coworking office business plan

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Business Plan Checklist for Your Coworking Space

The coworking industry is becoming a lucrative worldwide phenomenon , and now is the perfect time to break into the business. And as COVID-19 induced lockdowns and social distancing hopefully become a thing of the past, remote workers will be looking to find ways to connect with like-minded individuals now more than ever. A coworking space is a perfect place to do that!

Below, we've put together a step-by-step checklist to help you envision, assemble, and scale your own unique space. Whether you're brand new to the industry or you already know the ropes, you can use these tips to improve efficiency, define your brand and strengthen your space's community.

Looking for our full coworking space business plan?

We offer a comprehensive guide to operating a coworking space. Download it free here .

1. Define Your Vision

Why do you want to open the new space? To make a living? To cross-finance your own startup? To create a national coworking chain? To help your local community?

All are valid answers, but this important first step will help define your entire strategy. You will have to adapt your strategy over time, but your vision should stay intact to make sure your brand is consistent and your members feel valued. Take WeWork for example. Their initial vision — to create spaces for people to come together and innovate — still hasn't changed, even as their business has scaled up .

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2. Solve a Specific Problem

There needs to be a niche for your new coworking business, and thankfully there are plenty of options available. Maybe your area has a high demand for coworking spaces beyond coffee shops and libraries. Maybe the existing spaces in your area are too focused on one type of worker. On the other hand, maybe the other spaces around you are too broadly focused.

You're now in the business of problem-solving, so starting with a focus and expanding from there should be your main goal. For example, Google started out as a simple search engine that used links to determine the importance of individual pages on the internet. Today, they still dominate their niche, but they also offer dozens of services on top of that: Think products and services include mail, calendars, maps, and even phones. To create something bigger, you need to begin with one small thing. Start by analyzing your competitors and conducting a competitive analysis .

3. Define Your Space

Envision your target market's dream coworking environment . Is your space a premium facility for companies or an affordable solution for freelancers? Is your primary audience big business or small teams? Will your facility integrate with your city's business environment through events and partnerships, or will it be an independent space open to anyone?

Answering these questions will help you more easily plan out your membership pricing, amenities, marketing, and location. Being generic doesn’t cut it in the coworking market. Think deeply about how to stand out against the rest and add value to your new space.

4. List Your Business Goals

This is the tough work that will help you the most in the long run. If your space is fully leased, plan out the number of desks you can offer and monetize. Shoot for using 30 to 40 percent of your total space as desk space. Then, use this figure to calculate how much revenue your space can generate, including comparing the number of hot desks against the number of permanent desks.

Start to formulate a financial plan for your vision. Use our very own free financial ramp-up calculator to get started. The next step is to think about goals further down the line. When will you break even? How much revenue will you generate? How much turnover do you expect? Which amenities and cosmetic choices can you afford?

Now think about the investment you'll need. This includes set up costs, like furniture and internet service; opening costs, like a launch event; and ongoing operations, like maintenance and salaries. There are more costs than you might initially imagine, so research more with coworking guru Alex Hillman's online guide .

Additionally, you should define your value proposition, cost structure, revenue streams, customer segments, key channels, and marketing strategy. You'll need to know these answers inside and out.

5. Pick Your Team

Every great business starts with a great team . Consider every side of the plan: a technology expert, an operations manager, and a marketing person are essential, whether you hire them, do those jobs yourself, or outsource to freelancers.

Similarly, you’ll need to look into real estate partners, investors, and other day-to-day employees to round out your core group. A solid team will increase your space's value and pave the way for future growth.

6. Coworking Business Model

What is your unique selling point what value do you bring.

Do you offer lots of space for large teams to rent out, or individual desks to pay for by the hour? Do you offer bare-bones facilities like wifi and a seat at a desk, or cold brew on tap and gym access? You should always aim to offer the work necessities that aren’t available in free spaces like coffee shops: printers, reliable high-speed internet, writing utensils, scanners, and other office supplies. You may want to cater to a specific industry, like offering a space where entrepreneurs can network and bounce ideas off of each other. Are you geared towards providing networking opportunities, or a quiet space for optimal productivity? Or do you cater to bigger clients who want more private meeting spaces or long-term rentals? The answers to all of these questions will begin to define how you sell your space.

Who is your audience?

Are you catering to individuals, businesses, or both? How will you accommodate those who will stop in sporadically versus members who need a steady 9-5 workspace? Will you lease specific desks and offices or just grant people entry as needed? Are there entire floors that companies can rent out, or private meeting spaces for remote teams? Or maybe you don’t exist in a physical place but are more of a club? These parameters will help you think about what type of space you should occupy.

If you’re offering a space primarily for people to meet outside of the usual 9-5, maybe you operate out of a building that is in use only outside of normal business hours, like a restaurant or church. If you’re catering more to the 9-5 crowd, think about how you can utilize your space outside of business hours. Perhaps you’ll host nighttime events like book readings or networking cocktail hours. Maybe you’ll cater to parents by offering childcare or irregular hours.

What are your revenue streams?

Most revenue will come from membership fees, but those can take several forms. You can have members pay monthly or annually, or charge hourly for the use of workspace. You can offer both hot desks, which can be rented out for specific times, and dedicated desks, where a member can leave their things and return at their leisure. A mix of both will ensure you’re filled to maximum capacity. Also consider offering corporate memberships, which can be a great way to get tons of people in the door and allow companies to extend perks to remote teams.

You can also bring in revenue through amenities like a cafe, and build different levels of membership based on these smaller perks. For example, a higher-tier member might get unlimited coffee, free guests, or free access to events.

Another popular revenue stream for coworking space is something called a “virtual office,” in which startups or remote teams pay for a business address where they can send and receive packages, even while working from a different place, like their homes.

What are your marketing strategies?

A good marketing strategy is key to getting your coworking space off the ground. It’s also highly connected with who your audience is. You may run advertisements on local news or in niche magazines that cater to your audience. You should definitely have an attractive website and a strong social media presence. Many places find success in offering perks to existing members for referring friends.

Try and get creative! Can you work with influencers that your audience might follow? Should you have a booth at industry fairs, or offer freebies to those passing by at a local farmers market or on a busy street?

What partnerships can you form?

To get off the ground, many coworking spaces rely on investors. They provide an initial revenue stream and source of capital, plus they provide a networking tool that can be sold to members. If your coworking space hosts a number of entrepreneurs or start-ups, you may want to consider offering to connect them with your investor for a small fee.

Think about smaller-scale partnerships as well, such as different local businesses and entrepreneurs you can collaborate with. Perhaps a local coffee shop would be interested in opening a cafe in your space, or a local restaurant could offer customers special discounts. You could offer members discounts at a nearby gym, or host instructors for fitness classes right in your coworking space.

If you plan on hosting events, begin to compile a shortlist of people who would make a good fit. Are there local entrepreneurs who could give an inspiring talk, or authors who might draw a crowd? Perhaps artists would be interested in having their work on display, or a local library could sponsor a small lending library in your space.

7. Coworking Business Model Template

There are tons of helpful coworking business model canvases out there that are helpful to estimate your startup costs, brainstorm partnerships, cater towards your target audience, and build your business. You can save this checklist, as well, to help you start planning your space.

Target Audience : Who is your dream client? Who do you wish to attract?

Partners: Will you be looking for investors? Who will be your internet service provider? Will you partner with local businesses, or bring in local experts for events?

Added Value: What’s your selling point? A quiet space for remote workers to use instead of a home office? Networking opportunities? Speakers and events?

Key Resources: What do you need to be successful? An entire building or just an open floor? Wifi? Cold brew? Fax machines?

Advertising: How will you spread the word? Through local businesses, social media, billboards, or word of mouth?

Key Activities: What will your space be used for? Workspace for startups? Collaboration for entrepreneurs? Events open to the whole community?

Revenue Streams: Will membership fees be fixed or will there be different plans? Will you recruit investors? How many hot desks versus conference rooms? Will you charge a fee for events?

Customer Segments : What different customers do you hope to attract? Freelancers? Remote workers? Entire companies?

Download this Coworking Space Business Model Canvas today and start planning!

Remember: This is a broad overview. While these are some of the main questions you'll need to address when shaping your business plan, there will be plenty of other things to evaluate more in-depth. We've collected a more extensive overview of how to launch and run a coworking space in 2021 with our updated guide, which you can download for free .

And get excited! Coworking is showing signs of massive growth, and this is your chance to improve the world of business while setting yourself up for success.

Carlo Belloni

Carlo is the Project Manager and SEO Specialist at Kisi.

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Coworking Space Business Plan Template

Written by Dave Lavinsky

Coworking Space Business Plan

Over the past 20+ years, we have helped over 500 entrepreneurs and business owners create business plans to start and grow their coworking space companies.

If you’re unfamiliar with creating a coworking space business plan, you may think creating one will be a time-consuming and frustrating process. For most entrepreneurs it is, but for you, it won’t be since we’re here to help. We have the experience, resources, and knowledge to help you create a great business plan.

In this article, you will learn some background information on why business planning is important. Then, you will learn how to write a coworking space business plan step-by-step so you can create your plan today.

Download our Ultimate Business Plan Template here >

What Is a Business Plan?

A business plan provides a snapshot of your coworking space business as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategies for reaching them. It also includes market research to support your plans.  

Why You Need a Business Plan

If you’re looking to start a coworking space business or grow your existing coworking space company, you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your coworking space business to improve your chances of success. Your coworking space business plan is a living document that should be updated annually as your company grows and changes.  

Sources of Funding for Coworking Space Businesses

With regards to funding, the main sources of funding for a coworking space business are personal savings, credit cards, bank loans, and angel investors. When it comes to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to ensure that your financials are reasonable, but they will also want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business. Personal savings and bank loans are the most common funding paths for coworking space companies.

How to Write a Business Plan for a Coworking Space Business

If you want to start a coworking space business or expand your current one, you need a business plan. The guide below details the necessary information for how to write each essential component of your coworking space business plan.  

Executive Summary

Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.

The goal of your executive summary is to quickly engage the reader. Explain to them the kind of coworking space business you are running and the status. For example, are you a startup, do you have a coworking space business that you would like to grow, or are you operating a chain of coworking space businesses?

Next, provide an overview of each of the subsequent sections of your plan.

• Give a brief overview of the coworking space industry.
• Discuss the type of coworking space business you are operating.
• Detail your direct competitors. Give an overview of your target customers.
• Provide a snapshot of your marketing strategy. Identify the key members of your team.
• Offer an overview of your financial plan.

Company Overview

In your company overview, you will detail the type of coworking space business you are operating.

For example, you might specialize in one of the following types of coworking space businesses:

• Industry specialized coworking space: This type of coworking space caters to workers and entrepreneurs in a specific industry such as graphic designers, digital media professionals, or writers.
• Business incubator: This type of coworking space is specifically for startups and entrepreneurs to work on new business ventures in a supportive environment.
• Private coworking space: This type of coworking space is usually rented out by a single company.
• Open coworking space: This is the most common type of coworking space, where anyone can rent a desk or a room for a fee.

In addition to explaining the type of coworking space business you will operate, the company overview needs to provide background on the business.

Include answers to questions such as:

• When and why did you start the business?
• What milestones have you achieved to date? Milestones could include the number of clients served, the number of companies served, reaching $X amount in revenue, etc.
• Your legal business Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.

Industry Analysis

In your industry or market analysis, you need to provide an overview of the coworking space industry.

While this may seem unnecessary, it serves multiple purposes.

First, researching the coworking space industry educates you. It helps you understand the market in which you are operating.

Secondly, market research can improve your marketing strategy, particularly if your analysis identifies market trends.

The third reason is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.

The following questions should be answered in the industry analysis section of your coworking space business plan:

• How big is the coworking space industry (in dollars)?
• Is the market declining or increasing?
• Who are the key competitors in the market?
• Who are the key suppliers in the market?
• What trends are affecting the industry?
• What is the industry’s growth forecast over the next 5 – 10 years?
• What is the relevant market size? That is, how big is the potential target market for your coworking space business? You can extrapolate such a figure by assessing the size of the market in the entire country and then applying that figure to your local population.

Customer Analysis

The customer analysis section of your coworking space business plan must detail the customers you serve and/or expect to serve.

The following are examples of customer segments: individuals, schools, families, and corporations.

As you can imagine, the customer segment(s) you choose will have a great impact on the type of coworking space business you operate. Clearly, individuals would respond to different marketing promotions than corporations, for example.

Try to break out your target customers in terms of their demographic and psychographic profiles. With regards to demographics, including a discussion of the ages, genders, locations, and income levels of the potential customers you seek to serve.

Psychographic profiles explain the wants and needs of your target customers. The more you can recognize and define these needs, the better you will do in attracting and retaining your customers.  

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Competitive Analysis

Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.

Direct competitors are other coworking space businesses.

Indirect competitors are other options that customers have to purchase from that aren’t directly competing with your product or service. This includes other places people gather to work, such as conference rooms, libraries, and coffee shops. You need to mention such competition as well.

For each such competitor, provide an overview of their business and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as

• What types of customers do they serve?
• What type of coworking space business are they?
• What is their pricing (premium, low, etc.)?
• What are they good at?
• What are their weaknesses?

With regards to the last two questions, think about your answers from the customers’ perspective. And don’t be afraid to ask your competitors’ customers what they like most and least about them.

The final part of your competitive analysis section is to document your areas of competitive advantage. For example:

• Will you make it easier for your clients to acquire your services?
• Will you offer products or services that your competition doesn’t?
• Will you provide better customer service?
• Will you offer better pricing?

Think about ways you will outperform your competition and document them in this section of your plan.  

Marketing Plan

Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For a coworking space business plan, your marketing strategy should include the following:

Product : In the product section, you should reiterate the type of coworking space company that you documented in your company overview. Then, detail the specific products or services you will be offering. For example, will you provide food and beverages, hot desks, conference rooms, or fitness rooms?

Price : Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of your plan, you are presenting the services you offer and their prices.

Place : Place refers to the site of your coworking space company. Document where your company is situated and mention how the site will impact your success. For example, is your coworking space business located in a busy retail district, a business district, or a standalone office? Discuss how your site might be the ideal location for your customers.

Promotions : The final part of your coworking space marketing plan is where you will document how you will drive potential customers to your location(s). The following are some promotional methods you might consider:

• Advertise in local papers, radio stations and/or magazines
• Reach out to websites
• Distribute flyers
• Engage in email marketing
• Advertise on social media platforms
• Improve the SEO (search engine optimization) on your website for targeted keywords

Operations Plan

While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.

Everyday short-term processes include all of the tasks involved in running your coworking space business, including answering calls, scheduling cleaning services for the coworking space, ordering office supplies, and collecting payments from clients, etc.

Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to book your Xth client, or when you hope to reach $X in revenue. It could also be when you expect to expand your coworking space business to a new city.  

Management Team

To demonstrate your coworking space business’ potential to succeed, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company.

Ideally, you and/or your team members have direct experience in managing coworking space businesses. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.

If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act as mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in managing a coworking space business or successfully running a small venture incubator.  

Financial Plan

Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet, and cash flow statements.

Income Statement

An income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenue and then subtracts your costs to show whether you turned a profit or not.

In developing your income statement, you need to devise assumptions. For example, will your coworking space have 20 desks, and will you charge $20 per day/per desk? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.

Balance Sheets

Balance sheets show your assets and liabilities. While balance sheets can include much information, try to simplify them to the key items you need to know about. For instance, if you spend $50,000 on building out your coworking space business, this will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a lender writes you a check for $50,000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.

Cash Flow Statement

Your cash flow statement will help determine how much money you need to start or grow your business, and ensure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt.

When creating your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a coworking space business:

• Cost of equipment and office supplies
• Payroll or salaries paid to staff
• Business insurance
• Other start-up expenses (if you’re a new business) like legal expenses, permits, computer software, and equipment

Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your office location lease or testimonials from happy customers.  

Writing a business plan for your coworking space is a worthwhile endeavor. If you follow the template above, by the time you are done, you will have an expert coworking space business plan; download it to PDF to show banks and investors. You will understand the coworking space industry, your competition, and your customers. You will develop a marketing strategy and will understand what it takes to launch and grow a successful coworking space business.  

Coworking Space Business Plan FAQs

What is the easiest way to complete my coworking space business plan.

Growthink's Ultimate Business Plan Template allows you to quickly and easily write your coworking space business plan.

How Do You Start a Coworking Space Business?

Starting a coworking space business is easy with these 14 steps:

• Choose the Name for Your Coworking Space Business
• Create Your Coworking Space Business Plan
• Choose the Legal Structure for Your Coworking Space Business
• Secure Startup Funding for Coworking Space Business (If Needed)
• Secure a Location for Your Business
• Register Your Coworking Space Business with the IRS
• Open a Business Bank Account
• Get a Business Credit Card
• Get the Required Business Licenses and Permits
• Get Business Insurance for Your Coworking Space Business
• Buy or Lease the Right Coworking Space Business Equipment
• Develop Your Coworking Space Business Marketing Materials
• Purchase and Setup the Software Needed to Run Your Coworking Space Business
• Open for Business

Don’t you wish there was a faster, easier way to finish your Coworking Space business plan?

OR, Let Us Develop Your Plan For You

Since 1999, Growthink has developed business plans for thousands of companies who have gone on to achieve tremendous success.

Click here to see how a Growthink business planning consultant can create your business plan for you.  

Other Helpful Business Plan Articles & Templates

Coworking Space Business Plan Template

Written by Dave Lavinsky

Coworking Space Business Plan

You’ve come to the right place to create your Coworking Space business plan.

We have helped over 1,000 entrepreneurs and business owners create business plans and many have used them to start or grow their Coworking Space companies.

Below is a template to help you create each section of your Coworking Space business plan.

Executive Summary

Business overview.

Work Together is a new coworking space located in Las Vegas, Nevada. The space will provide a comfortable and clean setting for professionals of all industries to work in. Professionals who are interested in renting our offices can rent a private office, conference room, or a shared space depending on their needs. They can also rent offices by the day or at a monthly rate. No matter the type of office they rent or the length of their lease, all of our clients are guaranteed a clean, respectful, and professional setting for them to work in.

Work Together is led and founded by Dustin James. Dustin has been a commercial broker for ten years, and has seen an increasing demand in flexible coworking spaces. Since this is an increasing need in a world that is offering more remote and flexible working options, Dustin has decided to specialize in leasing coworking spaces to meet the working needs of the professionals and entrepreneurs of the Las Vegas area.

Product Offering

Work Together provides several offices for professionals to work in. Clients who are interested in renting our offices, can rent private offices, conference rooms, or shared spaces. They can also rent these spaces at a daily rate or monthly rate, depending on their needs.

Customer Focus

The clients of Work Together are typically business owners, investors, business executives, and realtors seeking flexible work spaces. Some clients will just need space for themselves, while others will need space for a small team of up to 15 people. Work Together will offer a variety of office space options to satisfy this diverse demographic.

Management Team

Work Together is led and founded by Dustin James. Dustin has been a commercial broker for ten years, and has seen an increasing demand in flexible coworking spaces. Since this is an increasing need in a world that is offering more remote and flexible working options, Dustin has decided to specialize in leasing coworking spaces to meet the working needs of the professionals and entrepreneurs of the Las Vegas area. His experience in the real estate industry and his connections to local leaders will ensure Work Together’s success.

