This article was written by our expert who is surveying the industry and constantly updating the business plan for a coworking space.
Our business plan for a coworking space will help you build a profitable project
Starting a coworking space requires careful financial planning and location analysis to ensure profitability from day one.
This comprehensive guide breaks down all the critical cost factors, revenue projections, and operational considerations you need to evaluate before signing your lease. We cover everything from target occupancy rates to break-even calculations, giving you the concrete numbers needed to make informed decisions about your coworking space venture.
If you want to dig deeper and learn more, you can download our business plan for a coworking space. Also, before launching, get all the profit, revenue, and cost breakdowns you need for complete clarity with our coworking space financial forecast.
Launching a successful coworking space requires balancing location costs, operational expenses, and revenue potential to achieve profitability within 12-18 months.
The key financial benchmarks include targeting 40-70 desks, achieving 70-90% occupancy rates, and calculating break-even points based on local market conditions and pricing structures.
| Cost Category | Typical Range | Key Considerations |
|---|---|---|
| Target Capacity | 40-70 desks in first year | Aim for 0.6-0.8 members per desk initially, scaling to 70-90% occupancy |
| Rental Costs | $300-$400/sqm/month in major cities | Grade A office space varies by location; Bangkok ~$30/sqm/month |
| Monthly Operating Costs | $5,000-$10,000 total | Includes utilities ($1-3k), internet ($60-500), cleaning ($500-1.5k), maintenance ($1-4k) |
| Setup Investment | $50,000-$300,000 | Furniture/fit-out ($150-350/sqm), technology ($5-50k), deposits (3-6 months rent) |
| Revenue per Desk | $300-$900/month average | Hot desks $150-600, dedicated $300-1,200, private offices $600-2,000+ |
| Break-even Timeline | 12-18 months | Requires 65-75% occupancy rate sustained over time |
| Lease Terms | 2-4 years initial | Shorter terms for new operators, flexibility for expansion options |
What is the target number of members or desks that your coworking space must accommodate within the first year?
Your coworking space should target between 40 and 70 desks in the first year, with an optimal goal of 54 members and 67 desks by year-end.
Most successful coworking spaces start with a member-to-desk ratio of 0.6 to 0.8, meaning you'll have fewer members than total desks available initially. This allows for flexibility as members don't use their desks every single day, especially in hybrid work arrangements.
Industry benchmarks show that achieving 70-90% occupancy rates indicates a thriving coworking operation. Start conservatively with 40 desks if you're in a smaller market or testing demand, but plan for 70 desks if you're in a high-demand urban area with strong coworking penetration.
The exact number depends on your space size, local market demand, and initial marketing reach, but staying within this 40-70 range gives you the best chance of sustainable growth without overcommitting resources.
What are the average rental costs per square meter in your specific city or neighborhood?
Rental costs vary dramatically by location, but Grade A office space in major cities typically ranges from $300-$400 per square meter per month.
In Bangkok, for example, current Grade A office rental rates are approximately $30 per square meter per month (THB 942), making it significantly more affordable than Western markets. San Francisco commands premium rates around $61 per square foot annually, while most major US metros fall in the $300-$400 per square meter monthly range.
Research your specific neighborhood thoroughly, as costs can vary 50-100% between prime downtown locations and emerging business districts. Grade B properties or fringe areas often offer 20-40% cost savings while still providing adequate access and amenities for coworking members.
Factor in that coworking spaces typically need 15-25% more space per person than traditional offices due to common areas, meeting rooms, and social spaces that drive member satisfaction and retention.
What additional monthly costs should be factored in beyond rent?
Monthly operating expenses for coworking spaces typically total $5,000-$10,000 for medium-sized facilities, covering essential utilities and maintenance.
| Expense Category | Monthly Cost Range | Details and Considerations |
|---|---|---|
| Utilities (Electricity, Water, Gas) | $1,000 - $3,000 | Higher costs in extreme climates due to HVAC demands; varies with space size and local utility rates |
| Internet and Telecommunications | $60 - $500 | Business-grade fiber essential; redundant connections recommended; higher speeds for tech-focused members |
| Cleaning and Janitorial | $500 - $1,500 | Daily cleaning critical for member satisfaction; includes restroom maintenance, kitchen upkeep, and common areas |
| General Maintenance | $1,000 - $4,000+ | HVAC servicing, equipment repairs, furniture replacement, building maintenance; varies significantly by building age |
| Security Services | $300 - $1,200 | 24/7 access control systems, security monitoring, key card management for member access |
| Insurance | $200 - $800 | General liability, property insurance, cyber liability for member data protection |
| Software and Technology | $200 - $600 | Coworking management platforms, booking systems, member apps, accounting software subscriptions |
You'll find detailed market insights in our coworking space business plan, updated every quarter.
