This article was written by our expert who is surveying the industry and constantly updating the business plan for a coworking space.
Opening a coworking space requires careful planning, strategic location selection, and understanding your target market's specific needs.
The coworking industry has experienced explosive growth, with global market size reaching billions and continuing to expand as remote work becomes mainstream. Success depends on creating a community-driven environment that balances profitability with member satisfaction, requiring precise calculations of space utilization, operational costs, and revenue streams.
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.
A successful coworking space requires 500-1,500 m² for optimal operations, targeting freelancers, startups, and remote workers with flexible membership models.
Initial investment ranges from $150,000-$500,000, with monthly operating costs of $13,500-$89,000, requiring 80-100 members to achieve profitability and sustainable growth.
| Key Metric | Recommended Range | Critical Success Factors |
|---|---|---|
| Optimal Space Size | 500-1,500 m² (50-150 members) | Balance of community areas (30-40%) and revenue-generating workstations |
| Startup Investment | $150,000-$500,000 | Real estate, renovation, furniture, technology, legal, and marketing costs |
| Monthly Operating Costs | $13,500-$89,000 | Rent (30-50%), staff salaries, utilities, maintenance, and marketing |
| Break-even Members | 80-100 members | Average revenue per member of $250-300/month |
| Revenue per m² | $50-80/m²/month | Optimized space utilization and diverse revenue streams |
| Target Occupancy Rate | 85%+ year-round | Strong community engagement and retention strategies |
| Profit Margin | 20-25% | Efficient operations, competitive pricing, and cost control |
What is the target market for a coworking space and what specific needs does it address?
Your coworking space should target four primary segments: freelancers and remote workers seeking professional environments, startups requiring flexible office solutions, corporate satellite teams, and creative entrepreneurs looking for community connections.
Freelancers and remote workers represent the largest segment, needing reliable internet, meeting rooms, and networking opportunities without long-term lease commitments. These professionals often work from home but require occasional access to professional spaces for client meetings or focused work sessions.
Startups and small teams value scalability and cost-effectiveness, as they can expand or contract their space needs based on business growth. They benefit from shorter-term commitments compared to traditional office leases, which typically require 3-5 year agreements.
Corporate teams increasingly use coworking spaces for project-based work, satellite offices, or hybrid work arrangements. This segment often has higher budgets and may book private offices or dedicated areas for extended periods.
You'll find detailed market insights in our coworking space business plan, updated every quarter.
How many square meters are needed and what is the optimal layout for a coworking space?
A medium-sized coworking space of 500-1,500 m² accommodating 50-150 members provides the optimal balance between capacity, comfort, and profitability.
For layout optimization, allocate 30-40% of total space to community areas including lounges, kitchens, and event spaces. These areas drive member satisfaction and retention but generate indirect revenue through higher membership renewals and referrals.
Private offices should range from 10-30 m² accommodating 2-6 people each, while meeting rooms need 10-25 m² for 4-12 participants. Open desk areas require approximately 10 m² per person including circulation space.
Phone booths and quiet zones should occupy 1.5-5 m² each, with meeting rooms comprising no more than 25% of total area to maximize profitable workstations. This configuration ensures optimal revenue per square meter while maintaining member comfort.
| Space Type | Size Requirement | Purpose and Revenue Impact |
|---|---|---|
| Private Offices | 10-30 m² each | Highest revenue per m², accommodate 2-6 people, premium pricing |
| Open Desk Areas | 10 m² per person | Core revenue generator, flexible membership options, high turnover |
| Meeting Rooms | 10-25 m² each | Hourly rental income, member retention tool, maximum 25% of space |
| Community Areas | 30-40% of total | Member satisfaction, networking, indirect revenue through retention |
| Phone Booths | 1.5-5 m² each | Privacy solution, member convenience, minimal space requirement |
| Reception/Entrance | 5-10% of total | First impression, security, administrative functions |
| Storage/Utilities | 5-8% of total | Operational necessity, cleaning supplies, member storage lockers |
What is the full breakdown of startup costs for opening a coworking space?
Initial investment for a coworking space ranges from $150,000 to $500,000, depending on size, location, and desired quality level.