Success Factors

Work Together will be able to achieve success by offering the following competitive advantages:

• Location: Work Together’s location is near the center of town and is convenient to access for all commuters and nearby residents. It’s visible from the street with many working professionals walking to and from work on a daily basis, giving passersby a direct look at our offices.
• Client-oriented service: Work Together will have a full-time assistant to primarily keep in contact with clients and answer their everyday questions.
• Management: Dustin has been extremely successful working in the real estate sector and will be able to use his previous experience to better assist his clients. His unique qualifications will serve customers in a much more sophisticated manner than Work Together’s competitors.
• Relationships: Having lived in the community for 25 years, Dustin knows many of the local leaders, newspapers and other influences. Furthermore, he will be able to draw from his ties to the community in order to build up a list of loyal and satisfied clients.

Financial Highlights

Work Together is currently seeking $500,000 to launch. The capital will be used for funding capital expenditures and location build-out, hiring initial employees, and working capital. Specifically, these funds will be used as follows:

• Office Design/Build: $200,000
• Marketing and Advertising: $50,000
• Inventory and Supplies: $50,000
• Three Months Of Overhead Expenses (Rent, Salaries, Utilities): $100,000
• Working Capital: $100,000

The following graph outlines the pro forma financial projections for Work Together.

Company Overview

Who is work together.

  Work Together is led and founded by Dustin James. Dustin has been a commercial broker for ten years, and has seen an increasing demand in flexible coworking spaces. Since this is an increasing need in a world that is offering more remote and flexible working options, Dustin has decided to specialize in leasing coworking spaces to meet the working needs of the professionals and entrepreneurs of the Las Vegas area.

Work Together History

Dustin incorporated Work Together as an S-Corporation on May 1st, 2023. The company is currently being run out of Dustin’s home office but will move to a commercial location once the lease has been finalized. Dustin has also identified several office locations to lease and turn into coworking spaces.

Since incorporation, Work Together has achieved the following milestones:

• Found a location for the main office and signed a letter of intent to lease it.
• Developed the company’s branding image, social media, and website.
• Began recruiting key staff.

Work Together Services

Industry analysis.

The evolution of the coworking space concept has grown exponentially over the past ten years. According to Mordor Intelligence, over the next five years, the coworking space industry will grow at a CAGR of 11%. Several factors will contribute to this growth, as industry reports suggest:

• Higher costs associated with land acquisition and building
• Higher costs for individual office build-outs
• Higher costs for building materials overall
• Increased demand for “team or group community spaces”
• Increased purpose in resource “sustainability”
• Increased goal to minimize expenditures across the board

At the same time, as noted by Work Together, the coworking space will need to innovate more spatial designs and layouts for teams or groups that require collaboration. The team or group concept is now dominating the business world and it is anticipated that it will continue to do so for many years to come.

Customer Analysis

Demographic profile of target market.

The clients of Work Together are typically business owners, investors, business executives, and realtors seeking flexible work spaces in the Las Vegas area. Some clients will just need space for themselves, while others will need space for a small team of up to 15 people. Work Together will offer a variety of office space options to satisfy this diverse demographic.

The demographics of Las Vegas, Nevada are as follows:

Customer Segmentation

Work Together will primarily target the following customer profiles:

• Entrepreneurs
• Remote workers
• Small teams and companies

Competitive Analysis

Direct and indirect competitors.

Work Together will face competition from other companies with similar business profiles. A description of each competitor company is below.

King & Hartfield Group

King & Hartfield is a commercial broker that designs coworking spaces for small and large organizations. These rentals are on an annual basis, and they rarely allow for monthly or temporary leases. Since many professionals and teams need accommodations that are more flexible than this, we expect many local professionals to seek out our more flexible lease options.

Clarkson Coworking Connections

Clarkson provides temporary coworking offices for professionals who only need to rent offices for a few days or weeks at a time. They are specifically designed for entrepreneurs, artists, and others who only need a private space for temporary projects. Since Clarkson Coworking Connections does not offer more permanent services, many professionals and teams will seek out our offices for monthly or annual rentals.

Moss & Associates

This company has been in existence for five years and has created a short list of successful coworking space build outs. The company does not design or build out space for more than six people, working from the platform that too many people in community spaces are not beneficial to their clients. Given this limit, Work Together is positioned to succeed in the larger projects and teams that need coworking accommodations.

Competitive Advantage

Work Together offers several advantages over its competition. Those advantages are:

Marketing Plan

Brand & value proposition.

Work Together will offer the unique value proposition to its clientele:

• Quiet and clean office spaces
• Affordable daily and monthly rates
• Client-focused services, where the company’s interests are aligned with the customer
• Service built on long-term relationships and personal attention

Promotions Strategy

The promotions strategy for Work Together are as follows:

Social Media

Dustin James will create the company’s social media accounts and invest in ads on all social media platforms. The company will use targeted marketing to appeal to our target demographics.

Work Together will develop a professional website that showcases pictures of the office spaces we provide. It will also invest in SEO so that the company’s website will appear at the top of search engine results.

Billboard Advertising

We will drive attention toward Work Together by leasing a billboard alongside major highways. Advertising on heavily traveled commute routes is an opportunity to alert large numbers of individuals who are in need of flexible working options.

Publications

The company will also invest in advertising in selected local and national publications such as professional magazines, newspapers, and other publications to build brand awareness and draw in new customers.

Work Together will charge moderate rates for its coworking spaces so clients feel they are getting a great value when renting out our offices.

Operations Plan

The following will be the operations plan for Work Together. Operation Functions:

• Dustin James will be the President of Work Together. He will oversee the general operations of the organization, rent out offices to clients, and hire and train all staff. Over the next several months, Dustin will focus on hiring the following staff:
• A full time Administrative Assistant who will manage the company website and listings and assist clients with their questions and concerns.
• A Director of Marketing who will run and manage all marketing and advertising efforts.
• Janitorial staff to ensure that the offices are in clean and perfect condition every day.

Milestones:

Work Together aims to achieve the following goals in the next six months.

• 6/1/202X – Finalize lease agreement
• 7/1/202X – Design and Build Out Underway
• 8/1/202X – Design and Build Out Completed
• 9/1/202X – Hire and Train Staff
• 10/1/202X – Grand Opening
• 11/1/202X – Reach Break-Even

Financial Plan

Key revenue & costs.

The key revenues for Work Together will come from charging clients for the offices they rent from us.

The major cost drivers include labor expenses, cleaning expenses, rent, utilities, supplies, and marketing expenses.

Funding Requirements and Use of Funds

Key assumptions.

The following table outlines the key assumptions required in order to achieve the revenue and cost numbers in the financials and pay off the business loan.

• Number of clients per month:
• Year 5: 100
• Annual lease: $150,000

Financial Projections

Income statement, balance sheet, cash flow statement, coworking space business plan faqs, what is a coworking space business plan.

A coworking space business plan is a plan to start and/or grow your coworking space business. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections.

You can easily complete your Coworking Space business plan using our Coworking Space Business Plan Template here .

What are the Main Types of Coworking Space Businesses?

There are a number of different kinds of coworking space businesses , some examples include: Industry specialized coworking space, Business incubator, Private coworking space, and Open coworking space.

How Do You Get Funding for Your Coworking Space Business Plan?

Coworking Space businesses are often funded through small business loans. Personal savings, credit card financing and angel investors are also popular forms of funding.

What are the Steps To Start a Coworking Space Business?

Starting a coworking space business can be an exciting endeavor. Having a clear roadmap of the steps to start a business will help you stay focused on your goals and get started faster.

1. Develop A Coworking Space Business Plan - The first step in starting a business is to create a detailed coworking space business plan that outlines all aspects of the venture. This should include potential market size and target customers, the services or products you will offer, pricing strategies and a detailed financial forecast. 

2. Choose Your Legal Structure - It's important to select an appropriate legal entity for your coworking space business. This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your coworking space business is in compliance with local laws.

3. Register Your Coworking Space Business - Once you have chosen a legal structure, the next step is to register your coworking space business with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws.

4. Identify Financing Options - It’s likely that you’ll need some capital to start your coworking space business, so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms.

5. Choose a Location - Whether you plan on operating out of a physical location or not, you should always have an idea of where you’ll be based should it become necessary in the future as well as what kind of space would be suitable for your operations.

6. Hire Employees - There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events.

7. Acquire Necessary Coworking Space Equipment & Supplies - In order to start your coworking space business, you'll need to purchase all of the necessary equipment and supplies to run a successful operation. 

8. Market & Promote Your Business - Once you have all the necessary pieces in place, it’s time to start promoting and marketing your coworking space business. This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective Search Engine Optimization (SEO) strategy. You should also consider traditional marketing techniques such as radio or print advertising.

How to Write a Winning Coworking Business Plan

So often we see aspiring coworking owners and operators looking to start their business without a good understanding of the coworking business model or how their space is going to reach and maintain profitability.

Creating a business plan before you go on the journey of starting a coworking space is the best way to map out your business strategy and how you intend on making money as a business.

A well-crafted business plan can help guide decision making and give you the confidence you need to succeed. Of course plans can always change, but having a strong starting point is critical to success. 

In this guide, we’ll go through what a coworking business plan is, why you need one, and how to create a plan that covers all your bases. By the end of this article, you’ll have everything you need to be successful in crafting a comprehensive business plan.

What is a coworking business plan?

A coworking business plan is a document that outlines exactly how you will start your coworking space and create a sustainable and profitable business. If you are applying for a loan or looking to receive funding, then a business plan is not just a formality, it’s a necessity. 

Even if you aren’t looking for funding , a business plan is a good way of getting your thoughts together and making sure you have a viable business long before opening your doors or securing your location.

Benefits of a well-crafted coworking business plan

In short, having a business plan for your coworking space gives you a greater chance of overall success. Creating a business plan before opening your coworking space is needed to:

• Get a loan or receive funding
• Guide short-term and long-term strategy
• Help you make important business decisions

Here is another way of looking at it. Let’s say Steve wants to start a coworking space. He finds a property to rent in his area and starts building out the space. He looks at some of the other coworking spaces in the area and uses it to inform what he offers and how he prices it. He opens his doors a year later and…crickets. 

Because Steve didn’t have a business plan in place, he did not consider:

• Who he is targeting
• Whether this location is a good right fit for his market
• If the products he is offering are interesting to his target audience
• How he will acquire his first members
• If the cost of his services are be enough to be profitable on a monthly, quarterly, or annual basis

It may feel like having a business plan isn’t necessary, especially for small or rural spaces , but as you can see, it’s easy to get off track and make the wrong decisions without a solid plan of action in place.

You don’t just need a plan when starting a business however. You’ll also want to consider creating a business plan when you are looking to grow or expand your coworking business , as your business needs may change slightly from when you first opened your space.

What are the components of a business plan for a coworking space business?

Now that you understand the importance of having a strong business plan in place, let’s take a look at the components that make up the best coworking business plans.

Business plans are generally pretty standard, regardless of the industry. The typical components are:

• Executive Summary: summary of the document in its entirety
• Company Description: description of your company including the mission statement and objectives
• Market Analysis: write-up of the market, both local and more broadly
• Competitive Analysis: deep dive into your competitors, both local and more broadly
• Description of Management and Organization: outline your team and how the organization will operate together
• Breakdown of your Products and Services: description of what you will be selling
• Marketing and Sales Strategy: how you plan to market your space and acquire customers
• Financial Projections: a breakdown of your finances and your path to profitability
• Fundraising Strategy/Sources: how you will fund your business

Each section is roughly 1-3 pages long (remember, more does not necessarily equal better). When writing your plan, optimize for clarity and completeness, while still being concise.  This article from Harvard Business Review is an excellent guide to creating a general business plan that can be applied to many different industries. Let’s take a look at each section below and how it relates specifically to coworking.

How to write a coworking business plan

Below we’ll break down each aspect of a business plan and how it applies specifically to your coworking space.

1. Executive Summary

The executive summary is a one-page overview that summarizes your entire business plan at a high level. It should cover who you are, the business you’ll be creating, how you’ll make money, and all other elements of the plan at large. 

Focus on creating impactful sections across the board, and then come back to your executive summary at the end. Much like an introductory paragraph of an essay, it will be easier to write an executive summary at the very end.

2. Company Description

Think of your company description as the “About” page of your business plan. Here, you’ll describe your:

Mission Statement

Why are you starting your coworking space? What do you hope your space will be able to achieve in the broader community? Consider your purpose for creating the space and weave it into your mission statement.

For Jason Jet, Founder at Grindhaus Studios , his mission is to give artists the tools and access they need to be able to scale what they do in an economical way. This guides how he makes all major decisions for his business. 

If you’re a brand new space, the history of your company may cover your personal resume and the skills you’ve acquired that will help you be successful in your role as a coworking space owner and operator. 

If you’re expanding your business, then the history will cover the history of your business up to that point, including all major milestones and successes.

Consider this section an opportunity to build the confidence needed to be successful in your business.

The biggest difference between your mission statement and your objectives is: your mission statement maps out why you do what you do, and the objectives map out what you hope to accomplish on a more tactical level.

Let’s take Jason as an example. If his mission statement is to give artists the tools they need to be successful, then his objective would be to create the number one coworking space for musical artists in the United States.

Overall, keep your company description clear and concise, and don’t get bogged down in the details. The mission statement could be two or three lines, and the history and objectives can easily be addressed through bullet points or brief paragraphs.

3. Market Analysis

Your market analysis will outline key facts and findings about the coworking market you’ll be playing in, including the local market and the coworking sector more broadly. 

This is a very important step in creating your coworking business strategy, and something that you will want to do regardless of if you are creating a business plan or not. Here are some tips for completing a thorough market analysis of the coworking market:

• Look for reports from reputable sources in the industry, such as the Deskmag annual Global Coworking survey , to get important facts and figures related to the industry
• Find communities online, like the We Run Flex community , where people are discussing coworking trends and challenges on an individual level
• Talk to operators and gauge their experience and perspective on the industry to inform your findings

Some important elements to talk about are the growth of the market, current overall trends, and your target customer and how you came to that conclusion.

For example, based on your market analysis, you found that remote workers are making up 20% of coworking space occupants with that number expected to increase. Therefore, you intend to target your coworking space towards remote workers in your area.

Another tip for this section (and your business plan overall) – support all facts and findings with credible sources. If ever a question on where a number comes from pops up, be sure you are able to back it up. 

4. Competitive Analysis

The competitive analysis of your business plan breaks down the competitors in your market. You’ll want to focus specifically on coworking spaces and flexible workspaces in the area where your business will be located, as well as broader competitors that may be a potential threat.

Let’s say Georgia is opening a coworking space in her home town of Vancouver. In her competitive analysis, she’ll want to mention all of the coworking spaces in Vancouver and how she will differentiate herself, as well as large coworking brands that are expected to move into Vancouver in the near future.

Your competitive analysis is ultimately about mapping out how exactly you will win in comparison to the spaces you’re going up against. 

It’s worth mentioning that many coworking space owners and operators don’t like to think of themselves as having “competitors”. It is true that collaboration can (and does) exist in the coworking sector. However, understanding the other coworking spaces in your area is critical to understanding the viability of your business and should not be overlooked.

5. Description of Management and Organization

The description of management and organization section is an opportunity to describe the team of people you will have working with you, with a focus on their credibility and why they will help you be successful.

For many just starting off in the world of coworking, they may be a team of one or two. If that is the case, it’s worth mentioning how you will ensure success in your space in the absence of a larger team.

This could be a good opportunity to mention the coworking technology you will use to help you streamline operations and manage your space. Optix coworking software helps reduce overhead and take care of many of the day-to-day operations so that you’re able to operate a leaner team.

Integrating with an automated access control system like Kisi means you could have an even smaller team overall. This section would be a great opportunity to expand into these details, especially if you plan on operating as a small organization.

6. Breakdown of Your Products and Services

In your Products and Services breakdown, you’ll want to describe the products or services you’ll be offering in your space. For coworking businesses, this may look like:

• The core products you’ll offer ( hot desking , drop-ins, private offices, virtual offices)
• Other additional services ( childcare , marketplace, etc.)
• Amenities you’ll offer in your coworking space
• Opportunity for after hour event rentals or events in your coworking space

Finding the right mix of products to drive profitability in your space can be a challenge for new operators. We always recommend approaching it from a point of experimentation, starting with some kind of offering, and iterating on it from there. 

We also have a comprehensive guide to coworking membership plans you can offer in your space if you’re looking for inspiration on what kinds of plans to offer and how to price them. All of this will be helpful in determining the breakdown of your products and services in your business plan.

7. Marketing and Sales Plan

Investors want to know you have a plan to promote your business. This section should outline the marketing channels you’ll plan to use and give a high-level overview of your overall customer acquisition strategy.

Marketing your space is a beast in and of itself, with a lot of pieces to figure out. We wrote a comprehensive guide to marketing your coworking space that includes 23 marketing ideas for you to refer to. Use this as a starting point.

Keep in mind that your marketing strategy should be centered around your customer – who they are, what messaging will resonate with them, and where you can reach them online and in-person. With your customer at the center of the experience, you won’t go wrong. 

8. Financial Projections

Create a clear and accurate picture as to how much revenue you think you will be able to generate in your first years of business. The reality is, an investor will want to see opportunities for growth with your coworking business , so make sure your numbers are increasing, while remaining realistic.

Revenue projections is an imperfect science, but there are good places to start. The Coworking Growth Calculator by Coworking Resources can help you in creating some realistic financial projections, while giving you a better idea as to how much you can expect to make from your space.

9. Fundraising Strategy/Sources

Finally, the last section of your business plan is dedicated to how you will fund your coworking space. 

If you have received any funding up to this point, you’ll need to disclose the information for transparency. If you are seeking funding, use this section as an opportunity to outline your strategy including how much you are seeking.

A business plan can be a powerful tool in growing a successful coworking space. However, they will only get you so far. This article does a great job at outlining the pros and cons of business plans if you’re curious on what your plan can (and can’t) do for you. 

Remember, the success of your business will ultimately come down to the execution and implementation of your plan. Don’t treat your business plan like an end-all be-all. We’ve seen a wide variety of clients succeed after changing their plan significantly. Execution is the name of the game when it comes to growing a successful business, and it’s best not to lose sight of this.

Tips for writing a business plan for a coworking space

Ready to get started with crafting the perfect business plan? Follow these tips to ensure you create a cohesive plan for your coworking space from start to finish.

1. Always start with your research

The research you do around the market and your competitors should be the basis of your entire business strategy. You can’t know where to open and who to target without understanding the market first.

Be sure to answer some or all of these questions before beginning your business plan.

Market Research:

• What is the size of the market?
• What is the growth trajectory?
• What are trends in the industry?
• What is the primary demographic that it serves?

Competitor Research:

• Who are your direct competitors?
• How big are they (number of members, locations and revenue)?
• Who do they serve?
• What is their messaging and positioning?
• How do they differentiate themselves?

There are many ways to go about conducting research, as we discussed above. Coworking Resources also has a comprehensive guide on how to conduct a competitive analysis specifically in the coworking industry that serves as a great reference if you’re looking for a framework to start off with. 

2. Crowdsource knowledge from the community

The wonderful thing about the coworking community is how willing people are to share their knowledge with one another.

If you’re feeling lost on where to start with your business plan, consider reaching out to a coworking operator who has opened a successful space in the past. This can give you a sense of how to approach the project.

You can also look at other successful coworking businesses and take inspiration from them as to their:

• Business model
• Marketing tactics
• Products and services

Every space is different, but gathering insight from other coworking spaces that have been successful can be a great place to start.

3. Think about who is receiving the business plan and what is important to them

As you go through the process of creating a business plan, you may find yourself becoming unfocused and unsure how to edit your information.

Put yourself in the shoes of who is going to be receiving your plan. Who are they? What do they care about? What information are they hoping to receive from your document?

Use this to help tailor your coworking business plan to fit their specific needs.