What is the typical lease duration offered in this market, and what flexibility exists?
New coworking space operators typically secure initial lease terms of 2-4 years, with shorter terms preferred for first-time ventures.
Smaller and newer coworking operators tend toward 2-3 year initial commitments, which provides enough time to establish operations while limiting long-term risk if the location proves challenging. More established operators with proven track records can often negotiate 5-10 year agreements with better rental rates.
Flexibility options to negotiate include renewal clauses, expansion rights to adjacent spaces, early termination provisions, and rent escalation caps. Some landlords offer revenue-sharing models instead of fixed rent, particularly in emerging markets or when they want to reduce tenant risk.
Consider negotiating for fit-out periods (rent-free months during construction), graduated rent increases, and break clauses at specific intervals. The key is balancing rental rate savings with operational flexibility as your coworking space evolves.
What one-time setup costs need to be budgeted for your coworking space launch?
Total setup investment for coworking spaces ranges from $50,000 to $300,000, depending on space size, location, and quality level.
- Furniture and Fit-out ($150-$350 per square meter): Desks, chairs, lounge seating, meeting room furniture, kitchen equipment, and storage solutions designed for heavy daily use
- Technology Infrastructure ($5,000-$50,000): WiFi networking equipment, access control systems, security cameras, printing stations, AV equipment for meeting rooms, and member management software setup
- Branding and Signage ($2,000-$10,000+): Exterior and interior signage, wall graphics, wayfinding systems, and branded materials that create professional atmosphere
- Security Deposits (3-6 months' rent): Standard commercial lease requirement, often negotiable based on creditworthiness and guarantees
- Professional Services ($5,000-$20,000): Interior design, legal fees for lease review, architectural plans for fit-out, permits and licensing
This is one of the strategies explained in our coworking space business plan.
What are the local property taxes, service charges, and insurance costs affecting total occupancy cost?
Additional property-related costs typically add 15-25% to your base rent, significantly impacting your total occupancy expenses.
Property taxes and local service fees generally represent 10-15% of base rent in most global cities, though this varies considerably by jurisdiction. Some markets include these in gross rent quotes, while others charge them separately as operating expenses.
Building service and maintenance charges commonly range from $2-$8 per square meter monthly, covering shared building costs like lobby maintenance, elevators, common area utilities, and security services. Higher-end buildings with premium amenities charge toward the upper end of this range.
Property insurance costs fall between $0.30-$2.00 per square meter monthly, depending on coverage levels and location risk factors. This covers general liability, property damage, and increasingly important cyber liability protection for member data security.
What transport connections, parking availability, and commuting times will impact member satisfaction?
Location accessibility directly correlates with member acquisition and retention, making transport connectivity a crucial factor in coworking space success.
Prime coworking locations feature proximity to public transport hubs including metro stations, bus terminals, and train connections within 5-10 minutes walking distance. Members consistently prioritize locations that keep their door-to-desk commute under 30 minutes from major residential areas.
Parking availability becomes critical in car-dependent markets, where inadequate parking can eliminate 40-60% of your potential member base. Consider both on-site parking availability and nearby public or street parking options, along with their associated costs for members.
Evaluate emerging transport options like bike-sharing stations, electric scooter availability, and ride-sharing pickup zones that appeal to younger demographics. Poor connectivity or limited transport options rapidly decrease location attractiveness and can justify 20-30% lower membership fees.
What amenities and services are expected in your market, and what do they cost to provide?
Modern coworking spaces must provide competitive amenities to justify premium pricing, with costs varying significantly based on service level and market expectations.
| Amenity/Service | Monthly Cost Range | Implementation Details and Considerations |
|---|---|---|
| Café or Beverage Service | $300 - $2,000 | Basic coffee station to full café operation; staff costs, equipment leasing, inventory management required |
| Fitness/Gym Access | $1,000 - $5,000 | On-site gym equipment and maintenance or partnership agreements with nearby fitness centers |
| Meeting and Conference Rooms | Built into rent | Essential amenity; typically 20-30% of total space allocation, includes AV equipment and booking systems |
| Printing and Mail Services | $100 - $500 | Commercial-grade printers, scanning stations, mail handling, and package acceptance services |
| Event Space and Programming | $500 - $2,000 | Community events, networking sessions, educational workshops; includes staffing and marketing costs |
| Childcare Services | $2,000 - $8,000 | Licensed childcare providers, dedicated space, insurance, and regulatory compliance requirements |
| Phone Booth/Private Spaces | $200 - $800 | Soundproofed phone booths for private calls, essential for open workspace environments |
What is the current demand for coworking in your chosen area, and how does competitor pricing compare?
