Business plans are cornerstone documents for any company, as they contain essential details about:
This means writing down a detailed business plan is vital for both your team and outside investors looking to finance your coworking space. In this article, we’ll go over the essential topics your coworking business plan must cover and give you an outline for structuring the document in a logical way.
First, let’s start with a quick overview of business plans.
A business plan is a document describing how you plan to start, grow, and manage a business.
You can think of it as a high-level road map that shows where your business is today, where it will go, and how you plan to get it there.
There are tons of useful resources online on how to write a business plan, so we won’t reinvent the wheel here. You can check out QuickBooks’ guide to writing business plans, which proposes a 10-step structure:
This outline can be a good starting point for any organization looking to build a business plan. In the next sections, we’ll cover 6 topics that are specific to coworking spaces and should be heavily featured in your business plan.
Your coworking business plan should answer two key questions near the start:
Your coworking product mix is made up of the products you sell.
As we said in our article on creating a strong product mix, new coworking spaces should focus on three main products:
It’s important for your business plan to establish what percentage of the space will be allocated to each product. Additionally, it should also include information about how much you plan to charge for them and why.
For example, desks in open spaces may be available for rent on a pay-as-you-go basis, while private offices should be included in membership plans. Meeting rooms can also be included in membership plans or be available for rent by the hour.
The bulk of your revenue typically comes from your main product mix. However, there are also plenty of ways to add extra revenue streams.
For example, you can diversify your regular membership plans and charge more for them based on 24/7 access, for example. Or, you can create virtual memberships for businesses that want to establish a legal presence and get a reliable correspondence address.
You can also consider a host of value-added services to help you generate more revenue like:
For more details on this topic, check out our article on generating more revenue for your coworking space.
Once you’ve established your revenue generators, it’s time to get into the details of how you plan to get customers through the door.
Here are some of the key questions you’ll need to answer here:
If you’re just getting started and don’t have any experience with marketing and sales, check out our article on the 14 proven strategies for attracting more coworking space members.
For most coworking spaces, the biggest recurring expense is the monthly lease (except for operators using management agreements).
You also want to include other key costs here, such as:
The goal of listing your revenue generators and expenses is to get a good idea of how much revenue you’ll need to cover your costs and turn a profit.
For instance, say you have $5000 of regular expenses every month. Your projections should show how long it would take for revenue to reach and surpass that number. This is perhaps the most important part of any business plan, especially if you’re looking to attract outside investors.
In general, it’s better to be conservative than to set unrealistically high expectations and fall way below them. It’s also a good idea to factor in some unexpected expenses in your calculations.
For example, if your regular expenses are $5000, you want to reach $5500-6000 of monthly revenue before considering the space profitable on a monthly basis.
This coworking revenue calculator is a useful resource for projecting profits and losses, as well as building charts for investor decks.
Writing a business plan is only one step in building a successful coworking space. You also need to find the right location, promote your space, and before everything else, choose the right coworking management software.
To help you out, we created the OfficeRnD Flex Startup program. It’s geared towards aspiring flex and coworking entrepreneurs and offers an attractive 50% annual discount on OfficeRnD Flex’s startup plan. Plus, you get access to Flex Academy – an expertly curated list of coworking resources that contain everything you need to build, manage and grow a successful coworking space in 2023 and beyond.
Apply for the Flex Startup program here.
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