Pay special attention to the things that are going to drive business results including:

• Market research (is there room in the market to be successful)
• Competitor research (how saturated is the space and how will you differentiate yourself)
• Products and services (what is your business model and how will it generate revenue)
• Financial projections (is your business able to grow and scale over time)

Read your entire business plan from start to finish through the eyes of who it is intended for before submitting it.

4. Be conservative with your numbers

It’s easy to get excited with your numbers. You need to show that your business is going to succeed and you want the numbers to back it up.

The problem with overestimating these numbers is that it can set you up for a tremendous amount of stress later on if your business fails to meet expectations.

It’s best practice when creating a business plan to always be conservative with your numbers and remain realistic in your expectations. This includes:

• Financial forecasts
• Market size

This article outlines ten common mistakes people make when creating a business plan, including being unrealistic with numbers and forecasts.

It’s always better to underpromise and overdeliver rather than the opposite.

5. Set measurable objectives

Goals and objectives are an integral part of any business. Throughout your business plan, you will want to make sure you are creating clear KPIs and objectives to drive your business forward.

One way of creating measurable objectives is by following the SMART goal framework. SMART goals are goals that are:

• Specific (narrow enough to be achieved)
• Measurable (quantitative)
• Attainable (realistic in the given time frame)
• Relevant (furthers your overall business goals)
• Time-based (can be measured in an amount of time)

Here’s how to apply the SMART goal framework to your coworking business plan.

• Marketing Objective: Acquire 50 new hot desking users in the first 6 months
• Management Objective: Hire a part time community manager in the first 60 days of opening

Measurable goals can help move your business forward and ensure you’re staying on track to achieve them.

Plan for success with your coworking business

At the end of the day, a plan will only get you so far. Focus on executing on the plan and remaining flexible in order to ensure you’re giving yourself the greatest opportunity to succeed.

Looking to start a coworking business? Don’t miss out on these 15 essential costs of starting a coworking space. Want to learn more about Optix and how it can help you start your coworking business? Connect with a member of our team today.

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The Ultimate Guide to Crafting a Winning Business Plan for Your Coworking Space

Table of contents:.

Business plans are cornerstone documents for any company, as they contain essential details about:

• The target market.
• The main competitors.
• Revenue and cost projections .
• Products, services, marketing strategies, and more.

This means writing down a detailed business plan is vital for both your team and outside investors looking to finance your coworking space. In this article, we’ll go over the essential topics your coworking business plan must cover and give you an outline for structuring the document in a logical way.

First, let’s start with a quick overview of business plans.

Business Plans 101 (High-Level Outline Template)

A business plan is a document describing how you plan to start, grow, and manage a business.

You can think of it as a high-level road map that shows where your business is today, where it will go, and how you plan to get it there.

There are tons of useful resources online on how to write a business plan, so we won’t reinvent the wheel here. You can check out QuickBooks’ guide to writing business plans , which proposes a 10-step structure:

• Executive summary , which is a one-page overview of the business. 
• Company description , which includes things like history, objectives, and mission statement.  
• Market research and potential , which describes your target market, including things like names, demographic info, location, company size (for B2B), and so on. When it comes to naming your coworking space, check out this article on some creative coworking space name ideas .
• Competitive analysis , which identifies other businesses selling similar goods or services to your target market.
• Product or service description , which explains what you’re planning to sell, how it works, and its unique benefits.
• Marketing and sales strategy , which goes over how you plan to get your product or service to your target market and convince them to buy.
• Business financials , which can include a whole host of documents like income statements, balance sheets, cash flow statements, and so on.
• Organization and management , which lays out your organizational structure and key role inside your company.  
• Funding requests, which is an optional element for companies looking to raise funds.
• Appendix for official documents , which can be all sorts of documents useful to potential investors, like patents, certificates, deeds, licenses, and so on.

This outline can be a good starting point for any organization looking to build a business plan. In the next sections, we’ll cover 6 topics that are specific to coworking spaces and should be heavily featured in your business plan .

#1 Target Market and Differentiators

Your coworking business plan should answer two key questions near the start:

• Who’s your target market? For example, some coworking spaces focus on enterprise businesses looking for stable, long-term offices. Others target startups that need a small office and a meeting room but have the potential to expand rapidly. 
• What differentiators are going to attract customers from that market to your space? This typically starts with location . Are you going to be near the city center, with lots of amenities nearby, or in a more quiet and secluded suburban area? If you want more details, we have an entire guide on how to choose the right location for your space. Amenities and price can also be additional differentiators.

#2 Main Coworking Product Mix

Your coworking product mix is made up of the products you sell.

As we said in our article on creating a strong product mix , new coworking spaces should focus on three main products:

• Open spaces
• Private offices
• Meeting rooms

It’s important for your business plan to establish what percentage of the space will be allocated to each product . Additionally, it should also include information about how much you plan to charge for them and why.

For example, desks in open spaces may be available for rent on a pay-as-you-go basis, while private offices should be included in membership plans. Meeting rooms can also be included in membership plans or be available for rent by the hour.

#3 Extra Revenue Generators

The bulk of your revenue typically comes from your main product mix. However, there are also plenty of ways to add extra revenue streams.

For example, you can diversify your regular membership plans and charge more for them based on 24/7 access, for example. Or, you can create virtual memberships for businesses that want to establish a legal presence and get a reliable correspondence address.

You can also consider a host of value-added services to help you generate more revenue like:

• Secure lockers
• Mailroom services
• Office relocation services 
• Printing and copying services 
• Custom office design, and more

For more details on this topic, check out our article on generating more revenue for your coworking space .

#4 Marketing and Sales Plan

Once you’ve established your revenue generators, it’s time to get into the details of how you plan to get customers through the door. 

Here are some of the key questions you’ll need to answer here:

• Which marketing channels do you plan to use and why? This typically includes a mix of physical and digital touchpoints, like word of mouth, flyers, social media ads, and search engine optimization (SEO).
• How much will it cost for you to attract one customer (CAC)? CACs are highly dependent on the channel, so you’ll need to run a few initial tests before you can answer this one. 
• How much will you earn from one customer over their lifecycle with your brand (CLTV)? You can break this down by customer segments, e.g., freelancers, startups, and enterprise companies. Keeping a pulse on your CLTV will also help you refine your ideal target persona over time.
• How much will you spend on marketing and sales every month? This is usually a pretty straightforward calculation if you have a few months of experience under your belt.

If you’re just getting started and don’t have any experience with marketing and sales, check out our article on the 14 proven strategies for attracting more coworking space members .

#5 Expenses

For most coworking spaces, the biggest recurring expense is the monthly lease (except for operators using management agreements ). 

You also want to include other key costs here, such as:

• Space maintenance
• New purchases (desks, chairs, etc.)

#6 Revenue and Cost Projections

The goal of listing your revenue generators and expenses is to get a good idea of how much revenue you’ll need to cover your costs and turn a profit. 

For instance, say you have $5000 of regular expenses every month. Your projections should show how long it would take for revenue to reach and surpass that number. This is perhaps the most important part of any business plan, especially if you’re looking to attract outside investors.

In general, it’s better to be conservative than to set unrealistically high expectations and fall way below them . It’s also a good idea to factor in some unexpected expenses in your calculations.

For example, if your regular expenses are $5000, you want to reach $5500-6000 of monthly revenue before considering the space profitable on a monthly basis.

This coworking revenue calculator is a useful resource for projecting profits and losses, as well as building charts for investor decks.

Establish and Grow Your Coworking Space with OfficeRnD’s Flex Startup Program

Writing a business plan is only one step in building a successful coworking space. You also need to find the right location, promote your space, and before everything else, choose the right coworking management software . 

To help you out, we created the OfficeRnD Flex Startup program . It’s geared towards aspiring flex and coworking entrepreneurs and offers an attractive 50% annual discount on OfficeRnD Flex’s startup plan . Plus, you get access to Flex Academy – an expertly curated list of coworking resources that contain everything you need to build, manage and grow a successful coworking space in 2023 and beyond.

Apply for the Flex Startup program here.

Asen Stoyanchev

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Coworking Business Plan + 6 months strategy launching [PDF Download]

Business Plan for Your Coworking Space

Developing a business plan for a coworking centre can be a long and complex process, especially if you are inexperienced. However, you are an operator going for your second space. In that case, a business plan will help you improve your strategy and better define the actions to carry it out because it is a living document that needs to be updated every year as the business grows .

Whether you are opening your first or second coworking space, before investing in the project , you should first conduct a feasibility study to determine the project’s profitability and confirm that there is a business opportunity.

Once you have validated the project’s feasibility, the next step is to draw up your business plan. The feasibility study and the business plan are closely linked; the first one assures you that there is a business and sets the economic objectives , while the second one proposes the strategy and the actions to be implemented to achieve the goals.

At HWL, we have completed nearly 50 coworking projects worldwide and have the experience in Coworking Development , knowledge and resources to help you create your business plan. In this article, we explain how we can help you to make this process less complicated.

Why do you need a business plan for a coworking space?

Making a coworking business plan is essential because:

• It defines the strategy of your company and the actions to be implemented.
• It plans the growth of your business.
• It projects the financial profitability of the business over the years.
• It reduces risks.
• It improves your operations.
• In addition, it can help you obtain financing.

What are the components of a coworking business plan?

Divide the business plan into three blocks:

1. Business model validation.

2. Business development.

1. Business model validation

You elaborate on the feasibility study . This section is critical because it will help you decide whether your coworking project will work. 

Executive summary

It describes the company and provides critical conclusions once you finish the business plan. It includes:

• Overview of the company.
• Description of the partners, management team and key collaborators.
• Value proposition.
• Space allocation summary.
• Financial study summary.

Market research

A market study helps you to detect if there is a business opportunity for your coworking, who your demand is , what they need and how you can standby from your competition . It includes:

• Local environment analysis: Explore the location and detect surrounding services (bars, restaurants, gyms), nearby competitors, corporations, universities, coworking spaces, technology hubs, business centres, etcetera.
• Benchmarking of local and inspirational competitors: Compare data such as services offered, prices, size of space or number of workstations, common areas, value proposition and audience.
• Demand and needs exploration: Segment the audience and design your Buyer Persona (user type, generation, pains and needs, interests, habits, purchasing power).
• Value proposition: Identify the objectives and needs of your potential users and link them to the value proposition.

Property analysis

Hire an engineer to confirm the property is valid, comply  with the coworking activity regulations , and obtain all the necessary permits.

Space distribution

• Space allocation programme: Define your space’s different uses and needs according to your demand. With the architectural programme, you obtain the productive units to generate income in your financial plan.
• Preliminary architectural study: Preliminary design of the space distribution following the space allocation programme’s indications. An architect must dump the information from the programme into AutoCAD to validate the productive units obtained.

Business model

10-year economic and financial study under three different occupancy scenarios will project monthly revenues, operating expenses and cash flow. It also will include the Capex and critical financial profitability metrics for the space as a service business model. As a result, you will get a perfect financial picture of the business and set the financial targets to be achieved.

2. Business development

You create the strategy of your coworking business and plan all the actions to be carried out to achieve the objectives established in the financial study.

Marketing strategy

This serves to attract , engage and retain potential members of your coworking space. It includes:

• Products and services: Describe all plans, memberships, included services and additional services.
• Promotions and pricing: Document the prices you will offer and compare them with your competitors. Also include plan opening promotions, contract promotions, etc.
• Key alliances: Proposal of potential partners (associations, universities, influencers, perks).
• Sales channels: Identification of the different brokers and specific sales channels for coworking.
• Communication plan: Define the channels through which you will communicate (social networks, website, posters, events, etc).
• Community development plan: Stages and actions for the development of the community (creation, development and retention) including a programme of activities for each stage.
• User experience: Design and describe the coworker journey in all its stages, from lead generation, conversion, on-boarding, and retention to exit.
• Lead Generation Strategy (Facebook and Google ads).
• Media plan.
• Blog and SEO strategy.
• Newsletter strategy.

Technology strategy

Proposal of technological solutions for intelligent space and business management :

• Management software.
• Software integrations: electronic access, printing, platform, community, internet, etc.
• Business production tools: project manager, CRM, cloud workspace, etc.
• Description of the management team, their roles, responsibilities, tasks, remuneration and schedules for each position.
• Training plan for the team.

Operations manual

Describe how you are going to achieve the related objectives. It includes all the daily processes and tasks to be carried out by each department:

• Space or facility Manual.
• Team manual or employee handbook.
• Sales Manual (including the Coworking Agreement).
• Venue hire/ external events manual.
• Communication manual.
• Community manual (including the House Rules).

3. Strategy & timeline for the launch of your coworking business

Prepare to go to market three months before the opening and three months after .

We share with you a co-created launch strategy made by 20 coworking operators from different countries as a result of a workshop facilitated by Claire Carpenter from The Melting Pot and Vanessa Sans from HWL. You can download the launch plan with the leading strategies and action plans for setting up a coworking centre during the three months before and after its opening date.

As you can see, developing a business plan for your coworking is a worthwhile endeavour. Follow the structure we have proposed. You will become an expert capable of generating a marketing strategy, making an operational plan, and starting up and growing a thriving coworking centre. If you need help in the process, contact us .

If you enjoyed this article, you would like How to open a coworking space .

Featured picture courtesy of Aticco coworking .

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Coworking Space Business Plan Essentials

Starting a coworking space can be an incredibly rewarding endeavor, but it’s not without its challenges. Before you take the plunge, it’s essential to have a solid business plan in place. This step-by-step checklist will help you get started.

Click here to download a free business plan template.

1. Define Your Business Model

Think about what kind of coworking space you want to create and what services you’ll offer. Ask yourself:

• What services are you offering? (e.g., hot desking, private offices, meeting rooms, event space)
• Who’s your target market? (e.g., freelancers, startups, remote workers, small businesses)
• What does your pricing model look like? (e.g., membership fees, hourly rates, monthly packages)

These are a few of the components that will make up the foundation of your coworking space business plan. As you learn more about the market and what works for your particular niche, you can revisit it and make updates as needed.

2. Do Your Research

Now that you’ve defined your business model, it’s time to do some research. This step is all about understanding the market for coworking spaces and getting a better sense of the competition. Since some spaces will have different demands in different markets, you need to make sure there is a market need for what you offer.

Additionally, you need to understand your target customers and what they’re looking for in a coworking space. Here are some specific research tasks you should consider.

Market Analysis

First, look at the bigger picture to help understand the overall trends in the coworking industry. Then you can overlay those trends on your local market to get a better sense of what’s happening in your area.

While local trends often follow national trends, there can be significant variation from one city to the next, especially if your city offers something unique that’s appealing to coworking space users.

Competitor Analysis

Once you understand the general trends in the coworking industry, it’s time to take a closer look at your local competition. This will help you know what’s already being offered in your area and where there might be gaps in the market that you can fill.

For example, maybe you’ve noticed that there are no coworking spaces specifically targeting freelancers, but there’s a large population of freelancers nearby. If that’s the case, you could consider catering your space toward that segment of the market.

Customer Analysis

In addition to understanding your competition, it’s also essential to understand your target customers, including their needs, wants, and pain points. One of the best ways to do this is to reach out directly to your target market and ask them about their coworking experiences.

You can do this through surveys, interviews, or focus groups geared toward:

• Needs : These are the basic requirements your target market has for a coworking space. For example, they might need a place to work outside of their home with reliable Wi-Fi and a comfortable chair.
• Wants : These are the things that would make your target market’s coworking experience even better. For example, they might wish for a space close to public transportation with a kitchen where they can make their own food.
• Pain points : These are the things that make your target market’s current coworking experience less than ideal. For example, they might be unhappy with the noise level or the lack of privacy.

By understanding your target market’s needs, wants, and pain points, you’ll be able to create a coworking space that’s tailored to them and meets their specific needs.

3. Assemble Your Team

No business can succeed without a great team in place, and your coworking space is no exception. As you start to put together your team, it’s important to keep your target market in mind. For example, if you’re targeting freelancers, you might want to hire a freelance accountant to help with the financial side of things.

You should also consider the skills and experience of your team members. As another example, if you’re planning to offer coworking memberships to small businesses, you might want to hire someone with experience in business development or sales.

These are all critical questions to answer as you assemble your team. By taking the time to find the right people and put together a strong team, you’ll be setting yourself up for success.

4. Create a Budget

Now that you understand the market and what your target customers are looking for, you can start putting together a budget . This will help you know the estimated costs of starting and running your coworking space. Some of the necessary expenses you should consider include:

• Rent or mortgage

5. Membership Fees

Once you’ve calculated all of your costs, you can decide how much you’ll charge for your space. You’ll need to ensure your prices are high enough to cover your expenses and leave you with a profit, but not so high that people are deterred from joining.

There are different ways you can approach this. You might want to offer different membership levels, such as a basic membership that gives access to the space during business hours or a premium membership that includes access to the area 24/7.

You may also want to consider discounts for longer-term memberships or people who sign up for multiple memberships. For example, you could offer a 10% discount for six-month memberships and a 20% discount for 12-month or more memberships.

Keep in mind that as you add more tiers, you will have more billing and invoices to keep track of. Therefore, you will need a management software that can handle billing and payments seamlessly. No matter how complex your pricing model is, a software like CoWello automates payment collection for you.

6. Marketing

You’ll need to market your coworking space to attract customers and grow your business. The cost will vary depending on the type of marketing and how much you spend. For example, if you plan to do a significant amount of online marketing, you might want to invest in a website and pay for online advertising.

Your marketing efforts will also vary depending on who your target audience is. Start by identifying your ideal customer and then craft your marketing message accordingly. For example, maybe you’ve realized there is a market for coworking spaces that offers services like childcare or pet-sitting. In that case, you want to make sure your marketing and messaging reflect that.

7. Use Technology to Make Your Life Easier

There are a lot of different software programs and apps that can help you run your coworking space more efficiently. For example, you might use an app to manage membership fees and bookings or help with marketing and promotion.

You can also use technology to make it easier for people to find and book your space. For example, you might use coworking space management software like Cowello to help manage bookings and payments.

You might also want to invest in some security cameras and access control systems to help you keep an eye on your space and make sure only members have access.

Starting a coworking space can be a great way to bring people together and create a community. But it’s important to remember that it’s also a business, and you need to treat it as such.

Do your research, create a solid business plan, and price your membership fees correctly. If you do all of these things, you’ll be well on your way to running a successful coworking space.

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How To Write A Bulletproof Coworking Space Business Plan

October 18, 2022

Adam Hoeksema

Hybrid work models are leaving offices bare all over the world, and the consequent effect on the prices of corporate real estate is leading savvy entrepreneurs to consider new options. Coworking space business models are emerging with a new range of approaches to providing remote workspaces that combine the comfort of the home with the functionality of the office, in a location that’s convenient for everyone. 

Now is a good time to start figuring out how to start such a business, and if you’re serious about it, you’re going to need to do the groundwork. A coworking space business plan is an essential document to start building and will pave the way for you to secure your funding. It’ll also teach you a lot about the industry, the market, and how you’re going to be functioning in relation to both. 

We’re going to show you a template for your very own coworking space business plan design in this article, which can serve as a checklist of all the research and documentation you’ll need to gather to get started. Before we go into that though, let’s look at why this kind of business is becoming so popular. 

Why and How to Start a Coworking Space

With employers shifting to remote and hybrid models, you might think there’s a sudden increase in half-empty office buildings, and to some extent, you’d be right . Office demand is expected to decline significantly, and the majority next generation of companies to start up will certainly be factoring in a smaller physical workspace to their budgets and forecasts. 

