The most workable ideas are ones that have been validated by the market. And the best money (and time) you can spend on your coworking space is on market research. Before spending a dollar on tech, equipment or space, spend some time figuring out the local coworking landscape — and whether conditions are right for another coworking space.
Research Local Market Conditions
Head down to the local chamber of commerce and learn as much as you can about the demographics in your area. If you're in a blue-collar community or a town where everyone works for the same employer, then the demand might not be there. Or if housing is ultra-cheap, then it's possible that freelancers and small startups are able to work out of roomy home offices.
- What do people do in your area?
- How many people telecommute or freelance?
- How many small businesses are in the area?
- Can your area sustain (another) coworking space?
- What kind of spaces are around, and how much are they?
- How safe, convenient and accessible are these spaces?
- Is there adequate infrastructure and connectivity available?
- Are there local amenities and resources to help draw tenants?
Don't be afraid to interview people, conduct surveys or collect expressions of interest. Find out what locals need and what they think are the barriers to entry of a new coworking space. Use these insights to adjust your approach.
Know Your Competition (And Your Area)
In 2017 an incredible 1.7 million people worked out of a coworking space, up from 21,000 in 2010. Coworking spaces are on the rise, but that means that competition is as well. Before moving ahead with your space, define and enumerate the competition.
- Who are they, and what are their spaces like?
- Do they cater to a particular niche?
- How long have they been around?
- How much of the market do they have?
- What can you do differently?
- Is collaboration an option?
Increasingly the shift is away from general spaces and towards niche spaces. Why is this? Niche spaces benefit from networking opportunities, lead generation, and expertise sharing. Say all your tenants are in tech or GOVCON. They'll all have similar needs, relationships and growth patterns. Tapping into connections, resources, and know-how is much easier when all you have to do is ask a neighbor.
If the spaces in your area are more generalist, consider offering a tech, design or maker space. If they already exist, figure out what doesn't and fill that gap. Filling a niche isn't just good for your tenants — it's good for you. When your tenants have similar requirements and follow similar trajectories, it's much easier to anticipate and meet their needs.
The next step is to find that ideal coworking location. Stay tuned — we'll cover that next week!
This post forms part of an ongoing series on opening a profitable coworking space. If you're looking to start a coworking space and can't wait for the next installment, get in touch!