Do you want to start a shared workspace company? If YES, here is a complete guide to starting a shared workspace business with NO money and no experience.
Okay, so we have provided you an in-depth sample shared workspace business plan template. We also took it further by analyzing and drafting a sample shared workspace marketing plan backed up by actionable guerrilla marketing ideas for shared workspace agencies. In this article, we will be considering all the requirements for starting a shared workspace business. So put on your entrepreneurial hat and let’s proceed.
Why Start a Shared Workspace Company?
A shared workspace is usually a single space with different offices where entrepreneurs and business professionals from different industries and areas of expertise meet in order to not only work but also share ideas and network with others.
Most of the people that usually use these shared workspaces are business people who travel too frequently, independent contractors or any individual who is seeking for a place that is creative in which to work at without having to pay too much in lease.
While this might look like an easy enough business to you, it might not be easy to find a space large enough for you to carve out independent offices from or even if you are lucky to find one, you might not find a landlord willing to allow you sublet part of your space for money.
Therefore, you will need to conduct your research thoroughly about the business and be certain about the market for this business as it is not wise to assume that you would have a ready market waiting. Once you have conducted the necessary research that will make you know more about the business, then you need to focus on creating a comprehensive business plan for your business.
Starting a Shared Workspace Company – A Complete Guide
- Industry Overview
The shared workspace industry is one that is worth $2 billion annually and the periods of 2011 and 2016, saw a 12.7 percent growth annually. There are about 868 shared workspace companies in the United States of America employing more than 3,300 people, which therefore means that the industry is a very lucrative one.
There are still opportunities available in this industry especially as more people are telecommunicating and will have to rely on independent office spaces and conference rooms in order to coordinate their businesses successfully. Also, as the business environment is changing, more companies are on the look-out for workspaces that are flexible in nature.
This industry however had its own share of woes during the recession especially as more businesses closed and corporate profit went on a decline, which led to less people being able to afford spaces in such companies. However as soon as the economy recovered, demand for services in the industry went back up especially as more businesses preferred to lease spaces from shared workspace companies as opposed to traditional leased spaces in a bid to control costs. It is being predicted that revenue will continue to grow from the periods of 2016 to 2021, especially as the number of those telecommunicating will increase.
According to IBISWorld, the shared workspace industry is in its growth stage life cycle. The industry added value in comparison to the GDP of the United States will grow averagely at 7.5 percent for a decade (2011 to 2021), in comparison to the annual rate of 2.2 percent that the GDP is expected to grow during the same time period.
This therefore shows that the industry is growing at a rate that is faster than the economy especially as more businesses now prefer to rent or lease workspaces that have been fully furnished as opposed to buying or leasing a commercial property that they would have to furnish themselves.
The shared workspace industry has had its myriad of challenges after the recession especially in 2015, where an increase in real estate prices as well as challenges in creating awareness led to the industry having to struggle. However, this has changed as more than 61 percent of operators running a shared workspace company have started expanding their spaces which is a slight increase from the 59 percent that was reported to have done so in 2014. Also, at least one in three operators has been looking to get an additional location or even more to a bigger location in order to be able to accommodate more desks.
The industry has seen a great number of profitability which has allowed more operators the need to expand; this is in comparison to 2014 where only 66 percent could afford to expand in comparison to 2016 where 78 percent can afford to.
Even among those that have not declared their businesses to be profitable, some are still looking forward to expanding. For shared workspaces that have more members, the likelihood to expand is greater than those that have fewer members. The probability for expansion is more for those that have been operating the business for between 13 – 36 months.
There have been positive and high expectations of revenue generation. 87 percent of operators expect to grow their members while more than 82 percent expect an increase in revenue. This is a bit of decrease from the expectations of operators back in 2014 and this is probably because more of the operators have been in business for a longer period as opposed to 2014, when they hadn’t. This means that those that still have high expectations are mostly new operators. As the market continues to mature, the share of new spaces will shrink and this is because most of the older shared workspaces will still be in existence to compete with the new ones.
Even though the industry is a very lucrative one, some shared workspaces, even popular ones have had to close down after their leases expired due to the increase in renewal rates. According to statistics, one in every eight shared work spaces will close or move because they have to renegotiate or renew their leases. Cities with extreme rents such as San Francisco and New York have more shared workspaces and will mean that operators will rather negotiate or pay the new rent rather than move.
