Being an entrepreneur and building a successful business is a very complicated job. Setting up a coworking space and making it successful is not an exception. There are too many unknowns, roadblocks, and issues along the way. After working with hundreds of spaces worldwide we’ve gathered a list of patterns that successful coworking spaces exhibit.
Before we get into the details, let’s examine what a coworking space actually is:
We all know that the most important element of every successful coworking space is the Community. Collaboration between like-minded professionals is the foundation of every coworking space. Sometimes, the community exists even before the physical space.
Building a vibrant coworking community is probably the hardest part of making a great coworking space.
It’s a long path from zero to good to a great community but you have to take it. Building it requires a lot of effort, a great team, and energy. You need to build, curate, stimulate, and grow it. Also, you have to be likable so that people want to work with you in your space. You also need evangelists. Your first members need to be pitching the space all around the town and selling it for you.
One of the key elements of creating a community is to establish a safe environment where people feel that they belong to something. When you walk in the space and you can feel a positive vibe, that’s the community.
Although it’s usually associated with the hotel industry, hospitality is an essential building block of coworking spaces too. The successful spaces understand it, accept it, and capitalize on it.
Hospitality is the friendly and generous reception and entertainment of guests, visitors, or strangers.
The key element of providing good hospitality is your team. Hospitality is people’s business and the people are in the center of providing good service to others. The successful spaces (and any business) are great at hiring members of staff and keeping their company culture awesome. Focus on hiring nice, friendly, and smart people with a sense of empathy. They will be the face of your coworking in front of members.
When you walk into a coworking space you should see and feel the smile and the warmth of genuinely nice people that work in the space. A smile can open many doors and this is absolutely valid for the coworking business.
If you’re interested in learning more about the good hiring practices in coworking, check out our webinar on the topic.
Successful spaces understand that they are in the Real estate business too. The quality of the space matters, as much as the other key elements.
Successful spaces are very good at making the best out of their available real estate. Some of the biggest coworking providers invest a lot in the planning phase to ensure the business and financial viability of the location. One of the biggest mistakes you can do is to construct many large common areas instead of reserving a bit more space for the desks and private offices.
When you evaluate the design put yourself in the shoes of your prospective members and just ask yourself one simple question – ‘Am I going to feel comfortable working on a desk in this place for the next 3 years?‘
Successful coworking spaces understand that at the end of the day they run a business. And if you want a healthy, sustainable business, you need to make it profitable and generate enough revenue to grow.
Successful spaces leverage different revenue streams and balance between risk and growth potential.
Tip: To reduce the risk, you may consider longer terms (1-year contracts) with 3 months notice periods for your private offices.
Data: The big coworking spaces have about 60-70% of their revenue from Private Offices, 20-30% from Desk Memberships, and about 10% from other services, such as meeting rooms, events, virtual memberships, etc.
The successful flexible workspaces are also good at keeping their expenses low.
Running your business smoothly with minimum involvement by your staff is key.
Successful spaces are also good at raising funds and promoting the Coworking idea to investors. Having venture capital is beneficial for your business as it reduces the risk on the entrepreneur side and allows you to be more aggressive with your growth plans.
Always take advantage of the software that you use. It can help you to provide meaningful data when you present it to your investors. Software is a key element of any business. You can’t raise capital if you run your business on spreadsheets and Zapier only. It is not scalable for a number of reasons.
Building a great business is complicated and hard, but beautiful and rewarding, especially if you are smart about it. Consider all the different aspects of how to nurture an awesome community, provide great service, and high-class facility and you will improve your chances of building a successful coworking space business.
Usually, as a starting company and especially when your business is successful and grows rapidly and organically, often there’s no time to design processes.
But if you have the ambition to grow and open additional locations, building scalable, transparent, and easy-to-replicate processes from the very beginning will save you a lot of time and effort once you start growing your business.
When you start thinking about growth, there are several things to consider – what are your options for expansion, are you ready to grow, how to approach the process, what are the specifics of running a multiple locations business, etc. If you’re interested in exploring this topic further, check out this useful guide to expanding your coworking business.
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