Top 5 Reasons Coworking Spaces Fail
With about 17,000 shared office spaces around the world, the demand for coworking is overwhelming. It's estimated that around 1.7 million people, including freelancers, digital nomads, startups and innovative companies enjoy the benefits of this work concept. The number of coworking spaces is on the rise and the annual growth is about 16.1%.
Despite the popularity of shared work locations and seemingly simple business models, some of these venues fail. Each coworking space that no longer exists has its own sad story; however, there are common reasons why shared office spaces become insolvent. Here are the five primary drivers of coworking space failure:
The location of your coworking space is a big factor that can define the success of your business. Shared offices tend to be less successful if they are in rural areas. Many of your potential customers won’t choose the venue if it takes a lot of time to reach. A vibrant city district, as opposed to a faraway place, that attracts young people of different professions will be a hit with freelancers and startups.
The facilities around a coworking space are also essential. Are there any restaurants in the area or a gym just around the corner? Can your members leave their cars at a secure parking lot nearby? If you answered yes to any of these questions, that’s a great sign!
2. Layout and infrastructure
The design and space allocation should be created with people in mind since you're selling a people place, not just an office space; however, you shouldn't forget that members will come here to work. It's essential to consider your customers and their working needs.
Along with an open floor plan and exciting communal areas, there should also be private offices, meeting rooms and telephone booths that could meet any worker's expectation of flexibility. Both introverts and extraverts should feel at home here.
The physical environment is a significant factor, too--people make their judgment of a place within twenty seconds after entering it. An attractive and ergonomic design should not be overlooked.
We mean comfortable furniture with various seating and perhaps standing options--a copier, telephones, good lighting as well as wall art that will inspire your customers. Members will undoubtedly expect the walls in the meeting rooms to be soundproof and the conference spaces to have all the tools needed for presentations, including a whiteboard and a projector.
Some coworking spaces try to copy the business models of their competitors, especially giants like WeWork or Impact Hub, and they don’t succeed mainly because they don’t have the necessary resources. Remember, there's more to running an exceptional coworking space than money. Each successful space has its own mission and values, and it attracts certain clientele because of those factors. Define your business philosophy and you will gain members whose values align with yours.
Who doesn't love free stuff? A coworking space with added amenities can attract hordes of people and enhance its inherent work space experience. Among the most sought-after perks are treats and eats, including occasional breakfasts and snacks, as well as free coffee, tea or beer on tap. Yoga lessons, meditation rooms, ping-pong tables, dog parks and childcare are other ideas to consider. You can even give members free swag at signup, like t-shirts, hats or totes.
Last but not least, coworking is all about the sense of community and networking; therefore, it's essential to create an atmosphere that fosters collaboration and brings people together. To achieve that, you need an excellent community manager to organize social events. From pizza parties and birthday celebrations to mentorship programs – there's a broad scope of activities to choose from. Creating an ambiance that fosters a feeling of belonging is, in fact, the key to success for any coworking space.
When planning your coworking space, consider these factors as the backbone of your business. Once launched, you can test how it works in a beta-regime. Try to get your members’ feedback, track metrics, do some research to find out their, and your business will thrive.