Coworking isn’t just for freelancers and independent contractors anymore. Entrepreneurs and startups are embracing coworking to maintain low overheads. Even large corporations are adopting the practice to increase employee efficiency, enhance creativity, and create a less stressful environment. All these factors have jacked-up the demand for the limited amount of coworking spaces.
Creating Your Own Coworking Space
Coworking spaces have very informal settings. In fact, you can start one in your own home. A few workspaces, some used office chairs, and a couch — you won’t have that big of a problem when it comes to furnishings. You only need a high-speed Internet connection and air-conditioning or heating to keep your patrons working comfortably. You can have your home listed online, similar to an Airbnb. However, home operations usually have limited space, so don’t expect to rake that much money. To earn big money, you need to invest around $10,000 to $50,000. That money would go to renting a suitably large space (either a building or a warehouse), doing a bit of repair and remodeling, furnishings, buying miscellaneous office supplies, and hiring two to three people for secretarial and maintenance duties. Going at it on your own carries significant risks, but as long as you can operate at over 70 percent capacity, you should be able to recoup your initial investment in around two years.
Partnering with a Brand
Another way to start a coworking space is partnering with an established coworking company. With a coworking franchise, you become part of a network of coworking spaces across the country — each one sharing clients and connections. You get access to corporate accounts that often bring in large amounts of people. Corporate clients will usually rent a set number of workspaces for their employees with contracts that can extend for years. By partnering with an established brand, you will also be giving most of the responsibilities of day-to-day operations to the coworking brand; all you’ll need to do is read the monthly reports and count your profits. Most franchise owners need to do very little once a coworking space begins its operations. You can continue with your career or invest your time and money in another endeavor.
Are Coworking Spaces Profitable?
The answer is yes. Eighty-seven percent of privately-owned coworking spaces are profitable within two years. Coworking spaces in denser locations become profitable sooner as do larger coworking spaces with more than 40-member capacities. Not that coworking spaces with less capacity fail; they just take longer to become profitable. Franchises with high capacities (50+ members) often have the highest chances of success due to their connections to corporate clients and their network of office spaces. Small companies and large corporations are slowly allocating part of their workforce into coworking spaces. This practice has increased the demand for coworking spaces above the available locations.
Coworking spaces will be in demand for the next five to 10 years. As more companies move away from the standard office settings and into coworking spaces, the practice becomes the new standard in office operations.