Real estate costs including lease deposits and initial rent payments typically consume $10,000-$200,000 of your budget. Renovation and fit-out expenses for partitions, HVAC systems, and branding elements require $10,000-$100,000.
Furniture purchases including desks, chairs, storage solutions, and lounge areas cost $10,000-$50,000. Technology infrastructure for Wi-Fi, security systems, and audiovisual equipment needs $5,000-$30,000.
Legal fees, licensing, and insurance setup require $2,000-$10,000, while initial branding, website development, and marketing campaigns cost $5,000-$20,000. Budget an additional $5,000-$20,000 for miscellaneous expenses including supplies, contingencies, and working capital.
This is one of the strategies explained in our coworking space business plan.
What are the monthly operating costs and required profit margins for sustainability?
Monthly operating expenses for a coworking space range from $13,500 to $89,000, with rent and utilities representing 30-50% of total costs.
Staff salaries including community managers, cleaning personnel, and administrative support typically cost $5,000-$15,000 monthly. Maintenance, cleaning, and facility management require $1,000-$5,000 per month.
Internet, IT support, and technology subscriptions cost $500-$5,000 monthly, while office supplies, coffee, and member amenities need $1,000-$5,000. Marketing and member acquisition efforts require ongoing investment of $1,000-$5,000 monthly.
Insurance, legal compliance, and miscellaneous operational expenses add $1,000-$4,000 to monthly costs. Target a net profit margin of 20-25% to ensure long-term sustainability and business growth.
What pricing strategy should be adopted for memberships and services?
Implement dynamic pricing with open desk memberships at $99-$300 monthly, dedicated desks at $200-$400, and private offices at $500-$1,200+ depending on location and amenities.
Day passes should range from $15-$40 to attract occasional users and potential long-term members. Event space rentals can generate $50-$200 per hour or $300-$1,000 for full-day bookings.
Offer tiered membership packages with basic, premium, and executive levels including different amenities and access hours. Bundle services like mail handling, printing credits, and locker rentals for upselling opportunities.
Implement off-peak discounts for evening and weekend usage, long-term commitment discounts for 6-12 month memberships, and group rates for teams of 3+ members. Monitor local competitor pricing and adjust rates quarterly based on demand and occupancy levels.
How many members are needed to break even and generate profit?
Calculate break-even members using the formula: Total monthly costs divided by average revenue per member.
For a coworking space with $20,000 monthly operating costs and $250 average revenue per member, you need 80 members to break even. To generate $5,000 monthly profit, increase the target to 100 members.
Average revenue per member varies by membership mix, with hot desk members contributing $150-$250 monthly, dedicated desk members $250-$350, and private office members $400-$800+ monthly.
Factor in membership churn rates of 10-15% monthly when planning member acquisition strategies. Maintain a pipeline of prospective members equal to 20-30% of current capacity to offset natural turnover and support growth objectives.
What is the average revenue per square meter for a profitable coworking space?
Well-performing coworking spaces generate $50-$80 per square meter monthly, with top-tier locations exceeding $80/m²/month.
Target a minimum of $50/m²/month to ensure profitability, focusing on maximizing productive workspace while maintaining necessary community areas. Private offices and dedicated desks generate higher revenue per square meter than hot desks or common areas.
Optimize revenue density by offering premium services, implementing surge pricing during peak hours, and maximizing space utilization through flexible furniture arrangements. Event hosting and after-hours rentals can boost revenue per square meter significantly.
Monitor this metric monthly and adjust space allocation if certain areas consistently underperform. Consider converting underutilized meeting rooms to private offices or restructuring layouts to increase revenue-generating capacity.
How can space utilization be optimized during evenings and weekends?
Maximize off-hours revenue through event hosting, workshop rentals, and strategic partnerships that utilize your space when members aren't present.
Host networking events, industry meetups, educational workshops, and corporate training sessions during evenings and weekends. Charge $300-$1,000 for full-space evening events or $50-$200 per hour for partial space rentals.
Partner with local organizations, schools, and professional associations to offer regular programming. Collaborate with fitness instructors, meditation teachers, or skill-training providers who can pay for space usage.
Offer special weekend memberships for members who work non-traditional hours or need occasional weekend access. Create "after-hours" packages that include extended access for members willing to pay premium rates.
