Thriving In Smaller Markets
This is the first installment of 'Can Coworking Spaces Be Profitable?'. Scroll down for the following installments where we will talk about revenue, costs, competitor analysis and more!
In many cases, finding the relevant statistics is as simple as conducting an internet search and verifying that the results are from a reputable source.
Begin by researching the market share of incumbents within the coworking industry. As this data is focused on existing companies, you should be able to find a current market value of the industry, which will give you a reasonable idea of the current market share for incumbents. As you search for information, look for reliable websites that are known for their objective information, such as Statista. You can also find statistics from organizations within the realm of coworking, such as the Global Coworking Unconference Conference.
When examining the market share of incumbents, keep in mind that your goal will be to take a portion of their market, so you want it to be large enough for you to benefit from. Don’t forget to consider narrowing down the relevant statistics to just those in your region, as well, since some areas of the country have more coworking incumbents than others.
Determining the current number of players should be straightforward. You just need to find how many coworking companies currently exist. That information might be readily available on the websites mentioned above simply by searching 'coworking spaces in XYZ' and sees how many show up in the results. If you do an online search for the number of players, remember to filter the results so you only have recent statistics. Coworking is quickly growing, so the statistics constantly change.
Discovering the demand for coworking spaces will be a bit more challenging since you need to look for reputable sources with predictions for the market. Start by finding statistics on how many people opt for coworking or are currently working at coworking spaces. Then, follow this up with specifics on the types of spaces they want and predictions for the future of coworking.
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The demand for coworking spaces is closely connected to the projected market value, and you might even find both pieces of information on the same page. Finding the current market value will be relatively straightforward. It might even be the very first piece of data you come across. When comparing the current and projected values, look at the size of growth and the time period involved. Be sure to pay attention to what factors the projected values consider so you can evaluate how accurate they are likely to be.
Finally, evaluate the barriers to entry for coworking spaces. Compared to other industries, there is a relatively low barrier to entry for a coworking business as you simply have to rent a space and set it up. That being said, your research should include what types of features people look for in a coworking space, so you know whether the barrier to entry for a successful company will be higher. To get a better feel for the nature of the market, look for figures on average profits in coworking and how much of an investment is required to improve these profits.
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