Starting a Shared Workspace Company – Market Research and Feasibility Studies
- Demographics and Psychographics
The demographic and psychographic composition of those who require the services of a shared workspace are not only limited to entrepreneurs and start-up companies but to also independent contractors, remote workers, international business men and women as well as writers and other creative people.
Therefore, if you are looking to define your demographics in order to be able to correctly determine your target market, you should strive to make it all encompassing.
List of Niche ideas Within the Shared Workspace Business That You Can Specialize in
Shared workspaces are gaining prominence every year especially as more people are choosing to be independent and become remote workers or independent contractors. Even though this is a very lucrative industry, operators looking to start a business in this industry must be prepared to look at niches that they will able to capitalize on in order to make them stand out and also attract enough clients from its target market.
There are several niches available in this industry but only few will generate high revenue especially if you are located far from your intended target market. Below therefore are some of the niche ideas that some shared workspace companies can decide to major in;
- Shared workspaces for entrepreneurs and start-ups
- Serviced office services for professionals
- Shared workspaces for women-owned businesses
- Shared workspaces for techpreneurs
- Shared workspaces for social and environmental entrepreneurs
- Shared workspaces for innovators
The Level of Competition in the Shared Workspace Business Industry
The level of competition in the shared workspace business industry is dependent on the location of the business as members have to be able to get to the location of the shared workspace in order to work.
Therefore while distance might be a barrier for several members, what members are usually on the lookout for are places where they are secured, have the convenience they need, with high speed internet, and also network with like-minded individuals.
Therefore, if you are looking to start a shared workspace business in the United States of America, you should be prepared to face competition especially if you are located in an area where you are likely to have more than one shared workspace company.
List of Well – Known Brands in the Shared Workspace Industry
In every industry, there are brands that stand out and the shared workspace industry is no different. There are several reasons why brands become popular and these include; the quality of their service, their customer relationship, how long they have been in the industry and their proactive nature.
Below are some of the well-known shared workspaces in existence in the United States of America;
- Regus PLC
- New Work City
- Proximity Space
- Huntsville West
- The Boardroom Anchorage
- The Urban Hive Sacremento
- The Port Workspaces
- Green Spaces Denver
- The Grove New Haven
- The WaVe
- Strongbox West
- The Box Jelly
- MatchBOX Coworking
A global study on shared workspaces expects the industry to grow by 22 percent in 2017 and even have more than 13,500 locations worldwide. It is believed that in the United States alone, where there are already close to half a million users of shared workspaces, the growth potential will be huge especially as more than 17 million Americas are already independent and yet working full time. As at 2005, there was only one shared workspace in existence in the United States of America, but by 2013, more than 3,000 shared workspaces had been established globally.
Shared workspace gathered momentum especially after the great recession as talented but unemployed workers who got contract or freelance work, needed a place that was inexpensive and yet commercial to use. This also allowed for people to be able to socialize and network whilst spending the day with peers that are of like minds.
The industry has also started experiencing a growth in demand from large corporations who do not desire to rent commercial locations in every area that they are expanding to especially as most of these large corporations require short-term contract workers as well as employees to carry out certain tasks and will therefore be looking to cut costs that is associated with fully renting and leading a commercial traditional facility.
According to the U.S Bureau of Labor Statistics, in the third quarter of 2015, more than 14 million people were self-employed. This number clearly outpaced those that were hired in the labor force. Studies also projected that the number of Americans that will choose to be self-employed in 2019, will amount to 40 million, this is as Millenial workers between the ages of 18 and 34 become the leading force behind the freelance economy in the United States.
Starting Your Shared Workspace Company from Scratch vs Buying a Franchise
Starting your business from scratch or buying a franchise is one decision that every entrepreneur starting a business has to deal with depending on the industry that the entrepreneur is in. While there are many pros and cons for each option and any entrepreneur that is thinking of this ought to do their research before making the decision, it is important to note that the shared workspace industry does not have the franchise option just yet, which means that any entrepreneur looking to start this business has to start from the scratch.
When starting your business from the scratch, it is important that you do a thorough research on the business so as to know what you are getting into. An entrepreneur starting from the scratch will need to be able to handle different aspects of the business and also be informed about trends in the industry in order to be able to be proactive. Starting from the scratch is not easy but it is one way that an entrepreneur can learn about the business fully.
Possible Threats and Challenges You Will Face When Starting a Shared Workspace Company
In every business, there are threats and challenges that every entrepreneur has to face and knowing these you would need to come up with strategies that will allow you combat some of these threats that you are likely to face when starting your shared workspace company. You should however be aware that some of these threats and challenges cannot be proactively dealt with and so when this happens, remaining optimistic is your best chance.