Coworking demand remains robust in prime city locations with overall occupancy rates maintaining 70-90% across successful facilities.
Market research should include analyzing competitor pricing structures, occupancy levels, and member composition to identify pricing opportunities and service gaps. Hot desk memberships typically range $150-$600 monthly, dedicated desks $300-$1,200, and private offices $600-$2,000+ depending on market maturity and location premium.
Study competitor websites, visit their locations during peak hours, and analyze their member reviews to understand pricing justification and service quality expectations. Look for markets with 2-3 existing operators rather than completely saturated areas with 10+ competitors fighting for market share.
Growth markets show increasing demand from remote workers, startup companies, and enterprise teams seeking flexible office solutions. Target areas with growing freelancer populations, increasing small business registrations, and companies adopting hybrid work policies.
What financial model best balances risk and flexibility for this location?
The optimal financial model depends on your risk tolerance, available capital, and negotiation leverage with property owners.
Fixed lease agreements provide operational control and predictable costs but require higher upfront capital and carry full occupancy risk if demand disappoints. This model works best for operators with strong financial backing and confidence in market demand.
Revenue-sharing arrangements reduce base lease costs while giving landlords upside participation in your success. Typical structures include lower base rent (40-60% of market rate) plus 10-20% of gross revenue sharing, providing more flexibility during ramp-up periods.
Management agreement models position you as the operator earning management fees (typically 8-15% of revenue) while the landlord maintains ownership and major financial risk. This model requires less capital but limits your upside potential and operational control.
What revenue per member or desk can realistically be expected based on local market conditions?
Weighted average revenue per desk typically ranges $300-$900 monthly, varying significantly based on membership mix and local market positioning.
| Membership Type | Monthly Revenue Range | Typical Usage Pattern | Market Positioning |
|---|---|---|---|
| Hot Desk | $150 - $600 | 8-12 days per month | Entry-level, freelancers, part-time remote workers |
| Dedicated Desk | $300 - $1,200 | 15-22 days per month | Regular remote workers, small business owners |
| Private Office (1-2 person) | $600 - $1,500 | Full-time usage | Consultants, small teams, confidential work requirements |
| Private Office (3-6 person) | $1,200 - $3,000 | Full-time team usage | Growing companies, established remote teams |
| Enterprise Membership | $2,000 - $5,000+ | Multiple employees, flexible access | Large companies with distributed teams |
| Meeting Room Hourly | $25 - $150/hour | Occasional usage | Additional revenue stream for all member types |
| Event Space Rental | $200 - $1,000/event | Evening/weekend usage | External bookings, community events |
We cover this exact topic in the coworking space business plan.
What break-even point should be calculated before committing to the lease?
Break-even typically occurs at 65-75% sustained occupancy rates, achieved within 12-18 months for well-positioned coworking spaces.
Calculate your break-even occupancy by dividing total monthly costs (rent, utilities, staff, loan payments) by your average revenue per occupied desk. For example, if monthly costs total $15,000 and average desk revenue is $500, you need 30 occupied desks to break even.
Most successful coworking operations target break-even by month 12-15, allowing 6-9 months for initial marketing, member acquisition, and occupancy ramp-up. Spaces with strong pre-leasing or corporate partnerships can achieve break-even within 6-9 months.
Factor in seasonal variations, member churn rates (typically 5-15% monthly), and local market competition when projecting occupancy growth curves. Build conservative scenarios assuming slower ramp-up to ensure your financing can weather extended break-even timelines.
Conclusion
Launching a profitable coworking space requires thorough financial analysis of location costs, operational expenses, and revenue potential to ensure sustainable growth and profitability within your target timeline.
This article is for informational purposes only and should not be considered financial advice. Readers are encouraged to consult with a qualified professional before making any investment decisions. We accept no liability for any actions taken based on the information provided.
Understanding the full financial picture of your coworking space venture extends beyond location and setup costs to include ongoing operational considerations and revenue optimization strategies.
Market dynamics, competition analysis, and member acquisition costs all play crucial roles in determining long-term success and profitability in the competitive coworking industry.
Sources
- OfficeRnD - Occupancy Rates Guide
- Deskmag - Opening Coworking Spaces First Year Statistics
- OptixApp - US Coworking Industry Benchmarks
- Cushman Wakefield - Thailand Market Beat
- Dojo Business - Coworking Space Monthly Maintenance Expenses
- Gable - Cost Comparison Flexible Spaces vs Office Leases
- Mesh Cowork - Monthly Coworking Costs Breakdown Guide
- JustCo - Office Rental Expenses
