Just as Airbnb and Uber have disrupted the traditional hotel and taxi industries, co-working space will soon do the same to traditional office real estate. The number of co-working spaces worldwide was 7,800 in 2015; that’s a 36% increase from 2014.
Forbes is projecting more than 26,000 spaces hosting 3.8 million people by 2020, with the emergence of millennials in the workplace. If you want to reap the benefits of an early adopter, now is the time to open and operate a co-working space.
Generally speaking, a co-working space describes any situation in which two or more people are working in the same place, but not for the same company. Such a space operates under no specific industry and can serve a business of any size. Co-working is a bit like home or ride sharing, but with office space. Common amenities of co-working spaces include: Wi-Fi, kitchens, private offices, conference rooms, open desks, communal zones, social spots, outdoor areas, and free coffee.
Why do people choose a co-working space?
Motivations behind co-working include community, autonomy, independence, choice and meaning. Working in such a diverse environment provides opportunities to network, make friends, save money, learn from others and maintain focus on your core business. It is no surprise that the Harvard Business Review find that people who belong to co-working spaces report levels of thriving that are higher than the average for employees who do their jobs in regular offices.
Irrespective to its positive effects on productivity in the work place, one should consider owning and/or operating a co-working space for the same reasons they would any other business—profitability. Although only 40% of the spaces are profitable today, the percentage has risen for four years running, as it was 32% in 2013. Most importantly, 72% of co-working spaces reach profitability after two years of operation. When considering that only 20% of new businesses survive past their first year of operation, these figures are promising.
In addition to doing market research, developing a business plan, and choosing an optimal location, there are some other components that should be given strong consideration when opening a co-working space, in order to be successful. One such component is the interior design. It is imperative that the design reflects the space’s core principles and target the market’s values. Without working there or speaking to a single member, prospective users make up their mind about the space within seconds of seeing it.
Another such component is community building.
In this context, community refers to the relationships built between your members, as opposed to the geographic location of the work space. For the community to be strong, create opportunities for the group to talk, network, collaborate, problem solve, and socialize. Consider hosting events and creating groups on social media platforms. Likewise, targeting niche categories such as musicians and artists can build a strong sense of community.