However, something still has to be done with all these empty floors, and for some entrepreneurs, this is an appealing prospect. At the worst of times, coworking spaces are less vulnerable to industry shifts, and with office real estate looking like such a good investment right now, this might be the perfect time to jump ahead with learning how to start a coworking space. 

While some companies are pushing for a full return to the office, the workforce is resisting, and it looks like those companies that are earliest to embrace hybrid workspaces are the most likely to take advantage of the new normal. Many people prefer the flexibility and comfort that remote work provides, and many find that their role in the company does not require them to be physically present. 

It’s also becoming more apparent that workers are even more productive when working from home. The combination of these factors results in a powerful demand for new working setups, and as companies necessarily compete to retain their most valuable talent, new workspaces are emerging. 

As hybrid setups look like they will stick around for the long term, entrepreneurs are now making use of coworking spaces to reduce overheads for companies on real estate. 

The benefits come from several angles. Combining the facilities of an office with the comfort of working in a casual environment, companies can rent coworking spaces in cities where they have high numbers of hybrid workers, providing them with a more accessible workplace that requires very little in the way of a commute. 

This allows workers who may have busy homes to get some conducive space without heading all the way into the office. It also allows companies to bridge the gap between office and fully-remote workforces, saving costs on a more dispersed workforce while maintaining productive, shared facilities. 

The applications for share workspaces are numerous, and there are several business models to consider. Before you get onto your business plan, it’s important to figure out which model you’ll be going with, and then how and where you’ll be funding it. Let’s go over that now.

The Coworking Space Business Model 

The different types of business models can be broken down by the scale you plan to be working with. For small operations, you’ve got different options than larger ones, and each comes with its benefits and drawbacks. Here are some approaches you might want to take:

• For small-scale - Using repurposed space is one way to make use of some of those newly-empty buildings. They don’t have to be offices; they can be community buildings like churches or town halls. Partnerships are available in these instances, or you can rent or buy a space specifically.

Splitting the cost between you and another company can further reduce your overheads, and if you can find a complementary business to partner with, this can boost the profits for both. Consultancy firms may benefit from a stream of workers from the same industry sharing a space, and members of the space benefit from the ability to network with one another, too.

• For mid-scale - Empty office spaces are already set up for work; with a little renovation, you can make them into a combined office and coworking space, getting the best of both worlds and creating a functional floor that is relaxed and casual at the same time. Alternatively, you can design a venue for educational programs that companies will happily send their staff to take part in, meanwhile members benefit from the free seminars or lectures. Mid-scale coworking spaces sit in the bracket with the most diverse set of options. You can do a lot of the things in this range that you can’t do with smaller spaces, and you can create a lot of the benefits of a much larger enterprise but at a slightly smaller scale. Further, if you have long-term plans to grow, you’ll be in a position to replicate the successes of this company in other places, which is where large-scale investment will come in.
• Large-scale - Any of the above can be created in number, spread around in different cities, and marketed to companies of all kinds. If you are ambitious and you want to start building a large company (and you can get funding for it), this might be the ultimate goal for your coworking business. Early adopters will benefit from the largest share of the new market .

These are just a handful of directions that you could take for your business, but whichever you choose will need to be attractive enough to funders, which is where your business plan will come in. Before we go over that, let’s recap the standard sources of capital for new ventures.

Source your Funding for your Coworking Space

There are three main sources of funds for new companies, and the source or sources you choose will depend on how much you need, how quickly, and what you’re willing to contribute. 

• Bootstrapping – this is money off your own back. Either from your savings, from your main job, or from maxing out your credit cards, this is one way to take on the full financial responsibility yourself. This is generally a slower process, and only provides capital for smaller ventures (unless you’re quite wealthy), but the perks are significant. Bootstrapping your company allows you to maintain full equity, and therefore full control of the direction of your project. You’re not going to be at the mercy of shareholders, and you won’t have lenders on your back to return the money (credit card companies excluded).
• Banks – Banks are often happy to dish out substantial capital to new and attractive businesses, particularly because they will secure the loan to your private assets. This means that if the company fails, they still get their money back, and that’s one of the significant drawbacks of taking this route. Perks include the speed and the sheer amount of capital they can provide, as well as the fact that you’ll keep your equity. Just remember that you’ll be on the hook, regardless of the financial state of the company.
• Investors – There are numerous types of investors, from pre-seed to seed, through Angel, to Venture Capitalists, and everything in-between. The principle is similar for each of them, and the level you choose will depend on the stage of funding you’re looking for. Essentially investors will be likely to take some share of your company in exchange for capital – the more capital, the higher the share – and the financial risk will be on them. Some investors will have valuable experience in the industry, so you may be able to gain much more from finding the right person, but you will have to appease them as shareholders as the company grows. 

While these are the three main types of funding, it’s worth keeping an eye out for grants for new businesses. It’s a good idea to have an understanding of the amount you’ll be looking for before you get started, but if you’re still not sure how much you’re going to benefit from drawing up a coworking space business plan. 

A Template for your Coworking Space Business Plan

The business plan for most new ventures follows a standard format that can be used as a template. A business plan is much more than just a record of your company docs and data; it’s a comprehensive study into the health and prognosis of your business. 

The pages of a business plan are typically presented in the order described below, however, they don’t need to be completed sequentially, and some may be more supportive to others if researched and completed in a different order. Once it’s done, the document will read as follows:

• Executive Summary – This will be a general overview of the document as it stands. A brief introduction to the company, its mission, and the contents of your coworking space business plan to follow. Obviously, you can’t complete this page until the rest of the document is done, so you’ll likely save this page for last.
• Market analysis – This page is next, and should paint a detailed and accurate picture of where your company belongs in the industry. To complete this section of the document, you’ll need to do your market research thoroughly, and understand who and where your competition is. This page needs to show investors that you understand the coworking space concept, the industry as it is, and its future. It then needs to explain to the reader exactly how you plan to take your share of the market and hold it. This is the page where your ideal customer will be described and backed up by the market data you have gathered in your research phase. This page and its data, when complete, will segue neatly into how your company will meet its market in the next section.
• Company description – Here, you’re going to be describing what you’re offering that directly meets the needs of those ideal customers you’ve identified. Explain your plan of action, and how your approach settles into a niche of its own and does the job better than your competition. The goal of this section is to stand out among the competition, in whichever way you can. Maybe you’ll be cheaper than them, or provide a wider range of services. Whatever it is you do differently needs to be highlighted here and depicted as a selling factor to your customers. 
• Organizational structure – This page will introduce the key players in your company and how the hierarchy is laid out. This is a good place to expand upon some of the elements in the company description and point out how your management or administration talent is going to help you take on the industry.  Where possible, include resumes and photos of your most relevant team, and explain how each individual’s contribution will push your company towards its goals. This page is a brief overview of your top talent, but don’t overdo it with the accolades and enthusiasm. As with everything in this document, you need to be accurate – it’s not a sales pitch.
• Products and services – This page is heavily dependent on the business model you’re choosing. A larger coworking space may have talks, training, consultancy services, etc. These will all need to be listed, along with the price and the way they will be arranged. Membership tiers, discounts, and other key components of the revenue streams you’ll be expecting need to be laid out in detail, and if your space will be selling any products, even )coffee and cookies!) itemize them here with their price.
• Sales and Marketing – Now you’re going to describe the strategies you’ve devised to reach these customers. You’ve laid out your market, and you’ve explained how your company can help them, and now it’s time to describe the bridges you’re going to build to find them and introduce them to your brand. Identify the media channels you will use, describe your sales funnel as it relates to your demographics, and cover touchpoints in as much detail as possible to show that you understand the market well and how to approach it. 
• Financial projections – Now we come to the meat of the document. Many investors will skip to this page early, and for good reason. This page is a testament to how well you know your business. It’s going to act as a litmus test for investors to judge how reliable you are as a partner. Your projections need to be based on real figures, and they need to be honest. If you’re trying to market your company to investors by exaggerating its prospects in the industry, you’re going to make yourself look dishonest or at best incompetent. Detailed and realistic projections come from detailed and realistic financial documents, so these need to be well-researched and presentable on both counts. 

For help with this, at ProjectionHub we have over 70 different industry-specific projection templates including a template just for coworking spaces . Using a professional-grade template can make all the difference to the presentation of your most important data when it comes to appealing to investors or lenders. 

Make use of this template as a checklist that can be used to go through your company research and documentation and form a profile of your project that can guide you into the industry. When completed with care and attention, it will make the difference between acceptance and rejection of any sources of funding you may request. 

A coworking space provides companies and their workers with a middle-ground that takes the benefits of remote work and combines it with the facilities of the office. The great thing about such a space is that it can house multiple companies’ employees, bringing networking opportunities to members, and creating resilience against industry shifts by providing a diversity of bodies. 

Setting up a coworking space business plan should be one of the earliest steps in this venture, as it represents the transitional moment between idea and reality, and solidifies your project with a genuine path to success. 

Forming a business plan shows you exactly how to set up a coworking space, as it involves deep market and financial research, and is as much a process of education as it is of documentation. A detailed plan will display your company in a good light and detail exactly how your investors will get their ROI from supporting you, as well as bring you accurate insights into how to get started.

About the Author

Adam is the Co-founder of ProjectionHub which helps entrepreneurs create financial projections for potential investors, lenders and internal business planning. Since 2012, over 50,000 entrepreneurs from around the world have used ProjectionHub to help create financial projections.

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Here is a free business plan sample for a coworking space.

Are you considering launching a coworking space and seeking guidance on how to structure your business plan?

In the content that follows, we will present you with a comprehensive sample business plan tailored for a coworking space.

Creating a solid business plan is crucial for any aspiring entrepreneur. It serves as a roadmap, outlining your vision, objectives, and the strategies you'll employ to carve out your niche in the competitive world of shared workspaces.

To craft a compelling plan with ease and precision, you're invited to utilize our coworking space business plan template. Additionally, our team of experts is available to review and refine your plan at no extra cost.

How to draft a great business plan for your coworking space?

A good business plan for a coworking space must reflect the unique aspects of this type of business.

To start, it is crucial to provide a comprehensive overview of the coworking industry. This includes offering up-to-date statistics and pinpointing emerging trends in the coworking sector, as illustrated in our coworking space business plan template .

Then, you need to articulate your business concept effectively. This encompasses your vision, identifying your target market (such as freelancers, startups, remote workers, or small businesses), and the distinctive features of your coworking space (modern design, networking opportunities, niche focus, etc.).

The subsequent section should delve into market analysis. This requires a thorough understanding of local demand, the competitive landscape, and the preferences of potential members.

For a coworking space, particular emphasis should be placed on the services and amenities you plan to provide. Detail the variety of workspaces - open desks, private offices, meeting rooms - and explain how they cater to the needs and work styles of your target clientele.

The operational plan is equally important. It should outline the location of your coworking space, the layout of the work and communal areas, technology infrastructure, and the management of day-to-day operations.

For a coworking space, it is vital to highlight the quality of the work environment, the robustness of the IT infrastructure, and the community-building activities.

Next, tackle your marketing and sales strategy. How will you draw in and keep members? Consider promotional tactics, membership benefits, and additional services (like workshops, events, or consultancy).

Online strategies, such as a professional website or an active social media presence, are also crucial in the digital age.

The financial framework is another fundamental component. This includes the initial investment, revenue projections, operational expenses, and the point at which the business becomes profitable.

In a coworking space, revenue streams can be diverse, so it is essential to plan carefully and have a solid grasp of your financials. For assistance, you can refer to our financial forecast for a coworking space .

Compared to other business plans, a coworking space plan must pay special attention to aspects such as the real estate market, the flexibility of membership plans, and the creation of a strong community culture.

A well-crafted business plan will not only help the entrepreneur to define their vision and strategies but also to attract investors or secure loans.

Lenders and investors are looking for comprehensive market research, realistic financial projections, and a clear understanding of the daily operations of a coworking space.

By presenting a thorough and substantiated plan, you showcase your credibility and dedication to the success of your venture.

To achieve these goals while saving time, you can simply fill out our coworking space business plan template .

A free example of business plan for a coworking space

Here, we will provide a concise and illustrative example of a business plan for a specific project.

This example aims to provide an overview of the essential components of a business plan. It is important to note that this version is only a summary. As it stands, this business plan is not sufficiently developed to support a profitability strategy or convince a bank to provide financing.

To be effective, the business plan should be significantly more detailed, including up-to-date market data, more persuasive arguments, a thorough market study, a three-year action plan, as well as detailed financial tables such as a projected income statement, projected balance sheet, cash flow budget, and break-even analysis.

All these elements have been thoroughly included by our experts in the business plan template they have designed for a coworking space .

Here, we will follow the same structure as in our business plan template.

Market Opportunity

Market data and figures.

The coworking space industry has seen a surge in popularity, particularly in the wake of changing work patterns.

Recent studies have valued the global coworking space market at approximately 26 billion dollars, with projections indicating continued growth as the gig economy expands and corporations adopt more flexible work arrangements.

In the United States alone, there are over 5,000 coworking spaces, contributing significantly to the economy by providing entrepreneurs, freelancers, and businesses with flexible workspaces.

These statistics underscore the integral role coworking spaces play in today's work environment and their growing economic impact.

The coworking industry is characterized by several key trends that reflect the evolving nature of work.

Hybrid work models are becoming the norm, with a blend of remote and in-office work that supports flexibility and work-life balance. This has led to an increased demand for coworking spaces that offer a professional environment close to home.

There is also a rise in niche coworking spaces catering to specific industries or communities, fostering networking and collaboration among like-minded professionals.

Technology integration is crucial, with high-speed internet and state-of-the-art office equipment becoming standard offerings in coworking spaces.

Additionally, there is a growing emphasis on creating spaces that promote well-being, with ergonomic furniture, natural lighting, and greenery.

Finally, the importance of community building through events, workshops, and social gatherings is a significant trend, as these activities add value to the coworking experience and help retain members.

Success Factors

Several factors contribute to the success of a coworking space.

Location is paramount, as spaces situated in accessible, vibrant neighborhoods are more attractive to potential members.

The design and functionality of the space are also critical, with a need for a variety of work areas, including private offices, open desks, meeting rooms, and lounge areas to cater to different work styles and preferences.

Community engagement is another key element, as fostering a sense of community can differentiate a coworking space and encourage member retention.

Offering flexible membership plans that cater to varying needs, from daily passes to long-term leases, can also be a decisive factor in attracting a diverse range of members.

Lastly, maintaining a high level of customer service and providing members with the resources and support they need to be productive are essential for the long-term success of a coworking space.

The Project

Project presentation.

Our coworking space project is designed to cater to the evolving needs of freelancers, entrepreneurs, and remote workers seeking a professional and collaborative work environment. Strategically located in an urban center with easy access to public transportation, our coworking space will offer a variety of workspaces, including private offices, open desks, meeting rooms, and lounge areas, all equipped with high-speed internet and modern office amenities.

The emphasis will be on creating a dynamic, inspiring, and community-driven atmosphere that fosters networking, productivity, and creativity among its members.

This coworking space aims to become a hub for innovation and collaboration, providing a flexible and cost-effective alternative to traditional office leasing, and supporting the growth and success of its diverse member base.

Value Proposition

The value proposition of our coworking space project is centered around offering a flexible, modern, and community-focused workspace solution. We provide a variety of membership options tailored to the unique needs of individuals and teams, ensuring that our members have access to the resources they need to thrive.

Our commitment to fostering a collaborative environment, coupled with our state-of-the-art facilities, offers a unique blend of productivity and networking opportunities, while also promoting a healthy work-life balance.

We are dedicated to building a diverse and vibrant community where members can connect, share ideas, and grow their businesses, and we aim to empower our members by hosting workshops, events, and mentorship programs.

Our coworking space aspires to be more than just a place to work; it aims to be a catalyst for professional development and a cornerstone of the entrepreneurial ecosystem in the area.

Project Owner

The project owner is an experienced entrepreneur with a passion for fostering business growth and community engagement.

With a background in business development and a keen understanding of the challenges faced by today's workforce, he is committed to creating a coworking space that stands out for its commitment to flexibility, innovation, and community.

Driven by a vision of creating a supportive environment for entrepreneurs and remote workers, he is determined to offer a space that not only meets the practical demands of modern professionals but also nurtures the spirit of collaboration and continuous learning.

His dedication to excellence and his entrepreneurial spirit make him the driving force behind this project, aiming to revolutionize the way people work and connect in a shared space.

The Market Study

Market segments.

The market segments for this coworking space are diverse and cater to various professional needs.

Firstly, there are freelancers and remote workers who seek a structured environment that fosters productivity away from home distractions.

Next, we have startups and small businesses that require flexible office solutions without the commitment and overhead of traditional office leases.

Additionally, the coworking space serves larger corporations looking for satellite offices or temporary project spaces for their teams.

Finally, entrepreneurs and professionals who travel frequently may use the coworking space as a base for their transient work needs.

SWOT Analysis

A SWOT analysis of the coworking space project highlights several key factors.

Strengths include a prime location, a variety of workspace options, state-of-the-art facilities, and a strong community network.

Weaknesses might involve the challenge of differentiating from other coworking spaces and the ongoing costs associated with maintaining cutting-edge amenities.

Opportunities can be found in the growing trend of remote work, the potential for hosting events and workshops, and the ability to offer additional services such as business consulting or networking opportunities.

Threats could encompass economic downturns affecting small businesses and freelancers, as well as the emergence of new competitors in the coworking industry.

Competitor Analysis

Competitor analysis in the coworking industry indicates a competitive landscape with a mix of local and international players.

Direct competitors include other coworking spaces, business incubators, and shared office providers.

These competitors strive to attract a diverse professional clientele by offering various amenities, community events, and membership perks.

Potential competitive advantages for our coworking space include a superior location, a strong emphasis on community building, flexible membership plans, and a robust support system for entrepreneurs and businesses.

Understanding the strengths and weaknesses of these competitors is crucial for carving out a unique position in the market and ensuring member loyalty.

Competitive Advantages

Our coworking space stands out due to its strategic location, flexible and innovative workspace solutions, and a vibrant professional community.

We offer a range of options from hot desks to private offices, catering to the varying needs of our members, all within a modern and inspiring environment.

Moreover, our commitment to fostering a collaborative community through networking events, workshops, and social gatherings creates a unique ecosystem that encourages growth and success for our members.

We pride ourselves on our adaptability to the evolving needs of the workforce and our dedication to providing top-tier services and amenities.

You can also read our articles about: - how to start a coworking space: a complete guide - the customer segments of a coworking space - the competition study for a coworking space

The Strategy

Development plan.

Our three-year development plan for the coworking space is designed to foster a community of innovation and collaboration.

In the first year, we will concentrate on building a strong member base by providing a versatile and inspiring work environment, coupled with networking events and professional development workshops.

The second year will focus on expanding our services, including private offices, dedicated desks, and virtual office packages, as well as enhancing our technological infrastructure to cater to the evolving needs of our members.

In the third year, we aim to establish additional locations in key business districts to create a network of coworking spaces, facilitating greater accessibility and convenience for our members.

Throughout this period, we will remain committed to creating a dynamic and supportive ecosystem for entrepreneurs, freelancers, and businesses, ensuring our coworking space is synonymous with productivity and professional growth.

Business Model Canvas

The Business Model Canvas for our coworking space targets freelancers, startups, and small to medium-sized enterprises seeking flexible and collaborative workspaces.

Our value proposition revolves around providing a professional work environment with high-speed internet, meeting rooms, and networking opportunities, all within a community-driven atmosphere.

We offer memberships through various plans, including hot desks, dedicated desks, and private offices, utilizing our key resources such as our well-designed spaces and community management team.

Key activities include space management, event organization, and community engagement.

