Skip to content

Get all the financial metrics for your coworking space

You’ll know how much revenue, margin, and profit you’ll make each month without having to do any calculations.

Coworking Space: Our Business Plan

This article was written by our expert who is surveying the industry and constantly updating the business plan for a coworking space.

coworking space profitability

Starting a coworking space requires thorough planning and understanding of market dynamics.

The coworking industry has reached $25.11 billion globally in 2025, with over 3.1 million users worldwide, creating significant opportunities for new operators who understand the fundamentals of location targeting, financial planning, and community building.

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.

Summary

This comprehensive guide breaks down the essential components of launching a successful coworking space in 2025, covering market analysis, financial projections, and operational strategies.

The coworking market shows strong growth potential with specific demographic targets, proven pricing models, and clear paths to profitability for well-planned ventures.

Key Aspect Details Market Data
Target Market Freelancers, startups, remote workers, small businesses aged 25-45 3.1+ million global users, 540 million freelancers by 2027
Startup Costs $500-$1,500 per sqm including fit-out, furniture, technology 100-desk space requires $150,000-$400,000 initial investment
Occupancy Rates 30-50% year 1, 55-65% year 2, 70-80% year 3 Mature markets achieve 51-70%, prime locations reach 75%+
Pricing Structure Hot desk $150-$250, Dedicated $250-$400, Private office $500-$900 Market rates vary by location with 15-30% revenue from ancillary services
Breakeven Point 55-70% occupancy rate for 100-desk space 12-24 months average time to breakeven
Financial Projections 15-23% EBITDA margins for stabilized spaces $500K-$1M+ annual revenue for mid-size operations
Technology Investment $10-$20K initial setup, $500-$1,500 monthly software costs Essential for member management, booking, and security systems

Who wrote this content?

The Dojo Business Team

A team of financial experts, consultants, and writers
We're a team of finance experts, consultants, market analysts, and specialized writers dedicated to helping new entrepreneurs launch their businesses. We help you avoid costly mistakes by providing detailed business plans, accurate market studies, and reliable financial forecasts to maximize your chances of success from day one—especially in the coworking space market.

How we created this content 🔎📝

At Dojo Business, we know the coworking market inside out—we track trends and market dynamics every single day. But we don't just rely on reports and analysis. We talk daily with local experts—entrepreneurs, investors, and key industry players. These direct conversations give us real insights into what's actually happening in the market.
To create this content, we started with our own conversations and observations. But we didn't stop there. To make sure our numbers and data are rock-solid, we also dug into reputable, recognized sources that you'll find listed at the bottom of this article.
You'll also see custom infographics that capture and visualize key trends, making complex information easier to understand and more impactful. We hope you find them helpful! All other illustrations were created in-house and added by hand.
If you think we missed something or could have gone deeper on certain points, let us know—we'll get back to you within 24 hours.

What is the specific target market in terms of location, demographics, and size, and how large is the potential demand in numbers?

The coworking space target market centers on freelancers, startups, remote workers, and small businesses seeking flexible professional environments.

Demographically, your primary users are aged 25-45, urban-based, tech-savvy professionals with an even gender split. These individuals value networking opportunities, flexible lease terms, and professional amenities without long-term commitments.

Prime locations include major cities with tech clusters and dense urban populations. North America leads growth, especially in the U.S. with over 7,700 sites covering 140 million square feet. Asia-Pacific markets, particularly China, India, and Southeast Asia, show rapid expansion alongside European capitals.

The global coworking market represents $25.11 billion in revenue for 2025, serving 3.1+ million users worldwide. Large cities like Los Angeles, Dallas, and Manhattan each support 270-300 coworking spaces, indicating substantial market capacity.

Demand drivers include the projected 540 million global freelancers by 2027, increased startup activity, and corporate adoption of hybrid work models, creating consistent growth potential for new coworking space operators.

What is the clear value proposition that differentiates this coworking space from competitors, and how is it positioned in the market?

Successful coworking spaces in 2025 differentiate through strong community value, smart technology integration, and hyper-personalized services beyond basic desk provision.

The most effective positioning focuses on facilitating meaningful networking, curated events, and fostering a genuine sense of belonging among members. This community-first approach creates stickier relationships and higher retention rates than spaces that only provide physical workspace.

