What Expenses Coworking Spaces Can Save On
The number of coworking spaces around the world has surged. More and more freelancers, tech people, startups and well-established companies prefer shared offices over traditional offices for a number of reasons. Comfortable, yet inspirational work environments, ergonomic furniture and attractive design, free drinks and exciting networking events, the sense of belonging to a community – the perks of coworking spaces far outweigh those of conventional offices.
From the independent workers’ point of view, coworking spaces make for a perfect solution to the flexible work approach; however, coworking operators have higher risks compared to traditional offices, because they enter into a long-term lease agreement with a landlord and offer short-term rental to their members, without the guarantee of retaining them for long periods of time. That brings us to the question: Can coworking spaces make money?
The answer is yes. With the right approach, a coworking space business model can be profitable. All it takes is finding the right balance between the revenue received from the business activity, your regular costs and the income adding services you offer. Let's have a look at some of the effective ways to manage coworking space finances.
Some things and services are indispensable to any successful coworking space. It goes without saying that free beverages, Wi-Fi connection, printing options and access to social events cover the absolute minimum that all co-workers expect; therefore, under no circumstances should you cut them.
At the same time, many coworking spaces have services that do not add any sought-after value and, instead, create extra costs. For instance, employing a full-time receptionist will cost you more in the long run than implementing a coworking space management software with automatic check-in options.
Another risky service that will cost you, and might not bring any profit, is an in-house restaurant. A centrally-located shared workspace with plenty of amenities in its vicinity doesn't need a restaurant. In case you do need to provide some snacks and/or food options, it’s better to outsource the food-related services.
Child day care is yet another service that can potentially cost a coworking space a fortune, considering the salary of the personnel that looks after children, the costs associated with furnishing a playroom, fulfilling state regulations, and sometimes the salary of a medical practitioner that may be required in some states. Therefore, unless you cater to female entrepreneurs with kids or you have a high demand for child care, we advise you to think twice before offering child care at your premises.
According to the recent 2017 Global Coworking Survey, there is an increasing demand for private offices rather than floating desks, while conference rooms are not often used by the majority of coworking members. Take advantage of this statistic by offering private offices to corporate clients and perhaps decreasing the open area by converting part of it to office space. Add high-reward services that don’t cost you much but help you gain extra profit or attract long-standing members. Such services may include virtual memberships with mailing options, or the possibility to use any of your locations for free (if you are running multiple coworking venues).
To be profitable, check the demand for any extra services before offering them, especially if you are new to the coworking business and don’t have many members yet. Every decision should be calculated; therefore, don’t offer services that won’t bring in new members or a cash influx.