Is Co-Working Space a Profitable Business?
March 29, 2022
The dynamics in office space are changing with an increasing demand for coworking office spaces. As per DeskMag’s recent report, at least 40% of all coworking businesses are profitable. To understand the coworking industry more, you can talk to venture X Franchise experts.
It’s estimated that most Americans are venturing into self-employment job models that offer flexible working hours and freedom of working space. These include independent contractors, freelancers, and on-demand workers.
A large percent (62%) of coworking space earns their money from desk rent-outs. Among these, one in ten spaces makes their money entirely from desk rentals. An average shared space brings in 10% revenue from event and meeting room rentals. In addition, food and beverage and ticket sales to events and workshops bring in another 5% each. Here are a few things to get you started in evaluating whether a co-working space is a profitable business.
What’s a Coworking Space?
A coworking space is also called a shared office or a shared workspace. As the name suggests, entrepreneurs, startups, businesses, developers, freelancers, and different teams can meet together in one space and work independently. In addition, they might assemble to socialize or collaborate on projects. Nevertheless, a coworking space can handle networking or work as a relaxing space and functions as a shared workspace.
In its capacity as a specific social cell with a shared economy concept, coworking space has evolved into a profitable business model in the following ways:
Boost Employee Satisfaction
A coworking space can restructure the daily routines witnessed in typical offices. Office workers may be concerned about future job security because of low empowerment. However, coworking offices offer off-site meetings and flexible office hours.
Coworking spaces also grant employers the ability to offer their employees a high-end working space that they can’t afford right away. That may include spacious meeting rooms, relaxing break-out spaces, and lifestyle perks like community drinks, premium coffee, member yoga classes, and more. Overall, employee satisfaction is necessary for increased productivity.
Advanced Revenue Stream
People need to collaborate in diverse ways and spaces to execute short-term and long-term tasks. Coworking space provides multiple streams of revenue in various places. The space owner can leverage this as a source of profit. You can run a coworking space in many models, but every model will include options to monetize the space, human resources, or a piece of equipment.
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Anyone taking out space can leverage this option—even those cheap coworking spaces. Because many individuals involved in the different industries are present, you can get things moving by tapping into new ideas and leveraging opportunities. Most professionals can increase their productivity. They may also nurture a collaborative environment, a cornerstone for a thriving business. Overall, a shared working space creates an inspiring working experience.
if you measure them against a proper office space, coworking spaces are more flexible. They offer adjustable working hours. This makes it possible for you to foster new ways of working and enjoy your working style better. You are also in for multiple choices, from conference rooms and private cabins to decent desks. And during work breaks, you can access amenities like lounge areas and cafeterias.
In addition, businesses need a flexible space to be agile with their workspace demands, making a coworking space a fruitful solution. This space allows for short-term or long-term arrangements depending on the business needs.
Most works like freelancing require massive concentration (100%) for optimum productivity. In this case, a freelance may fall victim to space if it doesn’t permit 100% concentration for their work. However, with a dedicated coworking space, this is made possible.
Reduce Financial Risks
One of the primary reasons people opt for a coworking space is its affordability. Office rental costs are mandatory expenditures for companies. Therefore, they need to be minimal and reliable. Coworking has a flexible cost structure. Businesses can leverage this aspect to reduce long-term risks and manage costs. Coworking spaces also have an all-inclusive rate that accounts for office necessities such as electricity, water, pantry essentials, and communication systems. This helps protect businesses from daily, weekly, and monthly unpleasant surprises.
A company also needs to update its traditional office with considerable investments and maintenance costs during its expansion phase. Instead, these companies can opt for a shared office to cut expansion and operational expenses. Coworking spaces offer viable solutions, including access to dedicated desks or small private offices.