Alliance and partnership models enhance value by allowing members to access multiple locations, effectively expanding their workspace options. This network effect becomes a significant competitive advantage over standalone operators.

Niche specialization targeting specific industries (tech hubs, creative studios) or interest groups gains traction by serving specialized needs more effectively than generic spaces. This focused approach allows for premium pricing and stronger member loyalty.

Unique amenities, sustainability initiatives, and flexible hybrid use (combining event spaces with office functions) create additional differentiation points that appeal to environmentally conscious and versatility-seeking professionals.

You'll find detailed market positioning strategies in our coworking space business plan, updated every quarter.

What is the projected occupancy rate for the first three years, and what data supports these estimates?

Coworking spaces typically project occupancy rates of 30-50% in year one, 55-65% in year two, and 70-80% by year three, depending on location and execution quality.

These projections are based on mature market data showing occupancy rates from 51-70%, with prime locations achieving 75% or higher. The growth trajectory reflects the time required to build community awareness, establish member referral networks, and optimize space utilization.

Year one challenges include initial marketing ramp-up, community building from zero, and operational adjustments. The 30-50% range accounts for these learning curve factors while establishing foundational membership.

Year two improvement to 55-65% reflects established word-of-mouth marketing, refined service offerings, and increased local market presence. Corporate partnerships and B2B relationships typically strengthen during this period.

Year three targets of 70-80% represent stabilized operations with optimized pricing, strong community networks, and diversified revenue streams contributing to sustained high occupancy levels.

business plan shared office space

What is the detailed breakdown of startup costs, including lease, fit-out, furniture, technology, marketing, and working capital?

Cost Category Percentage of Total Startup Costs Description and Examples
Lease/Deposit 20-30% 3-6 months advance rent, security deposits, legal fees for lease negotiation
Fit-out/Construction 25-35% Interior design, construction, electrical/plumbing, flooring, lighting, HVAC modifications
Furniture & Equipment 15-25% Desks, chairs, meeting room furniture, lounge areas, kitchen equipment, storage solutions
IT/Technology 7-10% Wi-Fi infrastructure, security systems, booking software, member management platforms
Marketing/Launch 5-8% Pre-launch marketing campaigns, website development, signage, opening events, initial advertising
Working Capital 10-15% 3-6 months operating expenses including staff salaries, utilities, insurance, supplies
Professional Services 3-5% Legal fees, accounting setup, permits and licenses, architectural consultation

Total startup costs typically range $500-$1,500 per square meter, varying significantly by city, specification level, and local market conditions.

What is the chosen pricing model, including membership tiers, day passes, private offices, and additional services, and how does it compare to market averages?

Most successful coworking spaces implement a tiered pricing structure with hot desk, dedicated desk, and private office options, plus day passes and ancillary services.

Membership Type European Market Average (Monthly) What's Included
Hot Desk $150-$250 Flexible seating, basic amenities, Wi-Fi, kitchen access, community events
Dedicated Desk $250-$400 Reserved workspace, storage, all hot desk benefits, priority booking
Private Office $500-$900 per desk Lockable space, phone booth access, meeting room credits, full amenities
Day Pass $25-$45 Single day access, Wi-Fi, basic amenities, trial membership option
Meeting Room Rental $15-$50 per hour Professional meeting spaces, AV equipment, refreshments available
Virtual Office $50-$150 Business address, mail handling, phone answering, limited workspace access
Corporate Memberships 10-20% volume discount Bulk memberships for companies, custom billing, dedicated account management

Pricing trends show growing entry-level options and flexible pass structures bundled with service packages for upselling opportunities, with 15-30% of revenue coming from ancillary services.

What is the monthly breakeven point in terms of members or revenue, and how many months are forecasted to reach it?

The monthly breakeven point for a typical 100-desk coworking space requires 55-70 paying members at market rates, translating to 55-70% occupancy.

This calculation divides total fixed costs (rent, utilities, staff, technology) by average revenue per member. For example, if monthly fixed costs total $35,000 and average member revenue is $300, the breakeven point equals 117 members or approximately 60% occupancy.

Industry data shows most coworking spaces reach breakeven within 12-24 months post-opening, with significant variation based on location, competition, and execution quality. Prime urban locations with strong demand may achieve breakeven in 8-12 months, while secondary markets might require 18-30 months.

Key factors accelerating breakeven include effective pre-launch marketing, competitive pricing aligned with market rates, strong community programming that drives referrals, and diversified revenue streams beyond basic memberships.