Our revenue streams are generated from membership fees, event space rentals, and additional services such as printing and mail handling, while our costs are associated with leasing, space maintenance, and staff salaries.

Find a complete and editable real Business Model Canvas in our business plan template .

Marketing Strategy

Our marketing strategy is centered on building a strong brand presence within the local business community.

We aim to attract members by showcasing the benefits of coworking spaces, such as flexibility, cost-efficiency, and the opportunity for collaboration. Our approach includes targeted digital marketing campaigns, hosting industry events, and offering trial memberships.

We will also establish partnerships with local businesses and entrepreneurial organizations to increase referrals and provide exclusive benefits to our members.

Additionally, we will leverage social media platforms and influencer partnerships to amplify our reach and engage with a wider audience, while emphasizing the unique features and community aspect of our coworking space.

Risk Policy

The risk policy for our coworking space is designed to mitigate risks associated with real estate, market fluctuations, and member retention.

We will adopt flexible lease agreements to adapt to changing market conditions and maintain a diversified member base to reduce dependency on any single industry or client.

Regular member feedback sessions and satisfaction surveys will help us to continuously improve our services and address any concerns promptly. Additionally, we will maintain a conservative financial strategy to manage operational costs effectively.

We will also carry comprehensive insurance to cover liabilities related to property and general business operations. Our priority is to provide a secure and reliable workspace while ensuring the satisfaction and safety of our members.

Why Our Project is Viable

We envision creating a network of coworking spaces that cater to the dynamic needs of modern professionals and businesses.

With our focus on flexibility, community, and professional growth, we are confident in our ability to thrive in the coworking industry.

We are excited about the opportunity to empower individuals and businesses by providing them with the resources and environment they need to succeed.

We are adaptable and ready to evolve with the market to achieve our objectives, and we look forward to the promising future of our coworking space initiative.

You can also read our articles about: - the Business Model Canvas of a coworking space - the marketing strategy for a coworking space

The Financial Plan

Of course, the text presented below is far from sufficient to serve as a solid and credible financial analysis for a bank or potential investor. They expect specific numbers, financial statements, and charts demonstrating the profitability of your project.

All these elements are available in our business plan template for a coworking space and our financial plan for a coworking space .

Initial expenses for our coworking space include leasing a suitable location, outfitting the space with modern office furniture, high-speed internet, and communication technology, creating comfortable and versatile work areas, investing in security systems, and costs related to brand creation and launching targeted marketing campaigns to attract freelancers, remote workers, and startups.

Our revenue assumptions are based on a thorough analysis of the local demand for flexible workspaces, considering the increasing trend of remote work and the entrepreneurial boom that requires such facilities.

We anticipate progressively increasing membership subscriptions, starting modestly and growing as the awareness and reputation of our coworking space develops.

The projected income statement indicates expected revenues from membership fees, event space rentals, and additional services offered, minus the operating costs (utilities, internet, maintenance), and operating expenses (rent, marketing, salaries, etc.).

This results in a forecasted net profit crucial for evaluating the profitability of our business over time.

The projected balance sheet reflects assets specific to our business, such as office equipment, technology investments, and liabilities including debts and anticipated expenses.

It shows the overall financial health of our coworking space at the end of each period.

Our projected cash flow budget details incoming and outgoing cash flows, allowing us to anticipate our cash needs at any given time. This will help us effectively manage our finances and avoid cash flow problems.

The projected financing plan lists the specific financing sources we plan to use to cover our startup expenses.

The working capital requirement for our coworking space will be closely monitored to ensure we have the necessary liquidity to finance our daily operations, including lease payments, utilities, and salary payments.

The break-even point specific to our project is the level of occupancy or membership needed to cover all our costs, including startup expenses, and start making a profit.

It will indicate when our business will be profitable.

Performance indicators we will track include the occupancy rate of our coworking space, the average revenue per member, the liquidity ratio to assess our ability to cover financial obligations, and the return on investment to measure the effectiveness of our capital invested in the project.

These indicators will help us evaluate the financial health and overall success of our coworking space.

If you want to know more about the financial analysis of this type of activity, please read our article about the financial plan for a coworking space .

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Coworking Space Business Plan Essentials

By dropdesk

Published: July 11, 2019

Before we break down the various aspects that comprise your coworking space business plan, it’s crucial to understand the advantages of such an environment.

If you’re a freelancer, consultant, remote employee, or a professional without an office, you will benefit from a space consisting of like-minded individuals who will motivate you with their interaction.  Also, working alone from home comes with an array of disadvantages because it’s directly linked to the many pitfalls of workplace isolation .

Furthermore, coworking spaces are a primary catalyst for human approach designs, which foster collaboration, innovation, and productivity. There are seemingly an infinite number of reasons to start your own coworking community , but ‘wanting’ and ‘doing’ are entirely different things.  Bringing your vision to life necessitates producing a well-structured and insightful business plan.

Coworking Space Business Plan Check List

1. finding the right fit – literally.

We are not talking about the importance of finding the right culture fit for your community in this section – instead, we’re discussing how crucial it is to purchase an optimally sized space that comfortably fits all the members of your community and helps you flourish as an owner. 

A workplace between 1,000-3,000 square feet is likely too small and makes covering the cost of rent/mortgage, operations, and personnel completely unfeasible.  Conversely, anything over 5,000 square feet, with a reasonably high occupancy rate, usually generates larger profit margins. 

Small coworking spaces of 70-80 seats and more sizeable locations with a few hundred seats are ideal for earning back more than your operational costs.

2. Create A Vision That Scales

You need a definitive purpose for your coworking space. Otherwise, you will have a bunch of random people (if you’re lucky) showing up to work without any rhyme or reason. The best coworking spaces have a defined set of values that draws in each community member.

Whether you aim to cross-finance your own Startup, build your own community, or start a national chain of coworking spaces, knowing ‘why’ acts as a  guideline to your business strategy. As your coworking business grows, strategy amendments are a must, but a defined vision ensures those changes are done with a purpose, rather than pulling you in too many directions. 

In this particular vein, we suggest reading the story of WeWork’s pitch deck .  The read serves as a valuable anecdote for those looking to start their own coworking business .  Despite experiencing exponential growth, WeWork never lost sight of their original vision.

3. Location, Location, Location

You may become enticed by the low cost of rent for a given piece of real estate, but before signing the dotted line, ask yourself  – why is it such a steal? Where is the space located?  If it’s in an area that guarantees an inconvenient commute for your potential community members, then look elsewhere – despite its attractive asking price. 

Filling up desks in your coworking space is much more likely in a central location. The rest of your plan could be sound and logical enough to make Mark Cuban blush, but a poor choice of location will hamstring your coworking business before it starts.  You will need an 80%-plus occupancy rate to succeed, and that won’t happen if your building is in a remote area.

4. Research Industry Insights

Gain a thorough understanding of how much the coworking industry is growing in your region, city, country, state, or province. 

For instance, did you know that coworking spaces accounted for almost 10% of real estate leased in Manhattan in the first half of 2018?  Sure, that’s only valuable for coworking professionals in Manhattan, but try to extract similar statistics from the coworking landscape in your region.

Correspond with other nearby coworking space managers and see what kind of stats and insights they’ll provide.  Or, ask questions on Google and LinkedIn coworking group forums. Lastly, there are surveys with valuable data about coworking growth that are sure to provide invaluable nuggets of information. 

5. Knowing Your Intended Community

What kind of occupants/community members are you targeting, and what is their ideal coworking environment?  For example, many coworking facilities offer premium, affordable spaces for freelancers; others, cater to big businesses – while many communities focus on smaller teams. 

You must decide whether you can work harmoniously alongside your city’s business infrastructure through leveraged partnerships, or if you can operate an independent space open to all professionals. The more specific you are about your ideal community member, the easier it is to plan pricing, marketing, amenities, and location.

6. Your Coworking Financial Plan

A financial plan is one of the most integral aspects of establishing your coworking space. Here’s what you need to consider:

• Capital  needed to get to get started
• Areas your money will be spent
• Obtaining the remaining capital needed to get started
• The date you expect to become profitable
• Expected total monthly revenue
• Potential setbacks
• Exit strategy

Of course, deciphering these numbers isn’t an exact science – but base your plan on realistic estimations based on data and research. Provided you’re trying to entice investors, you will need a robust financial plan.

7. Finding Balance in Your Price Model

Charging too much per desk will lead to a barren community that lasts about as long as it takes Usain Bolt to run 100 meters.  Also, charging too little makes it extremely challenging to turn a profit, no matter how many members fill up your coworking space—and too low of a price also makes potential members think your offer is too good to be true.

Charge what your services are worth, within reason.  If you’re providing premiere services, community members won’t mind paying a premium, if they reap the benefits – such as earning more money and being more productive.

8. Build Your Dream Team

Sure, running a business means DIY as much as humanly possible and this approach mitigates operational costs. Most people aren’t expert in everything, so you may need a reliable, efficient team to turn your coworking space into a profit-turning machine. 

Generally, coworking spaces require coworking software experts, an operations manager, and a marketing person.  If you are an expert in either of these fields, do them on your own, but either assemble an in-house team or hire freelancers to fill-ins the rest of the gaps. 

Lastly, contemplate potential real estate partners, investors, and other staff members that will help increase your coworking space’s value and overall growth. 

9. Develop A Coworking Marketing Strategy

Your coworking space isn’t just an environment for highly driven professionals to execute, innovate, and thrive—it’s also a product.

And like any product, a nuanced coworking marketing strategy is crucial when selling your business to your target market.  Depending on your budget, you can run advertisements in the local news or niche magazines that are relevant to your audience.  In addition, since it’s 2019, a professionally designed website and savvy social media presence are both marketing and advertising necessities. 

Brand advocacy from existing community members is extremely effective as well since consumers tend to trust the words of ‘real’ people over traditional advertising.  So, offer incentives to members who refer peers to your coworking space. Since 49% of consumers depend on influencer recommendations, utilizing industry-specific influencers is another marketing method worth considering.

Consider hosting a booth at industry fairs, where you can provide a litany of marketing materials to passers-by. Remember, no matter what you do, it should highlight your main message , so there’s always a streamlined focus to every single one of your marketing tactics. 

10. Become Niche Focused

Without a niche, your coworking business is overly generic, making it entirely more challenging to figure out a quality business plan. Finding your niche requires a myriad of research to decide what will differentiate your coworking community from other businesses in the industry.

If your competitors cater too much on one type of worker, you should focus your services on the individuals they neglect. Assess what everyone else is doing and discover that profitable segment of the market other communities have yet to address with their services. 

Need some inspiration?  Google was initially just a search engine using links to rank the relevance of individual pages on the web.  In 2019, while the search engine is still the king of its niche, it’s grown into a worldwide superpower offering a smorgasbord of other services including mail, calendars, maps, and phones. Google only grew into the massive entity it is today because it tapped into a lucrative niche. 

Conclusion: Do You Want to Run a Coworking Space?  It’s Time to Start Planning

Your coworking space isn’t going to build itself.  It is time to start planning – equipping yourself with solutions that will transform your real estate into a living, breathing coworking space, such as Become A Host program.

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Home » Real Estate » Coworking Space

How to Start a Coworking Space [Business Plan]

A coworking space business rents or leases fully furnished office spaces on a part-time or as-needed basis to a myriad of businesses. Coworking space companies also provide virtual office and conference room leasing options. It will amaze you to note that for as little as $49.99 a month, anyone can work on Wall Street, many thanks to the coworking space concept.

The rising trend of the virtual office, which effectively functions as a high-cost PO box, is one of the services offered by the $2.4-billion Serviced Office Leasing (SOL) industry. The global coworking space market size is expected to grow from $7.97 billion in 2020 to $8.14 billion at a compound annual growth rate (CAGR) of 2.1 percent.

By 2030, it is predicted that 30 percent of all commercial real estate will be a flexible workspace, while flexible working will be worth USD 10 trillion+ to the economies of 16 leading countries alone.

Steps on How to Start a Coworking Space Business

1. conduct market research.

If you are considering starting a coworking business, you would need reliable market research to be able to maximize profits from the business. The first step in the market research process is to develop market-based research questions in line with your overall business goal and objective.

In this regard, you should source information that will help you maximize your business, show you what your potential market will be looking for from a coworking space, and also help you operate your coworking space business with less stress.

a. Who is the Target Market for Coworking Space Business?

• Startups and budding entrepreneurs
• Established entrepreneurs
• Freelancers
• Contractors
• Consultants
• Researchers

b. Is Coworking Space a Profitable Business?

Yes, coworking space is a profitable business , but according to AndCards, only 43 percent of coworking spaces are currently profitable. With new coworking spaces opening up nearly every day, it might take them a few months to start making profit.

Although, the report further stated that after two years in operation, more than 70 percent of all coworking spaces become profitable.

c. Are There Existing Niches in the Industry?

Yes, there are existing niche ideas when it comes to coworking businesses because a coworking space is at liberty to define the type of people they want to accommodate in their facility. Here are some of the niche ideas;

• Conventional/Open
• High-End/Full-Service
• Corporate/Professional
• Private Workspaces
• Minimal/Bare Bones
• Shared Space/Subleased
• Industry-Specific/Specialized
• Venture/Accelerated
• Meeting Space
• Virtual Offices

d. Who are the Major Competitors?

• Knotel (Newmark Group)
• District Cowork
• Make Office
• Industrious Office
• Serendipity Labs
• SomeCentral
• Talent Garden
• Novel Coworking
• CommonGrounds

e. Are There County or State Regulations or Zoning Laws for Coworking Space Business?

No, there are no county or state regulations or zoning laws for coworking space business for now, but players in this industry are expected to work with the existing regulations or zoning laws governing similar businesses in the county where their business is domiciled.

f. Is There a Franchise for Coworking Space Business?

Yes, there are franchise opportunities for the coworking space business. They include;

• Office Evolution
• International Workplace Group

g. What Do You Need to Start a Coworking Space Business?

• A Feasibility Report
• Business and Marketing Plans
• Business Licenses and Permits
• Furnished and Equipped Coworking Space (Office Facility)
• EIN (Employer Identification Number)/Federal Tax ID Number.
• A Corporate Bank Account

Choose a Memorable Business Name

When looking to start a business, before you can begin to file the necessary documents with the constituted authorities or start your website, it is necessary that you come up with a name that you will be recognized with. It is essential that the name you come up with can easily be pronounced, is unique and easily memorable.

Some of the catchy business name ideas suitable for a coworking space business are;

Creative Coworking Space Business Name ideas

• Corporate Network© Coworking Space, Inc.
• Generation Next® Coworking Space, LLC
• Startup Solutions® Coworking Space, Inc.
• Future Solutions® Shared Office Space, Inc.
• Smart Office™ Coworking Space, Inc.
• Business Base™ Coworking Space, LLC.
• Jenny Blank© Shared Office Space, LLC
• The Arena® Coworking Space, Inc.
• Ocean View© Coworking Space, Inc.
• Central Park© Coworking Space, Inc.
• Fussion® Coworking Space, LLC
• Profitable Venture® Coworking Space, LLC
• ED Mark and Co™ Coworking Space, LLC
• Work Plug© Coworking Space, Inc.
• Pentagon Group® Coworking Space, Inc.
• Your World™ Coworking Space, Inc.
• Vision Board™ Coworking Space, Inc.
• Newton Joe and Co© Coworking Space, Inc.
• Future Hub® Coworking Space, LLC
• Blue Sky™ Coworking Space, Inc.

Register Your Business

A. what type of business structure is best for a coworking space.

Even though there are several options when it comes to the business structure of a coworking space business, the one that most players in this line of business consider is an LLC. It is common to consider an LLC because providers want to protect themselves from lawsuits.

Please note that an LLC will need an EIN if it has employees or if it will be required to file any of the excise tax forms listed below. Most new single-member LLCs classified as disregarded entities will need to obtain an EIN.

b. Steps to Form an LLC

• Choose a Name for Your LLC.
• File Articles of Organization.
• Choose a registered agent.
• Decide on member vs. manager management.
• Create an LLC operating agreement.
• Comply with other tax and regulatory requirements.
• File annual reports.

c. What Type of License is Needed to Open a Coworking Space Business?

• General Business License
• Zonal Permits
• Signage Permit
• Operational State Facility Inspections for your facility

d. What Type of Certification is Needed to Start a Coworking Space Business?

You don’t need any certification to start a coworking space business.

e. What Documents are Needed to Open a Coworking Space Business?

These are some of the basic legal documents you need to legally run a coworking space in the United States of America;

• Business and liability insurance
• Federal Tax Payer’s ID
• State Permit and Building Approval
• Certificate of Incorporation
• Business License
• Business Plan
• Employment Agreement (offer letters)
• Operating Agreement for LLCs
• Insurance Policy
• Online Terms of Use
• Online Privacy Policy Document
• Contract Document
• Company Bylaws
• Memorandum of Understanding (MoU)

f. Do You Need a Trademark, Copyright, or Patent?

If you are considering starting a coworking space business, usually you may not have any need to file for intellectual property protection or even trademark. This is because the nature of the business makes it possible for you to successfully run it without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties.

Cost Analysis and Budgeting

A. how much does it cost to start a coworking space business.

The startup cost for a coworking space business is not uniform. But basically, it can range from as low as $10,000 to lease and furnish an office space to one million USD and more.

b. What are the Costs Involved in Starting a Coworking space business

• The total fee for registering the business in the United States of America – $750.
• Legal expenses for obtaining licenses and permits as well as the accounting services – $1,200.
• Marketing promotion expenses – $1,500
• The cost for hiring a business consultant (writing of business plans inclusive) – $4,500.
• Insurance coverage at a total premium – $2,400.
• The cost of accounting software, CRM software, and Payroll Software – $1,500
• The cost for leasing a facility (long-term lease agreement) – $75,600.
• The cost for facility remodeling and installations – $10,000.
• Other start-up expenses including stationery – $500
• Phone and utility deposits will cost – ($3,500)
• Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $20,000
• The cost for the purchase of office furniture and gadgets (Computers, Printers, Telephone, TVs, tables and chairs et al) – $10,000.
• The cost of launching an official website – $600
• Miscellaneous – $2,500

c. What Factors Determine the Cost of Opening a Coworking Space Business?

• The size of coworking space
• The choice of the office location
• The required licenses and permits
• The cost of hiring and paying a business consultant and attorney
• The cost for branding, promotion, and marketing of the business
• The cost for furnishing and equipping the coworking facility
• The cost for insurance policy covers
• The cost for registering the business
• Cost of recruiting and training your staff
• The cost of opening the business (Party)

d. Do You Need to Build a Facility? If YES, How Much Will It Cost?

It is not compulsory to build a new facility for your coworking space business, but if you have the required finance, you may go ahead. The truth is that building or reconstructing a facility will help you come up with a facility that will perfectly fit into your overall business goals and vision.

e. What are the Ongoing Expenses of a Coworking space business?

• Electric bills
• Utility bills (phone bills, signage, and software renewal fees et al)
• Salaries of employees
• maintenance
• Marketing costs

f. What is the Average Salary of your Staff?

• Chief Operating Officer (Owner) – $60,000 Per Year
• Facility Manager – $45,000 Per Year
• Admin and HR Manager – $40,800 Per Year
• Marketing and Sales Executive – $35,000 Per Year
• Customer Care Executive/Front Desk Officer -$30,000 Per Year
• Cleaners – $26,000 Per Year
• Security Guards – $24,500 Per Year

g. How Do You Get Funding to Start a Coworking space business

• Raise money from personal savings and sale of personal stocks and properties
• Raise money from investors and business partners
• Sell shares to interested investors
• Applying for a loan from your bank/banks
• Applying for business grants and seed funding from donor organizations, and angel investors
• Source for soft loans from your family members and your friends.

