What makes a coworking space successful?
Open coworking space - how you can set up your own business as a coworking provider
The world of work is changing: a lot is becoming digital, many jobs are now being done by freelancers and self-employed, and more and more people are daring the leap into self-employment with a promising idea. The changed world of work also requires a changed work infrastructure: the need for flexibly usable work areas for founders, freelancers, digital nomads and locally outsourced company departments at short notice are more sought after than ever before. Exactly the kind of space that coworking spaces offer. Is self-employment with a coworking space therefore a sure-fire success where nothing can go wrong? Not at all - there are a few things you have to pay attention to. We'll explain what these are in our article.
Open a coworking space - rethink the three important models in advance
In order for your coworking space to be a success, you need to be clear on three essential points. You need:
- an operator model
- a business model
- and a design model.
And you need a lot of motivation. Think about the following questions:
- WHY? What drives me
- WHAT? What goals do I want to achieve?
- HOW? What is my space? What is my work like there? Do I live the community approach - that is, connecting people, supporting work processes, offering them service, acting as a service provider?
1. The operator model for your space
The organization of your day-to-day business can be found in your operator model, from administration to community management. What rental contracts are there, what requirements does a modern office have in terms of telephone and IT, do I want to rent out on a short-term or monthly basis? Which legal form is the right one for me, how do you clarify the liability risk? All questions that you should clarify.
Just as important: Which services do you need, which infrastructure must be available? Should there be meeting / community areas with coffee, tea and beer for get-togethers and exchanges? Do you increasingly rent to individual founders, or rather to corporates and companies?
How is your personnel concept? Do you have a community manager, is there a front desk?
The absolutely most important factor in your coworking space is the property that you want to use. Sure, it's easiest if you already own or have the money to buy a property. But that will rarely work - especially where coworking spaces can work well, it is rather expensive on the real estate market. The following ways of opening a coworking space are conceivable.
Activate unused office space
Owners are usually interested in the revitalization of existing properties ... accordingly there could be good potential for you to find cool old buildings for your project. But make sure that you have planning security when renting, even in the event of success!
Best location - big investment
In particular, a customer group that is focused on sustainability and shared economy wants an office in a central location ... here they can be easily reached by public transport.
Discover new spaces
The conversion and temporary use of large garages, warehouses and factories is also a worthwhile approach ... Here you should expect a lot of investment, at least in terms of time and manpower. But also with cheap rents.
If you know how the coworking space should work in principle, then you have to set up a business model ...
2. The design model for the coworking space: location, rooms, furnishings & atmosphere
Sometimes it is also fundamentally an approach to have a complete package for office equipment put together, for which there are specialized providers.
The very first and most important question concerns the location of your coworking space.
- Which areas do you have to choose from?
- How much rent do you have to pay?
- How many jobs do you have there?
- Which monthly costs do you have to be able to generate with it (per planned workplace)?
- And of course the fundamental question: Does the landlord even agree that a coworking space should not be built on the space?
- What are the requirements for the company? This concerns the feasibility, the cost side and the possible profitability for certain areas.
Then you have to ask yourself for every space offered:
- What about the accessibility?
- What parking options are there in the area?
- Can you possibly also rent or sublet parking spaces at low cost?
- How good is the connection to public transport, how far are you from important points (universities, train stations, start-up and technology centers, etc.) with your planned coworking space?
Know your target group!
A very basic requirement for every business is even more important for coworking spaces: “Know your target group”.
- Who should work in your coworking space?
- Where do these people come from (locally)?
- What special needs may there be?
If you don't know where your destination port is, no wind is favorable for you. I mean: if you have no idea who you are focusing on as a target group, but simply offer your coworking space as a workplace to everyone who needs one, you will find it extremely difficult both with marketing - and hardly a really convincing coworking space to line up. There is no such thing as “optimal for everyone”.
The fundamental decision is therefore made in conjunction with your planned target group, their local occurrence and the areas offered to you. Only if both go together will the whole thing be a success in the end - and you won't have to struggle with the workload again and again.
You should collect all the facts in your business plan. Writing the business plan is easier with helpful software that guides you through the individual points. We have tested the best business plan tools for you: To the TOP 5 business plan tools »
Equipment, corporate identity & design: desks, internet and office chairs are not enough
This - admittedly quite banal - concept is only suitable for the mass market: For places where you can expect a high number of founders and at the same time have little competition. If you then squeeze many desks onto the space and focus above all on the masses, you will probably be able to earn a lot of money in the short term - at least until others recognize the potential in this place and your users gradually become better and for them migrate to more optimally designed spaces.
Then the business model is done. Doing what everyone does - namely offering a table and chair - is not enough for a successful business here either.
You need a unique selling point, a so-called USP (Unique Selling Proposition) and you have to do something better that is important to your customers - ideally something that you are the only one to do. In doing so, you should always orient yourself towards real customer needs and expectations - a USP only has value if it also has value for your customers. Here are two examples from Mallorca that make it clear what a good and what a less good USP is.
Example 1: Your own island house becomes a coworking space
On the one hand, there is an operator who quickly converted his entire house into a working and living space on Mallorca. From 500 euros a month you can get a bed in an eight-bed room and a FixDesk. Nicely furnished single rooms are available from 750 euros per month - also including the coworking fixed desk. Double rooms are available from 900 euros per month. Hardly anyone in Palma de Mallorca can live and work so cheaply. Of course, you can also book your room and table by the day or by the week. The coworking space is located in a quiet area of the capital Palma, the nearest beach is just a few minutes away.
