Thriving In Smaller Markets
Be it starting a coworking space or operating a space after a period of time, oversights or simply the lack of planning can incur your business quite a bit of unnecessary costs. Here are three hidden costs of running a coworking space you need to know about.
Small businesses are often provided with assistance from the government's development centers or economic corporations. Find out what available grants there are for your business and inquire what other resources you can get. This can greatly fund ongoing costs and decrease your business costs over time.
Another thing you may not realise is that depending on different states, you may need to obtain a license for your business. Check with local authorities that the premises you are using are suitable for your business activity. For example, if you are planning to sell cappuccino late or white coffee at your coworking space, namely drinks with fresh milk, you will also need to acquire a food service certificate too.
Failure to comply with the regulations and to obtain the necessary papers may result in hefty fines. Therefore, make sure you’re fully compliant with the local laws and regulations.
It is an open secret that employees’ salaries constitute the biggest chunk of your costs and you may need to spend between 40 and 80 percent of your gross revenue on employee salaries and benefits. But what you might not realize is that you will spend your precious time and money on organizing special training for them.
You simply cannot afford staff turnover. Therefore, pay careful attention to the people you are going to hire and try to make sure that they are the right fit for you at the time when you are conducting a job interview.
When looking for a location, make sure that you can just move into it and start working. Do not underestimate the possible costs of space design or renovation. Not only would you have to invest in building materials and furniture but also pay for the work of designers and construction workers. It is normal that things may wear out with time or that eventually, you would like to invest in some better furniture/more spacious location. You can do that once you’ve made some profit and have the necessary resources. At the beginning of your activity, do not bite more than you can chew.
It is worth being aware of the hidden costs before launching your coworking space. Start small and simple, consider the expenses to save on because it is likely that your estimates might appear to be lower than the actual costs. Concentrate on building a flourishing community rather than a soulless high-tech building. Once you have conducted your business for some time, create a profit and loss overview, define whether or not your business is profitable and plan your further activities by creating an appropriate business strategy!
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