Write a Business Plan

A. executive summary.

Blue Sky™ Coworking Space, Inc. is a fully registered and licensed coworking business that will be located in Midtown Manhattan, New York City U.S. and with offices in Los Angeles, California, Houston, Texas, Boston Massachusetts, and Orlando, Florida. We will provide well-equipped and secured coworking facilities where entrepreneurs, startups, freelancers, developers, businesses, and teams can meet to work independently, as well as socialize and collaborate on projects.

b. Products and Service

• Lease or rent fully furnished workspaces
• Lease or rent virtual offices
• Lease or rent conference and meeting rooms
• Provide telecommunication services to leases
• Provide other business services to leases

c. Mission Statement

Our mission is to develop a highly successful and profitable coworking space business that is not only a work office; but a space where people can meet to work independently, as well as socialize and collaborate on projects.

Vision Statement

Our vision is to become the number one coworking space provider in the whole of New York and to have coworking office spaces in key cities all across the world.

d. Goals and Objectives

The goals and objectives of our coworking space business are to help startups, entrepreneurs, freelancers and contractors et al who can’t or don’t want to commit to a long term lease have a space to work from and yet enjoy all the benefits of a standard office facility in a highbrow business district.

e. Organizational Structure

• Chief Operating Officer (Owner)
• Facility Manager
• Marketing and Sales Executive
• Customer Care Executive/Front Desk Officer
• Security Guards

Marketing Plan

A. swot analysis.

• Centrally located coworking space facility
• A well-equipped and furnished coworking facility
• Experience, trained, and certified professionals
• Excellent customer testimonials
• Not enough finance to build our facility
• We may initially struggle to gain revenue
• Inability to attract high-paying clients

Opportunities:

• A growing number of startups in the United States that don’t want to lease their own office space
• Online market, new services, new technology, and of course the opening of new markets.
• Favorable government policies and trends (work virtually or from home).
• Loans diminish profitability until they are paid off
• The first year will be financially tight while we gain customers and pay off loans
• Competition in the area could increase
• Management of employees requires time, money, and efforts
• Lack of capital to keep going if the business model doesn’t work
• Economic downturn

b. How Do Coworking Space Business Make Money?

• Leasing or renting fully furnished workspaces
• Leasing or renting virtual offices
• Leasing or renting conference and meeting rooms
• Providing telecommunication services to leases
• Providing other business services to leases

c. Payment Options

• Payment via bank transfer
• Payment via credit cards
• Payment via online bank transfer
• Payment via check
• Payment via mobile money transfer
• Payment via bank draft

d. Sales & Advertising Strategies

• Introduce your coworking space business by sending introductory letters to startups, entrepreneurs, freelancers, developers, researchers, and contractors in and around your city
• Advertise your coworking space business on national dailies, local TV, and radio stations
• Promote your coworking space business online via your official website and all available social media platforms
• Adopt direct mailing coupon marketing approach to attract investors
• Position your signage/Flexi banners at strategic places

Financial Projection

A. how much should you charge for your service.

Coworking services                                    Price

Day pass                                                     $45-$55 per day

Part-time desk – per day                          $35-$45 per day

Part-time desk – monthly membership   $350-$400 per month

Permanent desk                                          $650-$750 per month

Private office: up to 20 staff                       $160-$210 per square meter per month

Private office: 20-50 staff                           $150-$200 per square meter per month.

b. How Much Profit Do Coworking Space Business Owners Make a Year?

It depends, but the available report shows that on average, a successful coworking space can earn somewhere from $500,000 a year to over a million USD a year. Some of the leading coworking space businesses make far more than $5 million in profits in a given fiscal financial year.

c. What Factors Determine the Amount of Profit to Be Made?

• The size, type, and location of the coworking facility
• The facilities and extra services offered by the coworking space company
• The management style of the coworking business
• The business approach of the coworking business
• The advertising and marketing strategies adopted by the coworking business.

d. What is the Profit Margin of a Coworking Space Business?

A small-scale co-working space will typically make around 10 percent a month as profit. But a coworking company with spaces able to accommodate between 10 and 50 people or more per time will have a profitability rate of about 40 percent. The bottom line is that the more people the coworking space can accommodate, the more profitable they become.

e. What is the Sales Forecast?

Below is the sales forecast for a coworking space business it is based on the location of the business and other factors as it relates to such startups in the United States;

First Fiscal Year: $750,000

Second Fiscal Year:  $1.2 million

Third Fiscal Year: $1.8 million

Set Up your Office

A. how do you choose a perfect location for coworking business.

• The demography of the location especially as it relates to startups and small businesses
• The purchasing power of businesses and the residents of the location
• Accessibility of the location
• The number of coworking businesses in the location
• The local laws and regulations in the community/state
• Traffic, parking and security et al

b. What State and City are Best to Open a Coworking Space Business?

• New York City, New York
• Los Angeles, California
• San Francisco, California
• Washington DC
• Chicago, Illinois
• Dallas-Fort Worth, Texas
• Atlanta, Georgia
• Boston, Massachusetts

c. What Equipment is Needed to Operate a Coworking Space Business?

You should be prepared to purchase relevant software apps . You will need laptops, internet, and Wi-Fi facility, telephone, printers, and office furniture ( chairs , tables, and shelves) and kitchen utensils (tea kettle, toaster, microwave oven, and fridge et al) among others and all these can be gotten as fairly used.

Hire Employees

When it comes to hiring employees for a standard coworking space business, you should make plans to hire a competent chief executive officer (you can occupy this position), facility manager, marketing and sales executive, customer service executives, and security guards.

Launch the Business Proper

Most coworking businesses prefer to organize an opening party to officially launch the business. You can choose to do a soft opening if you are operating on a low budget or you can go for a grand opening party.

With a proper launching of the coworking space business, you will be able to officially inform people in your city that your coworking space is open for business .

a. What Makes a Coworking Space Business Successful?

• Choose a good location and facility to launch the business
• Hire only competent, hardworking, and trustworthy staff
• Be deliberate with equipping and furnishing the coworking facility
• Encourage the use of word of mouth to promote your coworking space business
• Leverage on all available online and offline platforms to promote your coworking space business

b. What Happens During a Typical Day at a Coworking space business?

• The business is open for the day’s work
• The office is cleaned and ready for clients.
• Clients come to work
• Marketing/website upkeep is carried out
• Other administrative duties are carried out
• The business is closed for the day.

b. What Skills and Experience Do You Need to Build a Coworking space business?

• Excellent facility management skills
• Excellent interpersonal skills
• Excellent customer services skills
• Business management skills
• Bargaining skill
• Work experience in the facility management industry
• Work experience in a coworking space business
• Experience in managing people
• Experience in business administration

More on Coworking Space

Coworking Space Business Plan [Sample Template]

By: Author Tony Martins Ajaero

Home » Business ideas » B2B Industry » Coworking Space

Are you about starting a coworking space business ? If YES, here is a detailed sample co-working space business plan template & feasibility report you can use for FREE .

Entrepreneurs always wish to cut overhead cost as low as they can and still maintain professionalism in their businesses. One of the easiest ways of cutting overhead cost is by renting a coworking space. With the increase in demand for co-working spaces, any investor that decides to start his or her own coworking space business is sure going to make good returns on his or her investment.

A Sample CoWorking Space Business Plan Template

1. industry overview.

Co-working space business falls under the serviced office leasing (SOL) industry and operators in this industry rent or lease fully furnished office space to businesses on a part-time or as-needed basis.

The serviced office leasing (SOL) industry also provides virtual office and conference room leasing options to their clients. It is important to state that firms that provide conventional commercial leasing options are not part of the serviced office leasing (SOL) industry.

For $49.99 a month, anyone can work on Wall Street. The rising trend of the virtual office, which effectively functions as a high-cost PO box, is one of the services offered by the $2.4-billion Serviced Office Leasing (SOL) industry.

If you a close observer of the Serviced office leasing (SOL) industry, you will agree that the industry struggled during the recession when corporate profit declined and businesses closed shops . On the other hand, as the economy recovered, the industry experienced an upsurge in demand for its services.

Going forward, the revenue generated by players in this industry will continue to grow as the number of telecommuters in the workforce increases.

The Serviced office leasing (SOL) industry is indeed a growing industry and pretty much active countries like the united states, Japan, Singapore, Switzerland, United Kingdom and United Arab Emirates. Statistics has it that in the United States of America alone, there are about 781 licensed and registered companies in this industry, employing about 3,358, and the industry rakes in $2bn annually.

The industry is projected to continue to grow at 12.7 percent rate going forward. Regus PLC has the dominant market share in this industry. A recent publication released by IBISWorld shows that the Serviced office leasing (SOL) industry is in the growth stage of its life cycle.

The report projected that industry value added, which measure’s the industry’s contribution to the economy will raise at an estimated average annual rate of 7.5 percent from 2011 to 2022. The report further stated that GDP will grow at an annualized rate of 2.2 percent during the same period, indicating that the industry is growing faster than the economy as a whole.

Businesses are increasingly turning to industry companies to rent or lease workspaces, including fully furnished offices, virtual offices and conference rooms. Renting or leasing office space is a cost-effective alternative to buying commercial property.

One of the major reasons why people subscribe to co-working spaces is because they want to maintain a business address in a high – profile business district at the lowest possible cost.

So, if your intention is to start a coworking space business and also to maximize profits, then you must ensure that your lease office facility in a high – profile business district. It will make it easier for you to market and attract clients. It is expensive to lease office facility in such areas, but you stand the chance of recouping your investment and also making profits.

From all available statistics, it is safer to say the Serviced office leasing (SOL) industry is growing steadily despite the competitive nature of the industry. One thing is certain, if the offices you offer for rent are well positioned, you have the required business skills, and business networks, you are likely not going to struggle to compete in the Serviced office leasing (SOL) industry.

The serviced office leasing (SOL) industry is still open to any aspiring entrepreneur who has the startup capital to start his or her own co-working space business. As a matter of fact, it was projected that over the next five years, new technology will continue to emerge that will make it easier for more players to come into the industry hence increasing the competition in the industry.

2. Executive Summary

Monica Donavan® Co-Working Space Rentals, Inc. is a registered real estate business. We have been able to secure a standard and well – positioned facility in a central and busy district in Brooklyn Park – Minnesota.

We are a co – working space company that is set to compete in the fast – growing shared office rental industry not only in Brooklyn Park – Minnesota, but also throughout the United States market because we intend opening our co – working facilities in key cities across the United States.

Monica Donavan® Co-Working Space Rentals, Inc. will offer co-working space facilities to entrepreneurs and investors who may not want to shoulder the responsibilities of owning a standard office facility. Our business goal is to become one of the leading co-working space rental operators in the United States and we will make sure that we do all we can to compete favorably in the industry.

Our workers are going to be selected from a pool of certified, creative and highly experienced workers in and around Brooklyn Park – Minnesota. We will make sure that we take our workforce through the required trainings that will position them to meet the expectations of the company and to compete with leading co-working space operators in the United States.

At Monica Donavan® Co-Working Space Rentals, Inc., our client’s best interest will always come first, and everything we do will be guided by our values and professional ethics. We will ensure that we hold ourselves accountable to the highest standards by meeting our client’s needs precisely and completely.

Monica Donavan® Co-Working Space Rentals, Inc. is owned by Monica Donavan and other investors (shareholders).

3. Our Products and Services

Monica Donavan® Co-Working Space Rentals, Inc. was established with the aim of maximizing profits in the serviced office leasing (SOL) industry as a co – working space operator. We want to compete favorably with the leading co – working space operators in the United States which is why we have a competent team that will ensure that our facility meets and even surpass our customers’ expectations.

We will work hard to ensure that Monica Donavan® Co-Working Space Rentals, Inc. is not just accepted in Brooklyn Park – Minnesota, but also in other cities in the United States of America where we intend opening our chains of co – working  facilities. Our facility and services are listed below;

• Lease or rent fully furnished workspaces
• Lease or rent virtual offices
• Lease or rent conference and meeting rooms
• Provide telecommunication services to leases
• Provide other business services to leases

4. Our Mission and Vision Statement

• Our vision is to be the standard bearer wherever we have our co – working space facility throughout the United States of America.
• Our mission is to provide a standard co-working space that can attract some of the leading entrepreneurs who may not want to own their personal office facility.
• We want to build a co-working space business that can favorably compete with other leading brands in the serviced office leasing (SOL) industry in the United States.

Our Business Structure

Monica Donavan® Co-Working Space Rentals, Inc. is a co-working space company that intend starting small in Brooklyn Park – Minnesota, but hopes to grow big in order to compete favorably in the industry in the United States. We are aware of the importance of building a solid business structure that can support the kind of world class business we want to own.

At Monica Donavan® Co-Working Space Rentals, Inc., we will ensure that we hire people that are qualified, hardworking, creative, customer centric and are ready to work to help us build a prosperous business.

As a matter of fact, profit-sharing arrangement will be made available to all our senior management staff and it will be based on their performance for a period of five years or more as agreed by the board of trustees of the company. In view of the above, we have decided to hire qualified and competent hands to occupy the following positions;

• Chief Executive Officer
• General Manager

Human Resources and Admin Manager

• Sales and Marketing Executive

Facility Manager

Client Service Executive

5. Job Roles and Responsibilities

Chief Executive Officer – CEO:

• Increases management’s effectiveness by recruiting, selecting, orienting, training, coaching, counseling, and disciplining managers; communicating values, strategies, and objectives; assigning accountabilities; planning, monitoring, and appraising job results
• Creating, communicating, and implementing the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
• Responsible for fixing prices and signing business deals
• Responsible for providing direction for the business
• Responsible for signing checks and documents on behalf of the company
• Evaluates the success of the organization
• Reports to the board

General Manager:

• Serve as project manager of the organization; works directly with employees
• Develops strategic plan by studying the trends in the serviced office leasing (SOL) industry and financial opportunities; presenting assumptions; recommending objectives.
• Accomplishes subsidiary objectives by establishing plans, budgets, and results measurements
• Maintains quality service by establishing and enforcing organization standards.
• Coordinate employee efforts, and facilitate communications between management and the workforce
• Ensures that the organization works in line with international best practices.
• Model demographic information and analyze the volumes of transactional data generated by customer
• Identifies development opportunities; follows up on development leads and contacts; participates in the structuring and financing of projects
• Responsible for handling business research, market surveys and feasibility studies
• Create new markets cum businesses for the organization
• Empower and motivates the sales team to meet and surpass agreed targets

Sales and Marketing Manager

Accountant/Cashier:

• Responsible for preparing financial reports, budgets, and financial statements for the organization
• Provides managements with financial analyses, development budgets, and accounting reports
• Performs cash management, general ledger accounting, and financial reporting for one or more properties.
• Responsible for developing and managing financial systems and policies
• Responsible for administering payrolls
• Ensuring compliance with taxation legislation
• Handles all financial transactions for the organization
• Serves as internal auditor for the organization
• Responsible for making sure that our co-working space meet the needs of the people that work in them
• Overseeing services including security, parking, cleaning, catering, technology and so on
• Supervising multi-disciplinary staff including cleaning, maintenance, grounds and security
• Ensuring that basic facilities such as water and heating, are well-maintained
• Ensuring that facilities meet government regulations and environmental, health and security standards
• Overseeing building projects, renovations or refurbishments
• Welcomes clients and potential clients by greeting them in person or on the telephone; answering or directing inquiries.
• Ensures that all contacts with clients (e-mail, walk-In center, SMS or phone) provides the client with a personalized customer service experience of the highest level
• Through interaction with clients on the phone, uses every opportunity to build client’s interest in the company’s products and services
• Consistently stays abreast of any new information on the organizations promotional campaigns to ensure accurate and helpful information is supplied to clients when they make enquiries

6. SWOT Analysis

Monica Donavan® Co-Working Space Rentals, Inc. engaged the services of a core professional in the area of business consulting and structuring to assist our organization in building a well – structured co-working space business that can favorably compete in the serviced office leasing (SOL) industry in the United States.

Here is a summary from the result of the SWOT analysis that was conducted on behalf of Monica Donavan® Co-Working Space Rentals, Inc.;

Our world – class facility is indeed a plus to the business. Another positive that we have is the fact that we have a well – balanced team running the business.

Part of what may likely hinder us from optimizing our potentials in this business is that we may not be able to raise capital to acquire choice properties that can attract high – paying clients for our co – working space.

• Opportunities:

In this age and time where entrepreneurs are looking for means to cut down startup expenses, a business such as co-working space facility comes in handy. The rising popularity of shared office spaces is driving industry growth and influencing workplace transformations. The fact that more people are embracing entrepreneurship means that there are great opportunities for us.

A major threat to our business is the rise of the concept of virtual office. Aside from the fact that it is cheaper, most virtual office rental businesses tend to provide communication and physical address services without bearing the financial burden to maintain the office facility.

7. MARKET ANALYSIS

• Market Trends

A major trend shows that workplace transformations use tech and design to maximize office space and increase productivity, providing for cost-savings from a bottom-up perspective. Co-working spaces are designed to reduce the square footage a company needs per employee.

A recent trend shows that some operators in the industry are scaling the co-working model to fit the operational and cultural needs of service-based industries.

The incentives of workplace transformations are twofold. The first is cost-effectiveness while the second, less tangible yet arguably more impactful incentive is the commoditization of modern workplace culture as characterized by Silicon Valley startups.

Even though cost-savings have long-been the most obvious incentive of co-working spaces, the perk of enabling large corporations to rebrand themselves in a piecemeal way is turning heads among Fortune 500 companies operating in the most traditional of industries.

Lastly, long term, the cost-efficiency of workplace transformations will likely remain the primary incentive. Reducing square footage per employee while maintaining or even boosting employee satisfaction is a win-win, no matter the industry.

However, the cultural incentives of workplace transformations will continue to expand and evolve with the business environment itself.

8. Our Target Market

Before starting our co – working space rental business in Brooklyn Park – Minnesota, we conducted a thorough market survey and feasibility studies and we are certain that there are loads of budding entrepreneurs who need small office spaces to run their business.

In view of that, we have created strategies that will enable us reach out to various groups of people who we know will need our facilities especially service – based business.

Our competitive advantage

Because of the grow competition in this line of business, there is an increasing degree of related business activities, with big players dominating the market.

Our competitive advantage is anchored on the state of the art office facility that we have. So also, we have a team of certified, creative and highly trained workers. Aside from the synergy that exists in our carefully selected workforce, our services will be guided by international best practices in the industry.

Another strength that counts for us is the location of our co-working space; they are located in one of the highly suitable areas for such business in Brooklyn Park – Minnesota.

Lastly, all our employees will be well taken care of, and their welfare package will be among the best within our category in the industry. It will enable them to be more than willing to build the business with us and help deliver our set goals and objectives.

9. SALES AND MARKETING STRATEGY

• Sources of Income

Monica Donavan® Co-Working Space Rentals, Inc. is established with the aim of maximizing profits in the serviced office leasing (SOL) industry and we are going to ensure that we do all it takes to meet and surpass the expectations of our clients.

Monica Donavan® Co-Working Space Rentals, Inc. will generate income by offering the following facility and services;

10. Sales Forecast

One thing is certain, there would always be entrepreneurs who need to cut cost of starting the business hence the need to rent a small office space in a shared office facility.

We are well positioned to take on the available market in the industry and we are quite optimistic that we will meet our set target of generating enough income/profits from the first six months of operation and grow our business to enviable heights.

