Before opening your own coworking space, ask yourself: why, exactly, do I want to open a coworking space? There are a huge number of answers to this question, but the ones that most inspired me were:
- I love coworking as a lifestyle.
- I want coworking to become my main business; I want to make money and live from it.
- I would like to increase my network of contacts and benefit from more business opportunities.
If you’ve decided to embark on this adventure, I have some tips for you: coworking is a project with social impact. It’s about creating value and managing a community, not about capitalising on the m2 of the space. Most importantly, it’s important to remember that coworking isn’t the business that will make you rich.
The business model
Design and tailor the business model according to your goals and needs. A coworking space must have an innovative business model to ensure it’s sustainable. If you are only focusing on selling memberships, it’s advisable to run it as a complementary activity to your main business or pitch your coworking as a premium space and charge your target market high membership fees for your services.
Some examples of spaces in Barcelona with different business models are:
Kubik is a 900 m2 building which opened in 1994 before the word ‘coworking’ had been created. The founders launched the space with a non-profit business model, instead, they were looking for connections with peers and to increase business opportunities. The whole business model is based on selling memberships or spots on tables.
90% Coworking + 10% Partnerships
Talent Garden is an Italian coworking network across Europe, and they have a space in Barcelona. In Barcelona, 90% of its turnover comes from coworking and the rest from key partnerships. Talent Garden Barcelona benefits from sponsorship from tech companies thanks to its professional network and its huge community of startups. Technological brands invest in the Italian network in order to engage with entrepreneurs and early adopters.
40% Coworking + 40% Events + 10% Partnerships + 10% Other services
Betahaus Barcelona is a 5-floor building with a community over 200 professionals. Its turnover is more diverse: 40% comes from coworking, 40% from events, and the rest from sponsorships and other services that they provide to their community, such as a bar, fablab, and other services. Betahaus is a German network with four spaces in Europe.
50% Events + 40% Bar-Restaurant + 10% Coworking
Valkiria Hub Space is an industrial warehouse over 1000 m2. Its business model is based around events and its restaurant: 50% comes from renting the space to events, 40% comes from its bar-restaurant which is open to the public, whilst only 10% is generated through coworking.
How can I capitalise my coworking space?
Once your business model is defined, it’s time to study and select the services that will help you increase turnover and customer satisfaction.
Market research will help you to work out your target’s needs and habits when contracting a membership. After a year you will be able to gauge which types of memberships work well, and which don’t.
Study the profitability of your coworking plans. Having only fixed members won’t help you to increase your turnover, but if you are reliant on a large number of flex members, you’ll suffer significant falls in revenues and profits during vacation seasons.
Some common coworking plans include: fixed, flexible, weekly, part-time, by day or by the hour, full-time memberships.
You can also offer additional and complementary office services to the coworking community. Whether you charge for these services or you include them in the membership price is your choice. Services can include meeting rooms, a reception and call service, printer and scanner, a fiscal and commercial address, lockers, parking, etc.
Events are a great marketing tool to advertise your coworking space for free and are also a very important tool for community building. Holding events can also be a source of revenue if you rent the space to third parties.
Education and training
If you don’t have any experience in the field, the key is to partner up with a school or company which already organises its courses and has its own networks but needs a physical space. Look out for private schools, academies or online platforms.
You can also organise workshops and courses yourself, but it will take longer for them to become profitable.
A bar or restaurant open to the public could represent your principal economic revenue, and at the same time will attract new coworkers. You will need an additional activity license, however.
The other option is to open a bar exclusively for members. It won’t make the same amount of money but it is sure to become an important area for members and highly valued by the community.
An ‘incubator’ is a mentoring service provided by professional experts to help entrepreneurs and startups to create and develop ideas and projects, and launch successfully into the market. In Spain, this service is relatively uncommon when compared to the European, American, African and Asian coworking markets.
Be creative and provide the services your members will need.
- Project advice: Provide advice to your coworkers on their projects.
- Financing: Help your coworkers to get grants from the government.
- Accounting and fiscal services.
- Co-living: offer accommodation to nomad workers or business travellers.
- Coworking consultancy if you have enough experience.
- Partnerships with suppliers and sponsors: Gym clubs, dance spaces, courier services, bike rental, job centres, etc.
- Other projects: conferences or festivals.
Indicators to measure your profitability
Once your coworking space is up and running, you need to control and measure your business performance. Below are some metrics and indicators to help you:
- The size of your space.
- Occupation rate.
- Incomes per square metre.
- Coworkers per workstations.
- Satisfaction of your coworkers through surveys.
- Does it create synergy?
- Churn rate.
- Intensive and constant financial monitoring of your business.
The following information was taken from the presentation: “Ways to capitalise your coworking space” (in Spanish only). This presentation was given by Vanessa Sans, at the fifth Coworking Spain Conference in Barcelona, Spain.
Picture provided by Betahaus Barcelona.