Example 2: Quiet coworking on the edge of the island
The other provider is very proud of himself because he speaks German and has emigrated from Germany. The coworking space is located in a rather quiet place on the island, with a view over the sea. The accommodation options in the area are rather poor and geared towards local tourists. Because of the “German-speaking support”, this coworking space costs twice as much as any Mallorcan coworking space in the middle of the capital Palma.
Pros and cons of the two offers
Of course, each of them has their own USP - which is basically a good thing. The question here is which USP attracts the expected customers better - and is perceived by them as more valuable. I think with these two examples you can easily answer the question yourself.
The space concept: What is your target group doing in the coworking space?
That seems like a nonsensical question at first - it is one of the most important questions of all. In a coworking space you can do very different things: work in silence, let your gaze wander out of the window and find creative solutions to problems, talk to others or discuss difficulties, ask someone who is knowledgeable for advice (such as the self-employed online Marketing specialist at the next table) Make contacts, make phone calls and conduct customer acquisition, hold meetings and conferences, hold presentations and invite potential customers or investors to have lunch with a multitude of receipts on the table, finally tackle your bookkeeping.
Not all of these things get along when they happen side by side. While one is desperately trying to convince a customer of his services on the phone, the other can hardly look out the window and think in peace. Even in the rarest of cases, you are able to provide everyone with a suitable (alternative) space for their type of activity. Then you end up with more ancillary space than space for desks.
Quite a few coworking operators then answer the question evasively by referring to a single meeting room or to a certain required adaptability of the users, since it is an “open-plan office”. You can do that - but whether it is very user-friendly and user-friendly is another matter. For this reason, you absolutely have to know your customers - and create really useful solutions for them as specifically as possible according to their needs.
The plus in the coworking space: Also think about the work-life balance
Not everything in a coworking space is work: communication - in person or on the phone - is also very important. And users usually also spend their breaks in the coworking space. For this, an environment should already be available in which work breaks can be made pleasant and relaxing. For knowledge workers, breaks make up at least a quarter to a third of the total working time in most cases (at least according to one study). The area that you have to plan for break and relaxation rooms will then also be missing for the desks later - so keep this in mind when making your calculations. Break and relaxation should be possible either in peace, with something to eat or in conversation with others. That makes certain complex demands on the interior design.
Create spaces for special requirements
In individual cases, this can be the reason for the enormous popularity and high success. It doesn't hurt if you think a little outside the box. There are hardly any “Skype booths” in almost every space in Spain in this country, for example - but, like creatively designed and soundproof telephone boxes, they are a very good way of ensuring that one-to-one or three-way calls remain confidential and that calls do not disturb anyone else.
Target group parents
The additional offer of possible childcare would be a very interesting unique selling point, for example - if there is a need for it.
Further training and seminars in the coworking space
Many coworking spaces already offer offers for further training and advice “in-house” - but you have to take a very careful look at what offers you are making and what costs you spend on them.
Balance with yoga and co.
Ergonomics is important - so is movement. While ergonomic workplaces already help to maintain health in one case, there is still room for improvement on the other. A small fitness studio, a few courses, guided activities or trial offers will certainly suit one or the other user in order not to neglect the necessary amount of exercise in addition to the workload. In addition, you get your users to spend more time in the space, which binds them more and more long-term to your space and often makes additional sources of income possible.
It is about the famous P / PC balance sheet - loosely based on Stephen Covey - that is, the balanced relationship between productivity and productive capacity. Incidentally, you could also make that a topic for yourself in Space. For most founders and freelancers, the balance in this relationship is not exactly the best.
Coworking space: a place to live
Overnight accommodations can be a good way to establish a USP, especially if the space is in places with high tourist traffic. Digital nomads appreciate something like this enormously - and usually like to use the options offered if they are within a suitable price range. A good example here is the “Unperfekthaus” in Essen, where you can not only rent apartments at the same time, but anyone who brings their sleeping bag can also spend the night in a trailer for just 6 euros.
However, it is of course important to always first determine the specific need for certain services. A very good possibility for this is to start a conversation with the planned target group in advance and to pick up ideas and suggestions and incorporate them into your own concept.
The business plan: the successful business model for your coworking space
In addition to the design side, there is an economic and a computational side. Of course, this also has to be right and the bill has to pay off - even with lower utilization and less operation, for example in the summer months. And of course there has to be enough people who want to and are able to pay the prices determined in this way. On the financial side, you should definitely know your fixed costs - i.e. the costs that you have to pay for rent, operating costs, cleaning, insurance and internet connection in your space in any case and every month. Every space has a certain minimum load that must be given in order to even cover costs. If you want to make a living from your space at the same time, you shouldn't rely too much on reserves for bad times - because times of low utilization can certainly persist. In addition, always take into account operating and maintenance costs, a repair reserve and an ongoing marketing budget.
These costs are often not taken into account in the planning - in an emergency, however, in the event of unforeseen incidents, this can take on considerable proportions. The money for solving the difficulties should then be available as far as possible without getting into financial difficulties. Planning is - admittedly - not that easy, especially because it is often difficult to estimate the future utilization. But be more conservative in your planning and your occupancy forecasts - this way you are definitely on the safe side and more immune to unpleasant surprises.
There is definitely a need for coworking spaces - so the chances of success with a solid calculation and a clear USP adapted to the target group are good - also in order to be able to make a living from it. But coworking spaces have to close again and again because in the end they are no longer profitable - the business with “chair-table-internet connection” is not a sure-fire success. It is a business like any other that requires careful consideration and planning in advance and a very customer-oriented approach. You should always keep this in mind when planning.
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