We have been able to examine the shared office leasing (SOL) market, we have analyzed our chances in the industry and we have been able to come up with the following sales forecast. Below are the sales projections for Monica Donavan® Co-Working Space Rentals, Inc. It is based on the location of our facility and of course our target market;

• First Fiscal Year:  $550,000
• Second Fiscal Year:  $950,000
• Third Fiscal Year:  $2 million

N.B : This projection was done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown and there won’t be any competitor offering same facility as we do within same location. Please note that the above projection might be lower and at the same time it might be higher.

• Marketing Strategy and Sales Strategy

Our marketing strategies will be directed towards achieving specific objectives that support the strategic goals of the organization. The truth is that all that we do will be geared towards creating new market channels, increasing sales and our market share.

Our unique selling proposition is that we are well positioned, we offer a state of the art facility and people can easily access our facility. Monica Donavan® Co-Working Space Rentals, Inc. is set to make use of the following marketing and sales strategies to attract clients;

• Advertise our co-working space business on national dailies, local TV and radio station
• Promote our co-working space facilities online via our official website and all available social media platforms
• Introduce our business by sending introductory letters alongside our brochure to budding entrepreneurs, established entrepreneurs and key stake holders in Brooklyn Park – Minnesota
• Print out fliers and business cards and strategically drop them in offices, sport facilities, libraries, public facilities and train stations et al.
• Position our signage / flexi banners at strategic places in and around Brooklyn Park – Minnesota

11. Publicity and Advertising Strategy

We have been able to work with our brand and publicity consultants to help us map out publicity and advertising strategies that will help us walk our way into the heart of our target market.

We are set to become the number one choice for entrepreneurs and business people in the whole of Brooklyn Park – Minnesota and other cities in the United States of America where we intend opening our shared office facilities which is why we have made provisions for effective publicity and advertisement of our business.

Below are the platforms we intend to leverage on to promote Monica Donavan® Co-Working Space Rentals, Inc.;

• Place adverts on both print (newspapers and real estate magazines) and electronic media platforms
• Sponsor relevant community based events / programs
• Leverage on the internet and social media platforms like; Instagram, Facebook, twitter, YouTube, Google + et al to promote our  business
• Install our billboards in strategic locations all around Brooklyn Park – Minnesota
• Distribute our fliers and handbills in target areas
• List our co – working space business in local directories / yellow pages
• Advertise our coworking space facility in our official website and employ strategies that will help us pull traffic to the site.

12. Our Pricing Strategy

Our pricing system is going to be based on what is obtainable in the industry, we don’t intend to charge more and we don’t intend to charge less than what our competitors are charging their clients in Brooklyn Park – Minnesota.

• Payment Options

The payment policy adopted by Monica Donavan® Co-Working Space Rentals, Inc. is all inclusive because we are quite aware that different customers prefer different payment options as it suits them but at the same time, we will ensure that we abide by the financial rules and regulation of the United States of America.

Here are the payment options that Monica Donavan® Co-Working Space Rentals, Inc. will make available to her clients;

• Payment via bank transfer
• Payment via Point of Sale Machine (POS)
• Payment via online bank transfer
• Payment via check
• Payment via bank draft

In view of the above, we have chosen banking platforms that will enable our clients make payment for renting our co – working office facility without any stress on their part.

13. Startup Expenditure (Budget)

When it comes to calculating the cost of starting a coworking space facility business, there are some key factors that should serve as a guide.

The number of facilities needed to kick start the business and the size and location of the facility determines the total cost of setting up the business. Below are some of the basic areas we will spend our startup capital in setting up our co-working space rental business;

• The total fee for registering the business in the United States of America – $750.
• Legal expenses for obtaining licenses and permits – $15,500.
• Marketing promotion expenses (8,000 flyers at $0.04 per copy) for the total amount of – $10,000.
• The total cost for hiring Business Consultant – $5,000.
• The amount needed for the purchase of insurance policy covers (general liability, workers’ compensation and property casualty) coverage at a total premium – $30,800.
• The total cost for the purchase of accounting software, CRM software and Payroll Software – $3,000
• The total cost for leasing facility for the business – $450,000
• The total cost for facility remodeling to fit into the type of co – working space facility – $150,000
• Phone and utility deposits – $3,500
• Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $140,000
• The cost of launching a Website – $600
• Miscellaneous – $5,000

Going by the report from the market research and feasibility studies conducted, we will need about nine hundred and fifty thousand ($950,000) U.S. dollars to successfully set up a medium scale co-working space facility rental business in the United States of America.

Generating Funds/Startup Capital for Monica Donavan® Co-Working Space Rentals, Inc.

Monica Donavan® Co-Working Space Rentals, Inc. is a private business that is solely owned and financed by Ms. Monica Donavan and her partner. They do not intend to welcome any external business partner which is why she has decided to restrict the sourcing of the startup capital to 3 major sources.

• Generate part of the startup capital from personal savings
• Source for soft loans from family members and friends
• Apply for loan from the bank

N.B: We have been able to generate about $350,000 (Personal savings $200,000 and soft loan from family members $100,000) and we are at the final stages of obtaining a loan facility of $600,000 from our bank. All the papers and documents have been signed and submitted, the loan has been approved and any moment from now our account will be credited with the amount.

14. Sustainability and Expansion Strategy

The future of a business lies in the number of loyal customers that they have, the capacity and competence of their employees, their investment strategy and the business structure. If all these factors are missing from a business (company), then it won’t be too long before the business closes shop.

One of our major goals of starting Monica Donavan® Co-Working Space Rentals, Inc. is to build a business that will survive off its own cash flow without injecting finance from external sources once the business is officially running.

We know that one of the ways of gaining approval and winning customers over is to lease / rent our co – working space facility a little bit cheaper than what is obtainable in the market and we are prepared to survive on lower profit margin for a while.

Monica Donavan® Co-Working Space Rentals, Inc. will make sure that the right foundation, structures and processes are put in place to ensure that our staff welfare are well taken of. Our company’s corporate culture is designed to drive our business to greater heights and training and re-training of our workforce is at the top burner.

We know that if that is put in place, we will be able to successfully hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams.

Check List/Milestone

• Business Name Availability Check:>Completed
• Business Incorporation: Completed
• Opening of Corporate Bank Accounts: Completed
• Opening Online Payment Platforms: Completed
• Application and Obtaining Tax Payer’s ID : In Progress
• Securing a standard facility and reconstructing the facility to fit into the kind of facility we want to manage: Completed
• Application for business license and permit: Completed
• Purchase of Insurance for the Business: Completed
• Conducting Feasibility Studies: Completed
• Generating part of the start – up capital from the founders: Completed
• Writing of Business Plan: Completed
• Drafting of Employee’s Handbook: Completed
• Drafting of Contract Documents: In Progress
• Design of Logo for the business: Completed
• Printing of Promotional Materials: Completed
• Recruitment of employees: In Progress
• Purchase of the needed furniture, office equipment, software applications, electronic appliances and facility facelift : In progress
• Creating official website for the business : In Progress
• Creating Awareness for the business: In Progress
• Health and Safety and Fire Safety Arrangement : In Progress

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How To Build a Financial Model For a Coworking Space

• January 11, 2023

Every business needs a budget. Whether you want to understand what’s your breakeven , your valuation or create a financial model for your coworking business plan , you’ve come the right way.

In this article we’ll explain you how to create powerful and accurate financial projections for a coworking space business.

1. Forecast active members

The first thing you must do is to estimate the number of active members. They are a function of the members you acquire and retain over time. The number of members that leave is also known as churn:

Active members = new members – churn

We strongly recommend you create monthly forecasts. That way, you will be able to take account seasonality (customers tend to sign up to coworking offices more so post summer for instance).

Also, if you have different memberships instead, make an assumption on the breakdown between the different plans. For example, 80% of members would choose the “Basic” plan in average, and 20% the “Premium” plan.

Finally, you should assume a maximum number of active members as the coworking is constrained in capacity (you can’t have too many members or they might have to sit on the floor, which of course can’t happen).

Assuming a coworking space with 300 maximum members capacity, this is what you could obtain:

Coworking Financial Model

Download an expert-built 5-year Excel financial model for your business plan

2. Forecast revenue

As discussed in our article here , coworking spaces have 4 main revenue streams :

Membership revenue

• Renting conference and meeting rooms
• Virtual offices
• Events & workshops

The latter 3 can be grouped into 1 single “other revenue” stream in your coworking financial model. Indeed, it’s often low vs. membership revenue that represents ~80% of coworking spaces revenue in average as shown below.

Membership revenue is straightforward. Simply multiplying the number of active customers by the respective monthly fee, for each membership plan.

Other revenue

The 3 revenue streams that are conference and meeting rooms, virtual offices and events & workshops can be estimated as follows. For each:

• Make an assumption of the percentage of active members who purchase such product/service in a given month. For example, 10% of “Basic” users in average subscribe to a monthly virtual office service
• Assume a price per service. For example, the monthly virtual office service is $30 extra a month
• Multiply (1) and (2) by the respective active members

Finally, you should obtain a forecast of your revenues like the chart below. Of course, your revenue streams might be different. For example, renting conference rooms might be a bigger part of your income. This is purely for illustrative purposes to give you an idea of how revenue projections might look like.

3. Forecast expenses

In addition to startup costs you pay when you open a new coworking , there are a number of expenses you need to budget for to run the business. They are:

Premises is often the most substantial cost of owning and operating a coworking space. Like a residential or a commercial property, your initial cost depends on the location and the size of the area. So iIf you plan to rent the premises, you will want to look at the average commercial rent price per square foot. For instance, based on the publicly available commercial real estate leasing data, the average rent for office space in New York is around $80 per square foot .

Another considerable expense when setting up the co-working spaces is salaries for your employees. Ideally, the total cost will depend on the number of full-time and the part-time staff you need. As an example, the average WeWork Community Manager earns an estimated $72,945 annually .

Utility bills

Similar to salaries, utility bills will recur each month. The bills include the cost of water, electricity, and internet. Logically, the larger the coworking space, the higher the cost.

Marketing and paid advertising

You need to ensure proper marketing to attract reliable customers. Therefore, make sure you set aside a marketing and advertising budget. The total cost will depend on the medium used and the target audience .

Typically, marketing and paid advertising will cost more in the first 6 months of operation. Indeed, as you’re opening up the business, you’ll need a significant budget to promote your coworking office before you can rely on organic growth (word-of-mouth).

Cleaning services

You have to keep the offices clean to attract and retain customers. The janitorial services will depend on the office space and the additional services like lawn maintenance and kitchen. 

Bookkeeping fees

Like all other businesses, coworking space business has to ensure proper bookkeeping. This means using a bookkeeping software ( Quickbooks for example) as well as an accountant. Typically, you should expect to set aside $250 to $500 a month for bookkeeping.

Coworking spaces need to have a proper insurance in place before they do business. 

This includes the standard General Liability Insurance which shall protect you from property damage but also any medical costs that may arise if someone gets hurt in your premises. The average cost for a General Liability insurance for a coworking space is around $500 a month .

4. Build your P&L And Cash Flow

Once we have forecasted revenues and expenses, we can easily build the profit-and-loss (P&L) from revenues down to net profit . This will help you to visualise key metrics from your financial statements as shown below:

The cash flow statement, in comparison, needs to include all cash items from the P&L and other cash movements such as capital investments (also referred as “CapEx”), fundraising, debt, etc.

A cash flow forecast is vital as it will help you understand how much funding you should get, either from investors or the bank (SBA loan for example) to start and run your own coworking space.

In the chart below, we’re showing you an example of a typical costs a coworking office would incur, from rent to marketing and salaries:

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Why choose WeWork in Moscow

WeWork locations feature workspaces (for teams of 1-100+) with glass walls to maintain privacy without sacrificing transparency or natural light. Common spaces have a distinct aesthetic and vibe that will inspire your team, as well as the guests you bring into our buildings. Private phone booths, onsite staff, and business-class printers are just a few of the premium amenities found at WeWork locations. There’s also networking events, lunch & learns, and wellness activities - unique opportunities to connect, learn, and grow with the WeWork community. Join WeWork today.

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What’s next for the former WeWork space on Capitol Hill

A shuttered WeWork location on Capitol Hill is set to come back to life this summer. 

Portland-based coworking company Centrl Office plans to open in the Kelly-Springfield Building, where bankrupt WeWork shut down its office-sharing operations last month , according to Centrl and the building’s owners. 

Centrl offers a service similar to WeWork’s — coworking space and short-term private offices — with locations in Portland, Los Angeles and Sacramento, Calif. 

“Our natural progression was to go to Seattle next, and so we’ve been trying to enter that market for years,” Centrl co-founder Alex Hughes said in an interview.

The company plans to open in July after striking a deal this month with the Kelly-Springfield owners to operate in the building. Hughes declined to share financial details.

Centrl will operate 53,000 square feet of space on three floors of the building after refurnishing the space and adding more meeting rooms. The company offers monthly coworking memberships, offices for rent by the day or month and reservable meeting rooms.

The company rents to a mix of individual workers, small businesses and companies looking to downsize their office space and secure shorter lease terms. Flexible office space can cost more per square foot than traditional offices but at the same time allows employers to cut costs by renting larger spaces like conference rooms only when they need them, Hughes said. Centrl’s two LA locations are nearly 90% occupied, he said.

The number of individual coworking memberships has bumped up a bit since before the pandemic, “but it hasn’t changed dramatically,” Hughes said. “What has changed dramatically is the meetings.” Desire from workers and companies for meeting space “has grown dramatically over the last couple of years,” he said. 

The coworking business bets on companies small and large looking for shorter lease terms and flexible space they can easily scale up or down, in contrast to long-term traditional office leases. 

The average office lease in Seattle lasts for five years and a “huge number” of those leases signed in 2019 are coming due this year, James Yalowitz, a vice president at Kidder Mathews who represented Centrl in the deal, said in an email. Most office tenants today are looking for shorter lease terms and flexible space, he said. “Capitol Hill is an underserved office submarket and [Centrl] Office will quickly become a top choice for tenants looking to find a new, more exciting home.”

But companies like Centrl also compete with a flood of traditional office space that has hit the market since the pandemic ushered in widespread remote work. Roughly a quarter of office space in Seattle is either vacant or available for sublease in what the commercial real estate tracking firm CoStar calls Seattle’s “most pronounced office downturn in more than 40 years.” 

“That [coworking] model is tough right now because office space is cheaper” than it was before the pandemic, said Dan Dahl, a Seattle office broker with the commercial real estate firm Colliers who wasn’t involved in the Centrl deal.

Office tenants are looking for space that’s “plug and play and ready” and doesn’t require a lengthy time for physical improvements inside, which could make coworking attractive, Dahl said.

But at the same time, plenty of furnished offices are available for sublease from companies looking to offload space they’re no longer using. And landlords with empty space are “having to get really flexible,” offering shorter lease terms or freshening up and furnishing empty space even before they have a tenant, Dahl said.

Those types of offerings are “basically the same concept as a coworking space,” Dahl said, “so coworking has a lot of competition.”

WeWork opened its Capitol Hill location in the Kelly-Springfield building in early 2020 , just before COVID hit, then shuttered the space this year as part of its bankruptcy. The historic building was once home to REI and later to Value Village. Today, its first floor houses a Macklemore-backed indoor golf bar .

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7 coworking spaces in Moscow for any budget

If experts are to be believed, this year Moscow surpassed other capital cities in Eastern Europe by the total square meters covered by its shared workplaces. Over 100 coworking locations covering 130,000 sq. m. are available around the city - and this number is only expected to grow.

Just take, WeWork, the American shared workspace provider, that already has four locations in the Russian capital with 17,800 sq. m. in total. In September 2019, the public learned about its plans to open a number of new locations in Moscow, covering an extra 50,000 sq. m., which will potentially make it the largest coworking space provider in the country.

Until we wait for the market to expand even further, there are already many unique and comfortable options self-starters can choose from. Whether you’re an expat freelance professional in dire need of peace and quiet or simply curious in what conditions Russians choose to work today - check out some of the most spacious and interesting options on offer in Moscow.

‘SOK’ is a chain of “smart” offices focused on three components - Service, Office space, and Knowledge. They have three locations around the city and plan to open two more soon. Here, one can choose either an open space or a personal office, or even design your own space. Each location has everything needed for work and has different zones for those who want to network and those don’t want to be distracted. ‘SOK’ also holds events, meetups, conferences and lectures that are available for free for tenants.

Perks : personalized spaces, events, training programs

Where : ‘SOK Arena Park’ on Leningradsky pr-t 36/11 (m. Dinamo), ‘SOK Sady Pekina’ on Bolshaya Sadovaya st. 5/1 (m. Mayakovskaya), “SOK Zemlyanoi Val” on Zamlyanoi val st. 8 (m. Kurskaya)

Cost : 1,500 rubles ($23)/day or from 5,000 rubles ($78)/month

A place for technology-enthusiasts, #tceh offers many opportunities to establish connections with like-minded professionals and learn from the heads of already successful firms during events and meet-ups organized here. The coworking space partners with the Internet Initiatives Development Fund (a Russian venture capital fund which invests in technology start-ups), which allows the residents to keep up-to-date with the Fund’s activities and get insights from the experts in an informal atmosphere. A free tour is available for booking via their website.

Perks : 24/7 access, events, direct connections with the Internet Initiatives Development Fund

Where : Myasnitskaya st. 13/18 (m. Turgenevskaya)

Costs : from 17,000 rubles ($265)/month, a free tour is available.

3. Cabinet Lounge

‘Cabinet Lounge’ coworking space only has one location, which is in a historic building (that dates back to early 20th century) right in the city center and is a popular meeting place for businessmen, as it offers a range of different areas and services (including a concierge, drivers and couriers). The location has a rather luxurious look with expensive artworks, high ceilings, and its own bar. Membership to this privileged status club is not cheap, but offers up useful connections and access to private events.

Perks : historic building, concierge, luxury interior, events

Where : Novaya ploshad 6 (m. Lubyanka)

Costs : 2,500 rubles ($39)/day or starting from 17,000 rubles ($265)/month

4. Rabochaya Stantsiya

‘Rabochaya Stantsiya’ (Russian for “Working station”) has four locations around Moscow. In every location, one can find everything necessary for convenient work (printers, negotiation rooms, coffee bars, snacks, etc.). But each ‘station’ has something unique to it. For instance, there’s an arty vibe on Kurskaya, while there is a capsule hotel available for residents at the ‘Plaza’ station by Dmitrovskaya metro station. Among the tenants of the chain are such famous brands as Unilever, Adidas, Nike, Greenpeace and Sberbank.

Perks : 24/7 access, bathroom amenities, accommodation

Where : ‘Balchug’ on Sadovnicheskaya nab. 9 (m. Novokuznetskaya), ‘Plaza’ on Butyrskaya st. 62 (m. Dmitrovskaya), ‘Artplay’ on N. Syromyatnicheskaya 10/2 (m. Kurskaya), ‘Gorky Park’ on Leninsky pr-t 30A (m. Leninsky prospekt)

Costs : from 790 rubles ($12)/day or 25,000 rubles ($389)/month. Plus, there is an opportunity to rent first day for free. 

5. Tablitsa

Unlimited wifi, office equipment, negotiation rooms, and even courier, secretary, or accounting services - ‘Tablitsa’ (Russian for “table”) is a hybrid space that combines business with pleasure. Apart from being a coworking space, it also has a restaurant and its own park on the roof (!), which becomes the venue for parties during the summer. After work, tenants can also enjoy intellectual games, yoga, as well as various events, at an event-zone for 220 people.

