Are Coworking Spaces Profitable?

New technology has an outstanding impact on how we work. It doesn't just change the way we complete tasks, automate processes and communicate with each other, but it also fundamentally shifts how we organize workspaces and offices. Coworking spaces are an example of technological advancement. If you’ve ever had a chance to work or visit a coworking space, you know it doesn't resemble a classic office.

What is a Coworking Space?

A coworking space is a shared office or a shared building where entrepreneurs, startups, freelancers, event management businesses, developers and design teams meet to work independently, as well as socialize and collaborate on joint projects. A coworking space is not only a work office. It can be a place that meets the additional needs of a modern lifestyle, such as socialization, physical activities or organizing educational and networking events. 

In fact, any activity that a number of people can join can be organized in a coworking space; therefore, coworking spaces have become popular hubs of social buzz and activity that can generate original sources of revenue. A coworking space is also called a shared workspace or a shared office. As a specific social cell that incorporates the shared economy concept, it has become a profitable business model that is taking over the world.  

‍Coworking space
Coworking spaces are specific social cells that incorporate the shared economy concept.

Revenue Streams for Coworking Spaces

Because of the diverse ways people collaborate or need a location to perform short-term or long-term tasks (in single or various locations), coworking spaces offer various revenue streams that can be turned into a source of profit for the space owner. There is a multitude of models to run a coworking space, but most include at least several options to monetize the space, the equipment, and the human resources.

A common model of generating revenue for a coworking space is when a startup signs up for a lease for a larger office and takes the responsibility to organize and manage the resources, while renting the free space to other interested visitors. Many coworking spaces don’t have a main lessee but are founded solely with the purpose of serving workers who, for various reasons, don’t want to bear all the costs of running an office; therefore, all office costs that a client could need in a shared office and social space could potentially become a revenue stream for the owner. Typical profits are made out of renting desks, lockers and conference rooms. In more detail, the coworking space can generate revenue from:

Membership fees for renting a workspace.

Depending on how much privacy and liberty the coworker has over the rented space, this source includes private offices, shared desks or dedicated desk memberships. Membership fees can be calculated as certain portions of time—daily, monthly, quarterly or annual fees that allow the member to use basic or more advanced amenities of the coworking space. As an owner, you can choose to provide discounts for longer memberships to reward loyalty or give group discounts to make profits of serving larger teams.

Renting amenities and equipment.

Amenities can include anything from private audio or video call cabins, lockers, private offices with full equipment, mailboxes, kitchens and refrigerator rooms, as well as social spaces that can be rented for discounted fees to regular members. It all depends on how you have organized the coworking space, the type of your regular visitors and the most sought-after amenities. Equipment rentals can be versatile, including telephone lines, video, and audio equipment for the conference room, printers, computers, and even cloud storage for startups that need larger data resources. If you do a little research about the typical member, before you decide on the amenities and the equipment that should be rented independently or included in membership fees and packages, you’ll make a better-informed decision and be able to maximize profits and minimize costs for the coworking space.

Membership packages.

This is an area where you can get creative. A membership package can include only the basic membership fee, but many shared offices choose to tailor packages that fit the needs of the average visitor. Such packages usually include a number of the coworking resources. The more the member uses, the more affordable the package gets. It’s convenient to have a software where the member can choose one or more of the available package options and create a personalized package by automatically calculating the costs for each selection from a list. A membership package can include collaborative business models with local amenities, for instance, food spots, bars and clubs, gym and fitness locations, outdoor activities, transportation discounts, medical assistance and alternative revenue sources that meet the needs of a co-worker and that can be easily incorporated into the basic package.

Conference room rentals.

 conference room
You should adapt a conference room to serve more than one purposes

Conference rooms can be rented for typical business purposes, such as holding meetings, training staff, and video presentations, but also for alternative social events. If possible, you should adapt the space to serve more than one purpose. Conference room rentals can be one of the most lucrative revenue sources, since they include sharing expensive equipment with a large group of people. Think of transforming the conference room into an educational space or a place for organizing informal social and business meetups.   

Various Costs For Coworking Spaces

Always design revenue-generating resources by keeping the costs in mind. Even if you already own the space, as the main lessee, and need to pay the rental contract fees, you still have to consider additional costs for regular supplies, any additional equipment you need to purchase, extended operational costs, as well as extra helping hands to manage the coworking business.


Rental contract.

First and foremost, make sure that the contract has a subletting option. You must be legally allowed to let the space to other tenants. Then you can start thinking of calculating the revenues that will cover the rental costs. Check if the lease covers only the workspace or if it includes facility management and utilities, because this aspect will significantly affect the next string of costs.

Operational costs.

Operational costs encompass internet rental, telephones, access control management, cleaning, electricity, as well as other utilities. Don’t forget to check whether they come at a fixed price. If they are calculated on the basis of consumption, you need to think carefully about setting your membership fees. This process may take a bit of trial and error until you find the perfect cost-revenue balance.  


Certain kitchen and office supplies, toiletries, water kegs, and coffee are some of the main supplies in a coworking space that come for free. Assess average individual needs and include them in the cost calculation. Be clear about what you provide for free and clearly identify paid services. Other supplies can include medium-term and long-term costs, such as office equipment, furniture, facility management expenditure, such as lights and bulbs, cabling, and office safety equipment.   

Staff salaries.

Staff salaries should be a mandatory item in your budget breakdown. Some coworking spaces employ office managers while others let members regulate their own access and usage by implementing electronic coworking space management tools. You can go for a shared option of hiring a manager during busy hours while letting members manage on their own during less crowded times.

Are Coworking Spaces Profitable?

Since open spaces have been proven to increase productivity, the modern workforce loves them. Unquestionably, there are hundreds of ways that you can make a coworking space a profitable business model. All you need to do is to see what you have, what you can buy and what your members need, or may need, in the future. Consider your location and get in touch with local suppliers to overcome your limitations. Anything that can make their working or social life easier can be incorporated into the membership package. Modern coworking spaces are about dissolving the boundaries between teams and workers, bringing them together into more flexible spaces, both in space and time, to create advanced economic models to the joint benefit of all participants.

New Revenue Streams for Coworking Spaces

By using real-time reporting and analytics tools for coworking spaces, you can quickly assess which of the revenue streams bring in profits. Since it’s not simple to calculate how much a shared internet line or a discounted membership bring in over time, you can use the software to add and remove different functionalities until you find the most advantageous model. It may take up to two years to cover the initial investment of a privately held shared office. If you include imaginative revenue resources, such as referral commissions, merchandise, virtual office rentals, dedicated mailboxes, and member staff support (a model where a loyal member takes over part of the tasks for managing the coworking space), you will be able to become one of the 87 percent of profitable coworking spaces, which is a strong number that speaks in favor of choosing a coworking space as a business model.

The Yard Coworking

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