Conservative financial planning should assume 18-24 months to breakeven, ensuring adequate working capital to sustain operations through the initial growth phase while building sustainable member communities.

This is one of the strategies explained in our coworking space business plan.

What is the marketing and sales strategy, with specific channels, budget allocations, and measurable customer acquisition goals?

Effective coworking space marketing combines digital channels, local partnerships, and community-driven strategies to attract and convert target members.

  • Digital Marketing (40% of budget): SEO-optimized website, Google Ads targeting "coworking" keywords, social media presence on LinkedIn and Instagram, content marketing showcasing member success stories
  • Local Partnerships (25% of budget): Relationships with startup incubators, business schools, freelancer meetups, and corporate partners seeking flexible workspace solutions
  • Referral Programs (15% of budget): Member referral incentives, corporate partnership bonuses, influencer collaborations with local business leaders
  • Events and Community Building (10% of budget): Regular networking events, workshops, lunch-and-learns, open house tours for prospects
  • Traditional Marketing (10% of budget): Local print advertising, radio sponsorships, outdoor signage, business directory listings

Budget allocation typically represents 5-10% of total startup capital for year one marketing, with monthly marketing spend averaging 8-12% of gross revenue during operations.

Measurable goals include generating 15-25 qualified tours per week, achieving 20-30% tour-to-member conversion rates, targeting 15-20% month-over-month membership growth during the first year, and maintaining member referral rates above 25% of new acquisitions.

Success metrics focus on cost per acquisition (target: $150-$300 per new member), lifetime value to acquisition cost ratios (target: 3:1 or better), and member retention rates (target: 80%+ annual retention).

What operational structure will be implemented, including staff roles, salaries, management systems, and daily processes?

A typical 100-150 member coworking space requires 3-5 core staff members to maintain quality operations and member satisfaction.

Role Responsibilities Salary Range (Annual)
Community Manager Member onboarding, event planning, conflict resolution, community building, member retention $35,000-$55,000 depending on market
Operations Manager Facility maintenance, vendor relationships, inventory management, space optimization, safety protocols $40,000-$60,000 depending on market
Front Desk/Admin Reception duties, tour giving, basic customer service, mail handling, phone answering $28,000-$40,000 depending on market
Part-time Cleaner Daily cleaning, restocking supplies, basic maintenance, trash removal $15,000-$25,000 depending on hours
General Manager Overall operations, financial management, strategic planning, staff supervision $50,000-$80,000 depending on market

Daily processes include member check-ins, space utilization monitoring, cleaning protocols, security rounds, and maintenance issue resolution, all managed through integrated software systems.

Management systems typically include member management software, booking platforms, financial tracking tools, and communication systems that automate routine tasks and provide operational analytics for continuous improvement.

business plan coworking space

What is the technology infrastructure required, including booking systems, Wi-Fi standards, security, and member apps, and what is the estimated cost?

Modern coworking spaces require robust technology infrastructure to deliver seamless member experiences and efficient operations.

Technology Component Specifications and Requirements Estimated Costs
Wi-Fi Infrastructure Enterprise-grade routers, 1GB+ internet, 99% uptime guarantee, guest and member networks $3,000-$8,000 setup + $500-$1,500 monthly
Member Management Software Billing automation, access control, member portal, analytics dashboard, mobile app $200-$800 monthly subscription
Booking System Meeting room reservations, desk booking, event scheduling, resource management $100-$400 monthly integrated cost
Security Systems Key card access, CCTV cameras, alarm systems, remote monitoring capabilities $5,000-$12,000 setup + $100-$300 monthly
Audio/Visual Equipment Meeting room displays, video conferencing, sound systems, presentation equipment $8,000-$15,000 total investment
Printing Solutions Multi-function printers, scanning capabilities, secure printing, usage tracking $3,000-$6,000 equipment + supplies
Phone Systems VoIP solutions, virtual receptionist, call forwarding, business line services $1,500-$3,000 setup + $200-$500 monthly

Total initial technology investment typically ranges $15,000-$25,000 for a 100-desk space, with ongoing monthly technology costs of $800-$1,800 including software subscriptions, internet, and maintenance contracts.

What are the key risks such as vacancy fluctuations, competition, or economic downturns, and what mitigation strategies are in place?