Perks : convenient location, park on the roof, 24/7 access, events

Where : Novoslobodskaya st. 16 (m. Mendeleyevskaya)

Costs : 22,000 rubles ($342)/month

6. Dar Truda

Unlike the other coworking locations, ‘Dar Truda’ (Russian for “The Gift of Labor”) doesn’t offer any offices, but rather a shared woodworking space for carpenters that has everything necessary for manual labor. It has an impressive area of 830 sq. meters, carpentry equipment, and training programs for beginners and masters. Here, one can also order furniture, coloring, laser wood cutting for wood or metal, as well as 3D milling. It’s open from 11 am to 9 pm.

Perks : hourly charge, carpentry equipment, spacious area, personal lockers

Where : 1-ya Bukhvostova st. 12/11 (m. Preobrazhenskaya Ploshad)

Costs : 300 rubles ($4.7)/hour, 1,800 rubles ($28)/day, 13,000 rubles ($203)/month

7. Free coworking spaces

For those who’d rather invest their funds into the project, rather than into the workspace, there is a free option available, both for the short-term and long-term. There are several state coworking spaces located in different parts of Moscow. There, self-starters can not just work, but also get some consultations and legal support. One thing though - to get a place, one has to be officially registered as an individual entrepreneur or a company, plus, office equipment is not available.

Perks : free, negotiation rooms, recreational zones

Where : Srednyaya Pervomayskaya st. 3, Avtozavodskaya st. 1, Kakhovka st. 37/1, Michurinsky pr-t 27/2

Costs : free

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The new office ritual? Zyn nicotine pouches

• Nicotine pouches are finding an audience with people who view them as a healthier alternative to other products.
• Five men with prior nicotine or tobacco use habits told BI they use Zyn to help them focus.
• "If I need to work on something that's a little bit more important than other things — like it's just a part of the routine," one said.

At a prior job, Clay Coomer would sometimes see a colleague in the hallway and have a quick exchange.

"He would be like, 'Hey, you need one?'" Coomer told Business Insider.

The item in question was a Zyn, a brand of nicotine pouch that users often place under their lips to get a boost . Coomer and his former coworker would each share their stash when the other's was running low.

For Coomer, who's 36 and works in marketing, popping in a Zyn is just sometimes how he gets hard work done.

"If I need to have a challenging conversation with somebody or if I need to work on something that's a little bit more important than other things — like it's just a part of the routine," he said.

Coomer isn't alone. BI spoke with a handful of men in various fields who are relying on the lift they get from the nicotine as a way to get through the day — especially the hardest things that can be difficult to tackle — without the mess and health risks of chewing tobacco or cigarettes.

All had used nicotine or tobacco products previously and described turning to Zyn because they viewed it as a healthier or cleaner alternative to the likes of dip, vaping, or cigarettes.

The rise of Zyn

Zyn has been available for sale in the US since 2014 but has seen wider popularity recently.

Shipments of the nicotine pouches in the US in 2023 were up 62% year-over-year . And while product shipments can outpace consumer sales, Tobacco giant Philip Morris International, which owns Zyn's manufacturer, Swedish Match, forecasts even greater shipping volume this year. Zyn pouches have found favor with everyone from high-powered Wall Street traders to Tucker Carlson and GOP lawmakers .

There are even "Zynfluencers," who post videos on social media of themselves slipping pouches under their lips.

One 28-year-old corporate performance management consultant who previously used dip says he views Zyn as "the lesser of all the evils" among nicotine and tobacco products in terms of health risks.

Some sources asked not to be named because they didn't want to jeopardize future job prospects, but their identities are known to BI.

Raymond Niaura, chair of the Department of Epidemiology at New York University and an expert on tobacco dependence, told BI that there is risk of addiction with any product containing nicotine. (The FDA has issued a similar warning .) Niaura added that pouches tend to deliver less nicotine than cigarettes, which he said are more addictive. Instead, the pouches are more akin to nicotine replacement therapy.

Niaura said, in general, a nicotine pouch is a "pretty clean product" yet still could carry risks: Nicotine, for example, can increase heart rate and blood pressure , so someone at risk for cardiovascular disease might want to be particularly careful using it.

Related stories

"It's early days. It's hard to say for sure where these products fit in," he said, referring to how addictive products like Zyn might be.

The 'hand of God'

As for using a pouch at work, nicotine pouches tend to be so small they're nearly invisible to others, which is another part of the appeal for some users. Not that it's such a big deal anyway, several users told BI, because the pouches don't contain tobacco. So there's not the same stigma there might be with tobacco products.

"Nobody really cares," Coomer said, referring to using Zyn at startups. When he worked for a big blue chip company, he was somewhat more guarded about pulling out his canister of Zyn or keeping it in his pocket so it didn't look like a container of dip.

Nate Palmer is a personal trainer, podcaster, and founder of Million Dollar Body Labs . He works remotely with clients to improve their fitness and overall health. He chewed nicotine gum about a decade ago as a pick-me-up. But after not using nicotine for a while, he wasn't prepared for the hit he got when he popped a 6 mg pouch of Zyn. "I felt like the hand of God on my central nervous system. I was just feeling amazing. And then I just had to go throw up." Palmer has since downshifted to the 3 mg pouches.

Now, he holds himself to four pouches a day. And while he said he's not quite addicted, he does miss it when he hasn't done it for a while, he said. For now, it's become part of his routine when he has to concentrate on something demanding.

"I basically will just do it now for, like, podcasts or if I've got like a sales call or something where I'm like, I need to get dialed in," he said. "I've been doing it like at kid's birthday parties where I'm like, 'I don't want to talk to these people. I need to be more friendly.'"

Palmer sees using Zyn as an important part of his ritual around essential work. He advises his clients to focus on creating rituals to pair something difficult with something that can act as a reward, a concept called temptation coupling. In his case, his ritual helps him get through major tasks at work. "When I sit down when I try to do deep work, like I kind of have a ritual now where I put on some binaural beats from Spotify, I'll put a Zyn in and then, you know, I'll make sure that I have my list of stuff I need to do," he said.

Getting over the hump

Chandler, a 24-year-old software engineer who started smoking cigarettes in his teens before switching to vaping and now Zyns, said the pouches give him a similar "dopamine rush" without "feeling the burn in your lungs and in your throat" as he did with those other products. Chandler works from home but says his boss is aware of his Zyn use at work and has no issue with it.

"When I'm really trying to focus and use my brain and think hard, I'm just pounding through the pouches and then that kind of tapers off as the workday ends," he said.

He pops a Zyn "first thing" in the mornings and estimates he goes through a little over a can, which contains 15 pouches, each workday.

"I think it's that once that nicotine buzz wears off, it's like a kind of background noise in your brain that's like, 'Oh, I should take another.' It just grows the longer that you don't have it, and that in and of itself becomes distracting," he said. "It's not like it is not something that helps you focus, it's that not taking it really can take away from your focus."

A 24-year-old senior analyst who was a self-described "part of the JUUL population" before switching to Zyn says the pouches "get me into the right headspace and keep me focused more or less." He works five days a week in the office but says there's no stigma around using it there. He starts his days taking a Zyn with his morning coffee and has between 5 to 10 in the course of a day.

"I understand that nicotine is an addictive drug, but at the same time it's just like when you have a Zyn in, it just helps you focus," he said.

Sam Dashiell, a Philip Morris spokesperson, said in a statement to BI that Zyn is intended for people 21 and over who are using nicotine and wish to continue doing so. He said the best thing someone with health concerns can do is to quit or not ever use nicotine.

"Nicotine is addictive and not risk-free, but it's the high levels of other harmful chemicals in cigarette smoke that are the primary cause of tobacco-related diseases—not nicotine," Dashiell wrote. The company has said the average Zyn user is 39 years old.

A plan to ditch nicotine

Several of the Zyn users said they're using the pouches as a stepping stone on the path to eventually get off nicotine altogether.

"Ultimately in the future I would like to not be a nicotine user. I think when I was young and JUULs were the big thing and then all that stuff happened, a lot of people I would say got stuck with the nicotine addiction," the analyst said, referring to the FDA's JUUL ban . "So I think being able to more or less wean off on Zyns seems a lot easier than the JUULs."

Chandler too is fine using Zyn for now, at work and otherwise, as he works on reducing his nicotine use but also wants to quit it eventually. His reasoning: "The health hits that you take from doing it and just how much you come to rely on it, where you would go nuts if you didn't have access to it for a few hours."

"It's masked a lot by how OK it is in culture, but it's an addiction and I feel bad for anybody that gets sucked into it because it's awful, awful to quit," he said. "If I could go back and never start using nicotine, I would."

Watch: What's leading to vaping-associated deaths and injuries, according to pulmonologists

• Main content

The Department of Homeland Security Is Embracing A.I.

The agency will be the first in the federal government to roll out a comprehensive plan to integrate the technology into a variety of uses, from fighting crime to helping disaster survivors.

The Department of Homeland Security is moving quickly to adopt artificial intelligence, said Alejandro N. Mayorkas, the homeland security secretary. Credit... Valerie Plesch for The New York Times

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By Cecilia Kang

Reporting from Washington on A.I. policy

• March 18, 2024

The Department of Homeland Security has seen the opportunities and risks of artificial intelligence firsthand. It found a trafficking victim years later using an A.I. tool that conjured an image of the child a decade older. But it has also been tricked into investigations by deep fake images created by A.I.

Now, the department is becoming the first federal agency to embrace the technology with a plan to incorporate generative A.I. models across a wide range of divisions. In partnerships with OpenAI, Anthropic and Meta, it will launch pilot programs using chatbots and other tools to help combat drug and human trafficking crimes, train immigration officials and prepare emergency management across the nation.

The rush to roll out the still unproven technology is part of a larger scramble to keep up with the changes brought about by generative A.I., which can create hyper realistic images and videos and imitate human speech.

“One cannot ignore it,” Alejandro Mayorkas, secretary of the Department of Homeland Security, said in an interview. “And if one isn’t forward-leaning in recognizing and being prepared to address its potential for good and its potential for harm, it will be too late and that’s why we’re moving quickly.”

The plan to incorporate generative A.I. throughout the agency is the latest demonstration of how new technology like OpenAI’s ChatGPT is forcing even the most staid industries to re-evaluate the way they conduct their work. Still, government agencies like the D.H.S. are likely to face some of the toughest scrutiny over the way they use the technology, which has set off rancorous debate because it has proved at times to be unreliable and discriminatory.

Those within the federal government have rushed to form plans following President Biden’s executive order issued late last year that mandates the creation of safety standards for A.I. and its adoption across the federal government.

The D.H.S., which employs 260,000 people, was created after the Sept. 11 terror attacks and is charged with protecting Americans within the country’s borders, including policing of human and drug trafficking, the protection of critical infrastructure, disaster response and border patrol.

As part of its plan, the agency plans to hire 50 A.I. experts to work on solutions to keep the nation’s critical infrastructure safe from A.I.-generated attacks and to combat the use of the technology to generate child sexual abuse material and create biological weapons.

In the pilot programs, on which it will spend $5 million, the agency will use A.I. models like ChatGPT to help investigations of child abuse materials, human and drug trafficking. It will also work with companies to comb through its troves of text-based data to find patterns to help investigators. For example, a detective who is looking for a suspect driving a blue pickup truck will be able to search for the first time across homeland security investigations for the same type of vehicle.

D.H.S. will use chatbots to train immigration officials who have worked with other employees and contractors posing as refugees and asylum seekers. The A.I. tools will enable officials to get more training with mock interviews. The chatbots will also comb information about communities across the country to help them create disaster relief plans.

The agency will report results of its pilot programs by the end of the year, said Eric Hysen, the department’s chief information officer and head of A.I.

The agency picked OpenAI, Anthropic and Meta to experiment with a variety of tools and will use cloud providers Microsoft, Google and Amazon in its pilot programs. “We cannot do this alone,” he said. “We need to work with the private sector on helping define what is responsible use of a generative A.I.”

Cecilia Kang reports on technology and regulatory policy and is based in Washington D.C. She has written about technology for over two decades. More about Cecilia Kang

Explore Our Coverage of Artificial Intelligence

News  and Analysis

Gov. Bill Lee of Tennessee signed a bill  to prevent the use of A.I. to copy a performer’s voice. It is the first such measure in the United States.

French regulators said Google failed to notify news publishers  that it was using their articles to train its A.I. algorithms, part of a wider ruling against the company for its negotiating practices with media outlets.

Apple is in discussions with Google  about using Google’s generative A.I. model called Gemini for its next iPhone.

The Age of A.I.

By interacting with data about genes and cells, A.I. models have made some surprising discoveries and are learning what it means to be alive. What could they teach us someday ?

Covariant, a robotics start-up, is using the technology behind chatbots  to build robots that learn skills much like ChatGPT does.

When Google released Gemini, a new chatbot, the company quickly faced a backlash. The episode unleashed a fierce debate  about whether A.I. should be guided by social values.

A.I.’s booming growth is radically reshaping an already red-hot data center market, raising questions about whether these sites can be operated sustainably .

Few companies better illustrate how A.I. is changing Silicon Valley deal-making than Anthropic, one of the world’s hottest A.I. start-ups .

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War, reforms and a possible successor? Here's what we could see from 6 more years of Putin

• Vladimir Putin's reelection to a fifth term in office comes at a time of geopolitical uncertainty for Russia.
• His reelection raises questions as to what we can expect from Russia's strongman leader in terms of domestic and foreign policies over the next six years.
• Analysts say Putin could enact a series of reforms at home.

It was among the least surprising political events so far this year, but Vladimir Putin's reelection to a fifth term in office comes at a time of geopolitical and economic uncertainty for Russia, prompting questions as to what we can expect from another six years of the Russian strongman's leadership.

With Putin winning the vote by a huge margin, according to the Kremlin and its the Central Election Commission, the 2024 Russian election aimed to demonstrate that Russian society was "consolidated" around the president and that his domestic and foreign policies had the blessing of Russians both within the country and in its claimed "new" territories illegally annexed from Ukraine, as well as abroad .

That message was meant to be encapsulated neatly in the "landslide" 87% of voters that elected him, according to the electoral authorities, and the "record-breaking, unprecedented" voter turnout of 77.4% , up from 67.7% in 2018.

Analysts share their views on what we can expect now that Putin has strengthened his grip on power, with the Ukraine war, domestic economic reforms and a possible government reshuffle key factors to watch.

War footing

Russia's strategy in the war in Ukraine will be a major focus for the Kremlin in the immediate and near-term future, analysts say, with Russia appearing to have a military advantage on the battlefield in recent months. The U.S. presidential election later this year, meanwhile, puts the future of military aid for Ukraine into doubt.

Russia could look to push home its advantage over the next year, sending more manpower to the front, although that could have ramifications back home.

"In his post-election speech on Sunday night, Putin said that the main goals of his next six years include the special military operation and strengthening the country's defence capabilities. The war is popular in Russia but mobilisations of the population are not and the wide election victory could embolden Putin to step up the military effort," Liam Peach, senior emerging markets economist at Capital Economics, said in analysis Monday.

The Russian government has already put the economy on a war footing and has laid out plans to increase military spending significantly in 2024.

Finance Minister Anton Siluanov announced last fall that Russia's spending on national defense will be almost 11 trillion rubles ($117 billion) , with plans to divert almost 30% of the entire budget toward strengthening the country's defense capability and the "special military operation," or war in Ukraine.

Russia's recent successes on the battlefield in Ukraine have prompted some to ask whether Putin might also order another round of partial mobilization after the election or whether he might feel safe to hold fire on a contentious move.

"For now, this appears unlikely as the ongoing recruitment of contract soldiers is proving sufficient to replace Russian losses in Ukraine," Andrius Tursa, Central and Eastern Europe advisor at consultancy Teneo, said in a pre-election note.

Opinion polls show that a majority of Russians do not expect mobilization in the near term, Tursa noted, and "given that the previous round of mobilization proved highly unpopular and triggered considerable public anxiety, Putin will try to avoid this for as long as possible," he added.

Adeline Van Houtte, senior Europe consultant at the Economist Intelligence Unit, said that the U.S. election, expected to be held in November, will be an event that Russia is watching closely.

"While we expect the war in Ukraine to probably slowly settle into a frozen conflict with an unstable dividing line and no prospect of a lasting peace, the potential re-election of Donald Trump in the U.S. in November could tip the balance in favour of Russia," she said Monday.

Domestic reforms

Analysts are also looking at domestic reforms and economic policies that Putin might choose to enact after an election result that the Kremlin portrayed as a "unique" show of support for the president.

That Western countries condemned the vote as "neither free nor fair," saying it had taken place against a backdrop of political repression and censorship, was dismissed as "absurd" by the Kremlin's press secretary Dmitry Peskov on Monday.

Having cleared more of a procedural hurdle than a real test of his policies and popularity in the election, Putin will have more freedom to advance contentious reforms at home, analysts note.

"The focus now will be on whether this emboldens Putin to devote more resources to the war effort, whether policymakers push through unpopular non-war fiscal tightening to maintain macroeconomic stability and whether there are any changes in the political landscape, including the positions of power close to Putin," Capital Economics' Peach said.

Putin had already flagged public spending programs and potential fiscal reforms in his State of the Nation address to Russian lawmakers in February. During the speech, which read like an election manifesto, the president flagged $126 billion in infrastructure and social spending over the next six years .

New national programs focused on supporting families, such as with the subsidized mortgages scheme, as well as proposals to reduce poverty and improve the nation's health and life expectancy. Putin also said he was thinking about ways to modernize Russia's fiscal system to create a "fairer distribution of the tax burden towards those with higher personal and corporate incomes."

While the government will present specific proposals in the near future, Tursa noted that the speech suggested that "Russian citizens and companies are likely to see an overall increase in tax burden to help finance the war and address broader fiscal challenges."

Capital Economics' Peach said the initiatives Putin flagged were important, but agreed that from a near-term fiscal perspective, "the big thing to watch is whether the government pushes through unpopular non-war fiscal tightening to accommodate higher military spending."

A reshuffle ... and possible successor?

Analysts note that proposed social programs for the six years ahead mean that there is also the possibility of a post-election reshuffle of Russia's government ministers, and that new officials could rise to prominence and be seen as possible future successor to Putin.

Putin is not inclined to make major personnel changes lightly; he's kept a number of close ministers in post for many years, such as Defense Minister Sergei Shoigu and Foreign Minister Sergei Lavrov. The last major change in leadership roles took place back in 2020, when the technocratic head of Russia's tax service, Mikhail Mishustin, became prime minister, replacing Dmitry Medvedev.

"Following the full-scale invasion of Ukraine, any personnel changes were discouraged by the Kremlin ... However, with the dynamics of the war now shifting in Russia's favor, Putin might feel more confident with the reshuffle. This would not be surprising as Putin had presided over major personnel changes in the past aiming to improve the efficiency of the bureaucratic apparatus," Tursa noted.

Andrey Pertsev, a Russian journalist writing for the Carnegie Endowment for International Peace, noted in analysis last week that "creating a new political post to oversee major social spending plans will cause a shift in the balance of power within Russia's bureaucracy."

"The social spending commitments made by Russian President Vladimir Putin in his February state of the nation address indicate that at least one Russian official will get an influential new job. The lucky person will likely be either a deputy prime minister with expanded powers, or a special coordinator" that has direct and regular access to the president, he noted.

"Either way, they'll get regular access to the president, the opportunity to disburse large sums, and the tools to shape their public image. That will automatically create an alternative center of power within the government," he said.

Pertsev said the appointment is likely to prompt Russia's elite to start "thinking about a possible successor to Putin."

"The person who gets the job will inevitably be seen in a new light ... For many years now, Putin has avoided a major reshuffle among Russia's top officials in order to head off any speculation about power transitions or successors. Now, however, he has little choice but to empower a major new political player," he said.