Opening a coworking space

ZSHOS

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Nov 22, 2016, 4:19:48 PM11/22/16

to Coworking

Hi all- I'm looking to open a coworking space outside of the US (although I'm originally from Atlanta GA) and have a host of questions. I would so appreciate y'alls thoughts on any or all of these questions.

Revenue sources: private office, conference room, designated seats, hot seats, and events.
How do we forecast revenue for these various sources? What kind of blend can we project?
Do you offer daily, weekly memberships in addition to monthly?
What is the recommended ratio of designated seats to hot seats?
What is the recommended square footage per occupant?
What occupancy to seat ratio can we assume for the hot seats?
Are there resources or data that can help us understand the potential market even with other players out there?
What kind of premium are occupants willing to pay for WeWork? At what discount can we offer our location?
How do we determine our membership price point?
Should we offer private offices in addition to designated/hot seats?
Are there other sources of revenue we can tap into when conference room isn't being utilized?
Is there a recommended ratio for cost per square foot to recommended membership pricing?
What ancillary services or offerings are necessary to run a successful workspace?

Tony Bacigalupo

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Nov 23, 2016, 9:56:43 AM11/23/16

to coworking

Hi there,

Welcome to the movement! What's your name and where outside the US? We have lots of folks on here from other locales!

Also, can you tell us a bit more of your backstory? Why are you interested in starting a space?

I'm considering running a "start a coworking space" intensive workshop in January; message me if you'd be interested in discussing.

You can find a lot of answers by:

Searching this forum
Reading everything you can handle on Alex's blog: http://dangerouslyawesome.com
Checking out Ramon's book: http://amzn.to/Rv5Dqb

My quick responses:

Revenue sources: private office, conference room, designated seats, hot seats, and events.

Yes! What's the question?

Every space uses a mix of some or all of these.

For what it's worth, I would say that there are a number of sustainable models for a coworking space–before proceeding make sure you have at least one of these in mind.

I wrote about those options here: http://nwc.co/3/6-exit-strategies-for-coworking-spaces-pick-one-or-one-will-be-picked-for-you/

And, of course, before you do that... build the community!

How do we forecast revenue for these various sources? What kind of blend can we project?

Talk to people. Gauge interest.

Do you offer daily, weekly memberships in addition to monthly?

See what people want when you talk to them about it.

What is the recommended ratio of designated seats to hot seats?

Someone more data-focused on here may have a formula for you.

What is the recommended square footage per occupant?

I always wonder about this question. I know I've heard rough numbers like "80 sq. ft. per person" or "coworking spaces are less than the usual office standard" but I always liked just getting a floor plan out and drawing on it to figure how many desks I could fit.

What occupancy to seat ratio can we assume for the hot seats?

I've found it to be fairly high, maybe 80% or so. So something like 1.2-1.3 people to 1 seat.

Are there resources or data that can help us understand the potential market even with other players out there?

http://deskmag.com

http://emergentresearch.com/

What kind of premium are occupants willing to pay for WeWork? At what discount can we offer our location?

Don't care. WeWork will always have zillions more than you and all of us, and so will their #2 and #3 competitors who are raising zillions more as we speak. So oftentimes these kinds of players will undercut "market price" to muscle out their "competitors."

Don't compete on price. Compete on being awesome and doing something super impactful that will truly help people feel a deep sense of belonging and camaraderie.

Coworking is honestly not that exciting to a lot of people anymore on its own.

Steve King of Emergent Research has said that coworking is currently accessing only 2% of the potential market.

That means 98% of the potential members of coworking spaces are sitting on the sidelines. Why? Because shelling out $300+ per month for a place to get online isn't a compelling value proposition.

So think about how you can approach that in a way that the rubber stamp workspaces aren't.

The approach I am liking is one that emphasizes lots of great community-led programming, paired with a low price point for the entry-level membership. It's easy to charge a small amount if people aren't occupying a desk every day in your space and only coming in for occasional meetings.

That's something you can sell to hundreds of people.

How do we determine our membership price point?

Survey what you're seeing elsewhere for a vibe.

But more importantly, ask the people you're able to find in your initial community-building efforts.

Should we offer private offices in addition to designated/hot seats?

I know I'm going to sound like a broken record, but... ask the people you talk to :-)

Generally, a mix of some private offices with shared space seems to tend to work well, but you can do it any way you can imagine.

Are there other sources of revenue we can tap into when conference room isn't being utilized?

Perhaps see if it's eligible to be registered on Breather?

Is there a recommended ratio for cost per square foot to recommended membership pricing?

Not my department; hopefully someone else here can answer.

I have something along these lines in some of the business model documents I have, but it would take tome digging to get at it.

What ancillary services or offerings are necessary to run a successful workspace?

It really depends on what kind of a thing you're looking to create.

I've seen coworking happening successfully in dead silence and cacophany, in enormous buildings and tiny holes in the wall, with 3D printers and with nothing but wi-fi.

You see the common thread in a bunch of my responses above, so I'll use that thread to tie it together: Don't just build a common template coworking space.

LOTS of people are trying to do that right now, and many of them are struggling as a result.

Find an angle. Find something unique and special. Talk to your would-be members and when you've got a list of ten people who are so "hell yes" about the idea that they're willing to show up and help make it happen, then you're onto something.

Best of luck and keep us posted on how it goes!

Cheers,

Tony

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Jeannine van der Linden

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Dec 5, 2016, 3:35:59 AM12/5/16

to Coworking

Wait. Hold the phone. They let somebody who is actually from Atlanta escape? Pretty sure that's not allowed, I think you need to check into City Hall right away.