Coworking spaces face multiple risk factors that require proactive management strategies to ensure business continuity and profitability.

Demand fluctuation risks include economic downturns reducing freelancer spending, corporate budget cuts affecting workspace allowances, and seasonal variations in membership levels. Mitigation involves diversifying member types, offering flexible contract terms, and maintaining 3-6 months cash reserves.

Competition risks emerge from new coworking spaces, traditional office landlords offering flexible terms, and remote work reducing overall demand. Counter-strategies include strong community building, unique value propositions, and strategic partnerships that create switching costs.

Operational risks encompass rising real estate costs, staff turnover, technology failures, and regulatory changes. Protection measures include negotiating rent escalation caps, cross-training staff, maintaining technology redundancies, and staying current with local regulations.

Financial risks involve cash flow gaps, member payment defaults, and unexpected capital expenditures. Management approaches include implementing automated billing, requiring deposits, maintaining equipment reserves, and negotiating flexible lease terms with landlords.

Successful risk mitigation combines diversified revenue streams, strong community retention strategies, flexible cost structures, and conservative financial planning that can weather typical business cycle variations.

We cover this exact topic in the coworking space business plan.

What revenue diversification opportunities exist, such as events, partnerships, or ancillary services, and what percentage of revenue could they represent?

Revenue diversification beyond basic memberships can represent 15-30% of total revenues for mature coworking spaces, significantly improving profitability and member value.

  • Event Hosting (5-10% of revenue): Workshops, networking events, corporate training sessions, product launches, and private parties generate rental fees and catering commissions
  • Meeting Room Rentals (3-8% of revenue): Hourly bookings for non-members, video conference facilities, presentation spaces, and interview rooms provide high-margin income
  • Vendor Partnerships (2-5% of revenue): Coffee shops, food trucks, massage services, dry cleaning, and other convenience providers pay commission or rent
  • Business Services (3-7% of revenue): Mail handling, printing services, notary services, business registration assistance, and administrative support
  • Corporate Training (2-6% of revenue): Professional development workshops, team building activities, and skills training programs for member companies
  • Membership Upsells (5-10% of revenue): Premium services, extended hours access, additional storage, dedicated parking, and concierge services

High-performing spaces also generate revenue through community partnerships with local businesses, referral fees from service providers, equipment rental (projectors, whiteboards), and branded merchandise sales.

The key to successful diversification lies in understanding member needs and preferences, then developing services that enhance the core workspace experience while generating meaningful additional income streams that justify operational complexity.

business plan coworking space

What is the five-year financial projection including revenue, expenses, EBITDA, cash flow, and return on investment, and how does it align with industry benchmarks?

Year Revenue Operating Expenses EBITDA Cash Flow
Year 1 $280,000 $320,000 -$40,000 (-14%) -$85,000
Year 2 $450,000 $380,000 $70,000 (16%) $25,000
Year 3 $620,000 $465,000 $155,000 (25%) $110,000
Year 4 $750,000 $540,000 $210,000 (28%) $165,000
Year 5 $820,000 $590,000 $230,000 (28%) $185,000

Industry benchmarks show EBITDA margins of 15-23% for stabilized coworking spaces, with mature operations reaching 25-30% margins through optimized occupancy and diversified revenue streams.

Return on investment typically achieves positive territory by years 3-4, with full ROI realization within 5-6 years for well-executed spaces. Total investment recovery depends on initial capital requirements and operational efficiency improvements over time.

Cash flow turns positive by late year 2 or early year 3, aligning with industry investor benchmarks. Revenue growth rates moderate after year 3 as occupancy stabilizes, with growth coming primarily from pricing optimization and ancillary service expansion.

Conclusion

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.

Sources

  1. Archie App - Coworking Statistics
  2. OfficeRnD - Coworking Space Industry
  3. Coworkies Book - 2025 Mid-Year Coworking Trends
  4. 2727 Coworking - The Coworking Industry in 2025
  5. Optix App - European Coworking Market
  6. Cognitive Market Research - Coworking Space Market Report
  7. Straits Research - Coworking Spaces Market
  8. NorthOne - Coworking Statistics
  9. Spacebring - Coworking Space Trends
  10. CBRE - Global Workplace and Occupancy Insights
Back to blog

Read More

How to make a solid business plan for a coworking space project
Make your business case compelling with our expert-designed document for banks and investors.