10/25/2018

Starting A Coworking Business: Financial Model

This is the third installment of ‘Starting A Coworking Business’—scroll down for past and future installments, we have four in total! Click here for parts one, two and four.

When beginning a coworking business, you should create a financial model before you open the space or even sign a rent contract. This will allow you to gauge whether you have sufficient funds to open a business and whether the operation itself is likely to bring in sufficient revenue. To create your coworking space financial model, take a closer look at the various revenue streams, as well as the costs associated with them. 

Determining and projecting revenue 

There are two main revenue streams for coworking spaces: Membership plans and space leasing. Most coworking spaces will offer a range of membership plans, so you will have to carefully determine how many plans you want and what benefits to include in each. Perhaps more importantly, you will have to estimate how many members you can accommodate in your planned space and how many, realistically, will sign up. 

Most coworking spaces will also offer space leasing, such as dedicated offices, for either individuals or groups. If you offer them, you will need to determine the plans, including the costs and benefits. Once again, you will need to estimate how many people will use this service. Do the same for any short-term space leases, such as using meeting rooms for several hours on a given day.

Determining and projecting costs

The next step of your coworking space financial model is to figure out the various costs you'll need to pay. Begin with the initial costs associated with setup. These will include any down payments or security deposits needed for renting the space, fees associated with registering as a business, and the cost of actually setting up the space. Include fees associated with an interior designer and the materials they need, such as furniture and paint. Don't forget to also include any costs associated with adjusting electric wiring or enhancing bathrooms. Include the initial costs for a copier and printer, coffee machine and any other kitchen equipment you will include, such as a fridge and microwave.

Finally, you can move onto the regular costs associated with operating your coworking business. Start with the monthly rent payment and overhead costs, such as electricity, water, and internet access. Don't forget to include the cost of any employees who are present in the space during the day, whether it’s someone who welcomes people and fixes minor issues with the printer or a janitor to clean the space each evening. 

There are also the costs associated with the benefits you provide to members. Factor in things like coffee, tea, snacks, and disposable or reusable dishes and utensils. Include bathroom supplies, such as toilet paper and soap, as well as cleaning supplies. Consider paper and ink for the printer. Don’t forget to include the cost of seats that remain empty.

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Required assumptions

To create your coworking space financial model, you need to make several assumptions. Otherwise, calculations will be impossible. You will likely operate under the assumption that the market costs of items like coffee do not change dramatically. You will also assume that you can get a discount by purchasing repeat items, like snacks and bathroom supplies, in bulk. Other assumptions include the percentage of seats sold and the number of employees you will need. 

Platform

Location

Croissant

International

Included.co

International

Hubble

London

Coworker

International

Instant Offices

International

Pickspace

International

Share Desk

International

Happy Desk

International

DesksNear.me

International

DeskTime

International

Coworking London

London

Desk Pass

International

Copass

International

Coworking Wiki

International

Desk Surfing

International

Near Desk

US

Liquid Space

International

GoCoWo

International

Find Workspaces

US

Sneed

India

Ofixu

International

Meetings Booker

International

Qdesq

India

eWorky

International

Share your office

US

Spacelist

US and Canada

42 Floors

US

Office List

US and Canada

Coffices

International

Breather

US, Canada, Europe

Setting

Berlin

Key to Office

International

Peerspace

US and Europe

Bizly

US

Spacewhiz

India

Beewake

US and Europe

Awfis

India

Allofficecenters

Germany

Splacer

US

Lexc

International

Desk Camping

International

Worksnug

International

Seats 2 Meet

US

Coworking.Coffee

International

Commercial Cafe

US

Preferred Office Network

US

Heydesk

International

Office Freedom

International

Flexas

International

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