We cover this exact topic in the coworking space business plan.
What are the key legal, insurance, and regulatory requirements?
Establish proper business structure (LLC or corporation), obtain necessary permits for commercial operation, and secure comprehensive insurance coverage including general liability, property, and cyber liability policies.
Register your business and obtain required licenses including business operation permits, signage permits, and event hosting licenses if applicable. Ensure compliance with local zoning regulations for commercial coworking operations.
Draft comprehensive membership agreements including liability waivers, terms of service, and privacy policies compliant with data protection regulations (GDPR/CCPA). Implement proper employment law compliance for staff hiring and management.
Secure insurance coverage including general liability ($1-2 million), property insurance for equipment and furniture, workers' compensation for employees, and cyber liability for data protection. Maintain compliance with fire safety, health codes, and accessibility requirements (ADA compliance).
What marketing channels are most effective for building occupancy quickly?
Focus on local SEO optimization, strategic partnerships with local businesses, and community-building events to establish your coworking space's presence and attract initial members.
Optimize Google My Business listing and local search rankings to capture nearby professionals searching for workspace solutions. Develop content marketing through blogs, guides, and social media showcasing your space and community.
Build partnerships with local cafes, gyms, restaurants, and business service providers for cross-referrals and reciprocal marketing. Host open houses, networking events, and free workshops to introduce potential members to your space.
Implement referral programs offering existing members incentives for bringing new members. Utilize social media platforms (LinkedIn, Instagram, Facebook) to showcase member success stories and community activities.
How can community engagement maintain 85%+ occupancy year-round?
Create a vibrant community through regular programming, member recognition, and facilitating connections between members to build loyalty and reduce churn.
Host monthly networking events, skill-sharing workshops, and social gatherings that encourage member interaction and relationship building. Implement member spotlight programs and success story sharing to create recognition and belonging.
Establish online member forums and communication channels through apps or platforms where members can connect, collaborate, and support each other. Assign dedicated community managers to facilitate introductions and organize activities.
Gather regular feedback through surveys and suggestion boxes, implementing member-requested improvements to demonstrate responsiveness. Create mentorship programs, collaborative projects, and peer-to-peer learning opportunities that add value beyond workspace access.
It's a key part of what we outline in the coworking space business plan.
What tools and software are essential for efficient coworking space management?
Implement comprehensive coworking management software that handles bookings, payments, member management, and community engagement through integrated platforms.
| Software Category | Recommended Platforms | Key Functions and Benefits |
|---|---|---|
| Space Management | OfficeRnD, Spacebring, Yardi Kube | Desk allocation, resource booking, space utilization analytics |
| Payment Processing | Spacebring, Cobot, Nexudus | Automated billing, subscription management, financial reporting |
| Community Platform | OfficeRnD Community, Spacebring Mobile | Member directory, event management, communication channels |
| Access Control | Integrated smart locks, key cards | 24/7 access management, security monitoring, usage tracking |
| Analytics & Reporting | Spacebring Analytics, Yardi Kube | Occupancy rates, revenue tracking, member behavior analysis |
| CRM & Marketing | HubSpot, Mailchimp integration | Lead management, automated email campaigns, retention tracking |
| Event Management | Coworkify, Eventbrite integration | Workshop scheduling, ticket sales, attendee management |
Conclusion
Opening a profitable coworking space requires careful planning, adequate capitalization, and strong community-building skills to succeed in this competitive market.
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.
Success in the coworking industry depends on understanding your local market, optimizing space utilization, and building a strong community that members want to be part of.
Focus on financial sustainability through careful cost management, strategic pricing, and diverse revenue streams to ensure long-term profitability and growth.
Sources
- Stratview Research - Coworking Spaces Market
- 360iResearch - Coworking Spaces Intelligence
- MarkWide Research - Coworking Spaces Market
- Archie - How Big Should a Coworking Space Be
- Optix - Cost of Starting a Coworking Space
- FinModelsLab - Coworking Space Operating Costs
- FlexSpace - Pricing Strategies for Coworking Spaces
- Cobot - Legal Requirements for Opening Coworking Space
- Deskmag - Marketing Strategies for Coworking Business
- Look Digital Signage - Best Coworking Software