in the creation of your coworking space and have an opportunity to provide value to your members. Partners can provide resources such as branded office supplies, kitchenware or coffee that will reduce your initial costs and allow partners to represent their brand in your coworking space.

Prepare to Purchase Supplies

Create a detailed list of the supplies your members will need once you’re open. Consider items including:

• Kitchen appliances
• Variety of coffee and tea options
• Common office supplies (pens, printer paper, stapler, sticky notes)
• Bathroom supplies (toilet paper, bathroom spray, femenine products)
• Cleaning supplies (sponges, dish soap, multi-surface cleaner, mop)
• HDMI cables and various adapters
• Spare chargers for phones and laptops

Plan a Grand Opening Celebration

Throwing a grand opening party is not only fun, but it’s also a great way to generate buzz within your community. Opening a coworking space is a big deal and you want to give your community the opportunity to celebrate as well as educate them more broadly on what coworking is. Notify local partners such as your chamber of commerce, economic development leaders, city council or university. Write a media release and send it to your local news outlets at least one week prior to your event. Be sure to announce your event via email to your network, as well as on social media channels.

As you plan to open your coworking space and build your member community, Proximity is here to support you with free programs, resources and training that will spark new ideas, boost your skills, and provide useful information. Happy coworking!

This post was originally published on December 19, 2018 and updated on January 23 2020.