Ready to start a coworking space? It can be profitable and certainly needed these days. With many people working from home and launching businesses, there is a big demand for both quiet spaces and professional locations.
But can it be a lucrative form of non-dues revenue for the chamber? It can, but it all comes down to your audience and how you will derive potential revenue. Here’s how to figure that out for your chamber of commerce.
According to the Global Coworking Survey, about 47% of coworking spaces are lucrative. Factors that contribute to that can be pricing structure, offerings, location, and time in business. Of those that are profitable, most break even at the 13-month mark and 50% are profitable by year 3-4.
For the chamber, there are several ways to make money as well as the possible service tiers and set ups.
Things to Consider When You Start a Coworking Space
Public or Private?
Coworking spaces can operate the way a country club does where everyone there is a member or they can be open to the public for drop-ins with a pay per use structure. Some coworking spaces operate in a hybrid combination offering the best value in membership but also the opportunity to use the space, if available.
Chambers have some leeway in that they can design their space as a perk of membership (free for all members) or as an additional fee that’s discounted for members. They can also market it to sell/up-sell higher membership tiers. For instance, the “Entrepreneur” membership tier may include free membership to the coworking space or certain free perks like a monthly conference room rental.
This is one chambers are very familiar with. The people using your space may not all need the same thing. Some need a quiet spot to work, some want a conference room for meetings, some may even wish for onsite, drop-in daycare for littles.
You can create membership fees in a tiered structure that lend flexibility and address different needs from the everyday worker to the occasional drop in. Some tiers can offer free services (with monthly fee) or provide discounts. If you’re moving to a tiered membership, this might be the perfect time to start a coworking space as a solopreneur tier benefit.
Make a list of the services needed and how you’ll structure each tier. You may find it valuable to provide every chamber member with an introductory tier or ability to try out some of your services.
Coworking spaces can be an excellent spot for events. Event marketing is becoming more popular with businesses and organizations these days. From associations to niche networking groups, businesses hosting how-to’s to authors and book signings, the uses for rented space is booming.
Classes are another good use of the area. Check out the Palm Springs CO-work space. In addition to classes and events, can you say free beer? Yes, please!
Some non-office businesses don’t want to make the investment in setting up their own home office and buying equipment they’ll rarely use. They may prefer a monthly fee to access what they need and share the cost with other co-workers. For those people, a la carte services may be perfect. Such services could include a specified number of copies or faxes per month or access to an audio recording room (for podcasts and webinars), for example.
Childcare is also a popular a la carte service. Most coworking spaces that offer this service, offer it on a first come, first served basis in much the same way gyms do. The service is generally available for those working in house, not as a permanent enrollment offering.
What Makes a Coworking Space Successful?
Although coworking spaces have been around for close to twenty years, the number of them has grown during the pandemic partially in response to more people working from home. While many professionals understand the use of a coworking space, there is still an educational component to what these organizations offer. Your operation will likely provide more than just desk space. It’s important to market the benefits and present the cost savings to using your office space, equipment, and services versus buying it and housing it in their living room.
SWFL, Inc., formerly known as the Bonita Springs Chamber of Commerce, created the Hub as a solution to distractions when working from home. The group markets it as “a free-to-use community space for people to meet, work and connect in Southwest Florida.” The Hub offers two semi-private office suites, which can be reserved online, and open areas with chairs. There’s also free coffee and WiFi.
With any business, location is important. If most of your co-workers drive to your location and there’s a lack of parking space, that could present issues for profitability. If it’s not a convenient spot, hosting meetings and events might prove challenging. Location is critical to success.
Design and Connections
You need both a functional and inviting design. Some people want formal workspaces with privacy, while others prefer an open, casual space with good lighting to help them network and engage with others.
Networking at coworking spaces is one of the benefits that few people talk about. The comradery and energy that exists in creator and entrepreneurial spaces trumps that of working from home. The exchange that is possible is a natural extension of the chamber and its mission.
If you’ve considered opening a coworking space but are not sure how you would add it into your budget, explore the ideas of funding it with a grant. It’s possible your area may be eligible for a grant under organizations like the SBDC.
Some coworking spaces are geared to specific niches like startups or technology. Some might stress sustainability projects. In some communities, dedicating a space to a particular industry or life stage in a business is a good conduit, while in others it can be too limiting. Find out what the demand is for things like that in your area.
Wooing Younger Generations
Chamber membership has been a difficult sell to younger generations. Creating a coworking space is a great way to attract a younger business professional and give them a taste of chamber membership from a very close vantage point.
If you’re thinking you’d like your chamber to start a coworking space, there’s a lot to consider. However, it can be a solid tie-in to the chamber’s mission of helping businesses grow, not to mention, an excellent source of non-dues revenue.