The last two years have accelerated the growth of the flexible office industry. It’s a surge that’s been supercharged by the rise of remote work and the changing demands and preferences of employees. And it doesn’t show any signs of going back to the way things were.
As a result, coworking will continue to grow and demand will increase, creating a significant business opportunity for those who see its potential.
There’s nothing simple about starting a coworking space, but it can reap huge benefits for building owners and landlords. So, what’s the process on how to start a coworking space?
The Future of Coworking
The pandemic forever changed how we work, and employees increasingly need flexible office space. And for commercial landlords and building owners, starting a coworking space can be a great way to help future-proof your building.
With new workplace demands and a changing future, it’s an incredible way to boost revenue, monetize vacant spaces, and reduce the risks associated with losing large-scale tenants.
Here’s what you need to know about how to start a coworking space and take advantage of the changing face of commercial real estate.
10 Steps to Starting a Coworking Space
1. Understand Your Target Market
Instead of trying to cater to everyone, narrow down your audience and make sure you understand your target market.
Depending on the type of space you’re aiming to open, this could include:
- Solopreneurs or remote workers who want flexible coworking space.
- Small businesses and teams that need access to meeting rooms.
- Professionals with clients who can benefit from a dedicated, private office.
Other things to think about with a target market and how to start a coworking space include:
- Age and demographic—i.e., young solopreneurs or established small businesses.
- Location—urban or suburban areas.
- Industry and experience level.
2. Have a Clear Intention
Why are you interested in starting a coworking space? Knowing your intent focuses and motivates you to take on a big project like how to start a coworking space.
Profit is likely one reason—but here are some others:
- To fill a need where you live.
- To connect with like-minded professionals.
- To give back to the community.
- To prepare for the changing future of commercial real estate.
3. Decide on Your Business Model
Coworking spaces can look different, depending on the needs of members. It’s important to decide on your framework so you know what you’re offering. Here are some options:
Offer A Coworking Space With Private Offices
Professionals who need a dedicated, quiet space to meet with clients will need private offices. Consider offering these alongside flexible, open workspaces.
Set Up A Coworking Space Within Your Business
If your office or workplace has unused areas, setting up a coworking office within your business might be a good idea. You can offset some of the overhead costs and welcome a wide variety of professionals into the space which boosts networking opportunities.
Include A Coworking Space Within Private Spaces
Other businesses, such as restaurants or cafes, may want to partner with you on how to start a coworking space, as it can help boost their revenue potential. Launch Workplaces has used this framework through their managed model solution for landlords and is always looking to help building owners open a coworking space.
Transform Public Spaces Into Coworking Space
City-owned real estate might be another option on how to start a coworking space. Consider speaking with city officials to see if there are any available spaces that can be transformed into a coworking office.
Add Events to Your Coworking Space
Networking events, seminars, or social activities benefit members of the coworking office and the community. If you build a coworking office to also host events, you can boost your revenue and provide value to members.
4. Prepare Your Budget and Investment Plan
You may wonder, how much does it cost to start a coworking space? It’s different for every operator, and the only way to know is to make a budget. Consider your costs carefully:
- HR costs: staff salaries, training, benefits.
- Overhead costs: rent, utilities, internet, etc.
- Technology and amenities: IT, kitchen appliances, office supplies, etc.
After preparing your budget, consider making an investment plan. Investment can come from different sources, including personal connections or VCs.
5. Create a Price Structure
After deciding your target market, framework, and budget, you can come up with a price structure. How much will you charge clients to use the coworking office? Pricing can be based on:
- Annual contracts for private offices or team suites.
- Coworking day pass or membership rates.
- Virtual office services.
6. Find the Right Location
Location is so important—it can be make-or-break for members considering where to go.
- Is it close to public transit?
- Is there parking?
- What else is in the neighborhood?
- Is there enough demand in the area for a coworking office?
7. Build Out Your Space
This is where you start to see it come together! When building out your coworking office, keep these four areas in mind:
Furniture and Fixtures
You’re going to need desks and chairs, but there’s so much more than that. Think about the aesthetic you’re going for—will it be professional and simple or fun and trendy? From there, think about purchasing couches, tables, kitchen supplies, light fixtures, decor, artwork… the sky’s the limit!
Most people need a coffee break to get through the day! Make sure you build in amenities and perks that benefit members. This can include kitchen access, complimentary coffee, networking events, wellness initiatives, or discounted services.
Amenities also include the essentials of any workspace: printers, all office supplies (paper, pens, hole punch, etc.), cleaning supplies, and kitchen essentials.
High-speed internet is a must. Invest in something that will be lightning-fast and reliable!
Your facilities should be clean, usable, comfortable, and intentional. Really focus on what will bring value to the space.
8. Foster a Sense of Community
One reason people are drawn to coworking spaces is because of the sense of community. You want to foster it, even before you launch! Do this by:
- Creating valuable and engaging communication through social media..
- Starting a newsletter to keep potential members up to date with each other’s stories, happenings, and more.
- Hosting events, whether it is a meet and greet or a yoga class, for people to tour the space or get to know each other.
You also want to focus on how to get people together in a coworking space. Options like holiday celebrations, art shows, and charity projects are a great way to bring people together and foster a sense of community.
9. Publicize and Sell
Start by building your brand and increasing brand awareness of your coworking space in the community. Then, work with marketing and sales professionals to get the word out!
Offering incentives or trials can be an effective way to get people’s “foot in the door” and see if there’s interest! A referral program can also bring in more members to your coworking office.
10. Launch Your Coworking Space
It’s time to welcome coworkers into your new space! Make sure you keep up the positive atmosphere with events and activities for members to get involved. Stay on top of social media and digital marketing to create buzz and interest.
Finding a Partner
For commercial landlords and building owners, opening a flexible office space is an optimal way to boost revenues by filling vacant spaces. In fact, it’s a way to reduce some of your risks associated with traditional office leases.
Here’s the thing—starting a coworking space is not easy.
In general, if you have multiple buildings with coworking operations, then this investment of effort, time, and, and money might make sense.
If you only have one building, it may not be worth the time, effort, and money to educate yourself on how to start and operate this properly.
It’s an incredibly challenging process and many operators fail. They often make costly mistakes that you can only learn from an experience.
So, in many cases, it’s much wiser to find a partner to manage your flex office space. At Launch Workplaces, we’ve successfully launched and filled many spaces and we’ve got it down to a science.
If you’re interested in learning about why a managed model might be the best option for you when you’re considering opening a coworking space, you’ll find a ton of resources in our Commercial Landlord’s Guide to Flexible Office Space.