The popularity of shared workspaces, where professionals and entrepreneurs can come together in a shared office-style environment, is rising—especially in urban areas around the country. The trend is fueled by a number of factors:
- Tech startup pace. Startups can be conceived and created faster than ever before, thanks to the availability of public online resources, like those offered by the SBA. Entrepreneurs can also work on their tech projects remotely, which may not require investing in an office.
- Millennial preferences. According to Nielsen data, millennials prefer living in densely populated urban areas, which is driving growth in shared building and resources like shared workspaces.
- Startup hubs and communities. More and more, entrepreneurship is gravitating toward small, hub-like communities, which shared workspaces both influence and support.
Seeing these factors, you may consider taking advantage of the trend for your own personal gain—whether that’s in profit or simply making more connections.
But what does it take to start a shared workspace of your own? And is it feasible?
These are the first things you’ll need to get started:
1. A plan for profitability.
Even if your main goal isn’t to make money off the idea, you’ll still want a profitability plan in place to ensure you stay cash flow positive. Most shared workspaces offer different levels of services for different professionals. For example, they may offer day passes and meeting room rentals as one-time fees, or monthly passes that allow 24-7 access for a fixed monthly amount. Make sure you document all of your expenses and make detailed, accurate projections of how much income your business could stand to make. You’ll need to make your operation cash flow positive, one way or another.
2. A desirable space.
Much of your success will depend on where your shared workspace is located. It needs to be readily available to a large population, usually in a downtown or heavily populated suburban area, or else people won’t want to make the commute to get there. It needs to be attractive and distinctive, yet not so expensive that it interferes with delicate startups’ budgets. Plus, it needs to be something you can afford. Finding a space that suits all these needs, in a city that’s friendly to entrepreneurs, can be a major challenge.
3. Provisions and backup plans.
You’ll need some basic provisions for your workers to feel secure working reliably in your building. Internet and electricity are a given, but make sure you have a backup plan in place for both, should they ever go out. For example, in case the internet ever cuts out, it’s a good idea to have a mobile hotspot ready, like the ZTE velocity mobile hotspot (as recommended by Mr. Aberthon). In case the electricity ever cuts out, you’ll want available uninterruptable power supplies (UPSs), like the APC BR1000G Back-UPS Pro (as recommended by the Wirecutter).
4. Private offices and meeting rooms.
Not all of your clients will want or need private offices and meeting rooms, but the options should be available to entrepreneurs who do. Decorate these upgraded areas with nice-looking furniture, and don’t be afraid to charge a premium for their use. These will be main draws for the one-time-use crowd.
5. A unique value proposition (UVP).
Like any business, your shared workspace is going to need some kind of unique value proposition (UVP). There are thousands of shared workspaces around the country right now, and in your city, there are likely already a few. Why should people go to yours, rather than someone else’s? Your shared workspace should have its own brand, its own image, and a strong pitch that tells people why it’s better than the competition—or at least different enough to differentiate it. As the visionary of your operation, this is entirely up to your creativity.
6. A strategy for growth.
Finally, you’ll need some strategy in place to grow your audience over time. You may be able to get by with a handful of initial subscribers to your model, but if you want to be consistent and continue to make a profit, you’ll need to stabilize with a steady inbound flow of customers. Consider investing in a marketing strategy, or institute a referral program.
Is a Shared Workspace Right for You?
Shared workspaces aren’t an investment that works for everybody. You’ll need a substantial amount of upfront capital, experience working with entrepreneurs, and a unique spin on the business—not to mention a near-perfect location. However, shared workspaces are booming, and if you can find a good place and back it up with good timing and strategy, you’ll have the potential to create a lucrative business for yourself while simultaneously boosting the local economy.