So you’re thinking about opening a new coworking space. That’s great! You’ve probably thought about what it will look like, and what your goals are, but have you put together your business plan yet? You can’t just copy-paste a plan from a different industry, you’ll need to understand what makes coworking unique and how you can leverage your skills and advantages to stand out.
This is a part of our Coworking First Steps series, a collection of resources designed to help new coworking spaces find their footing.
Why A Business Plan?
A business plan is an essential document for any new business. You need a guiding document that can focus your team, your effort, and your financials.
Regardless of whether you want to focus on freelancers or corporates, look for investors or self-fund, you need a document that will focus your efforts and help you stay on-track for your goal. A business plan is your road map to a successful coworking or flexible workspace. An important note to keep in mind is “successful” is not the same as “profitable.”
The business plan can be as formal or informal as you like (depending on who you’ll be showing it to), but it should include some key pieces of information. What pieces of information depend on a number of factors, but there’s no better place to start than by looking at business plans from established coworking spaces. Some that we can recommend are:
A business plan does not have a required structure or length, so don’t fixate on getting the right wordcount. Instead, fixate on getting the boiled down, essential information with all the supporting details, outlines, and vision to make it sing. Before you start writing a 200 page business plan, we’d recommend that you check with the recipient to see if that’s what they’re expecting!
Some common elements to include in a business plan are:
What is a coworking space? What problems are you trying to solve? What is special about your coworking space? Where will the money come from — what amount of your income will come from memberships, events, or recurring services? Don’t expect the reader to bring in outside information, sell them on why your idea stands out.
How is coworking growing in your country and area? Do you have any growth data? Getting in touch with other coworking space managers in your region is a good idea. Alternatively, you can always check the Google and LinkedIn coworking groups and check for old threads or better yet, ask the question yourself! There is an annual coworking survey done by Deskmag which is an excellent place to find information about growth.
Where will the space be? What makes this location great? What else is in the area? What is the demographic of people in this area? The more specific you can get, the better, but leave yourself room in case things change.
Are there other coworking spaces in the area? Are there other open work cafes or business centres close by? What makes your space a better option and what is your competitive advantage? Be honest — you don’t want to downplay your competitors, you want to demonstrate your deep knowledge of their operations.
Who is your target customer? How many of these customers are there in your area and how will you attract them? Where are your future customers currently working? How can you help them achieve their goals?
How will you reach your potential customers?
Think through a few steps:
- What is your main message?
- Who are you trying to reach and what do you have to offer them?
- What channels are you going to use?
- How do you convert someone who’s interested in your space into a recurring member?
How will you manage the space? This is the place to dive into the functions of your space. How much staff will you need? What are your opening hours going to be. How will you manage access? How many desks are allocated to flex members? It’s important to show that you have thought of all the little details and have a thorough understanding of what it will take to operate your space.
How much money do you already have to get started? How much money do you need to get started and how will you spend it? Where and how will you find the rest of the capital needed to start your coworking space? How will you return in? When do you expect to start being profitable? How much money do you think you will make each month? What can go wrong? What is your exit strategy?
Some of this will be guesswork, but you should be as realistic and data/numbers focused as you can be.
This section is especially important if you are looking for funding.
Check out our full collection of resources for starting up a coworking business. You can also read our blog and follow us on Twitter, Facebook or Instagram for more tips and news around coworking space management. You have additional questions or feedback? Suggest new topics at firstname.lastname@example.org.