Some of the challenges and threats that you are therefore likely to face are; having to create awareness for your business so as to be able attract customers, dealing with intense competition from strong players in the industry, having to compete against new entrants, and economic downturn that will see more people preferring to work from home.
Starting a Shared Workspace Company – Legal Matters
- Best legal entity to use for this type of business
When starting any business, the idea of what legal entity would be appropriate is one key decision you will need to make because the legal entity you choose will have an impact on your business in the short and long term. There are four basic legal entities that you can consider when looking to start or run your shared workspace business in the United States and they are; sole proprietorship, partnership, corporation and Limited Liability Company (LLC).
Each of these legal entities has its pros and cons and the best way to determine which of them will best suit your business is to use factors such as flexibility, liability, taxation and ease of Formation, ownership and control.
In a corporation, the business is regarded as a separate entity by law and the owners cannot be held liable for any actions or decisions taken by the business. This kind of legal entity is very formal and usually requires an attorney to help set up. Some of the requirements of a corporation are that board meetings are held and minutes of any meetings be recorded. The corporation can further be divided into the S Corporation and C Corporation.
In an LLC, there are similarities to certain attributes in a corporation as well as in a partnership, which is that the business is regarded as a separate entity from the owners and that owners pay taxes on their personal tax returns.
Catchy Business Name ideas Suitable for a Shared Workspace Company
When intending to start a business, it is important to note that the name you choose for your business matters as the name you choose must not only be catchy and unique, it must also be memorable, pronounceable and suitable for the industry in which you intend to locate the business in. This means you might have to carry out researches that will enable you know what names are in use, so that you do not have a setback when it comes to registering your business.
Below are some catchy business names that will be suitable for your shared workspace business;
- ThinShare Hub
- Common Spaces
- Lens Startup Hub
- Locale Force Space
- The Trend
As long as you intend operating your business in the United States of America, it is mandatory that you get insurance policies to cover any incident that might occur in your workplace either to your employees, members or properties. Before creating a budget that will allow you purchase any insurance policies, it is best that you consult with an insurance agent or broker, who will point out what insurance policies will be best for your shared workspace company and in accordance to your budget.
Below therefore are some basic insurance policies that you would need to purchase when looking to start your shared workspace business in the United States of America;
- General Liability Insurance
- Property Insurance
- Workers’ Compensation Insurance
- Health Insurance
- Business Owners’ Policy (BOP)
- Equipment Insurance
- Payment Protection Insurance
- Umbrella Insurance
Intellectual Property Protection/Trademark
Applying for intellectual property protection is usually for businesses where the services or products they offer are so unique that it has to be protected so that others looking to use them have to get permission or pay to be able to use it. Due to the fact however that the business is regarded as a service oriented business, it is not necessary to apply for an intellectual property protection to your business.
Regardless of the business one is in, you can still get to apply for intellectual property protection if you so desire for your company name, logo, domain name and any other material deemed necessary.
Is Professional Certification Needed to Run a Shared Workspace Company?
The business of starting and owning a shared workspace isn’t one that requires you to own any professional certificate of any sort. Once you have the capital and have made a proper research regarding the business, you can start up the business. All what members are expecting is that you provide seamless and quality service.
Some entrepreneurs however usually seek for professional certifications especially in areas they deem would help in growing their business such as management, accounting, marketing and customer service. However, this depends entirely on the entrepreneur and is not mandatory for anyone.
List of Legal Documents You Need to Run a Shared Workspace Company
When starting out a business, there are several things that are required in order for your business to be able to start up and run smoothly and one of them is having legal documents in place. No legitimate business can run in the United States without proper documentation and any business that attempts that has the owner severely punished so as to deter others from doing so.
If you aren’t sure of what legal documents you would need to start your shared workspace business, you should engage the services of a lawyer or an accountant to help you with what you might need. Below is a list of legal documents that you would require to start and run your shared workspace company in the United States of America;
- Certificate of Incorporation
- Operating Agreement
- Business Plan
- Business License and Permit
- Employment Agreement
- Employer Identification Number (EIN)
- Federal Tax Identification Number
- Contract Documents
- Sub-lease Documents
- Insurance Policies
Financing Your Shared Workspace Company
Every business requires capital with which to start up and get it running to an extent before the business generates money that not only covers the initial capital used but that will also sustain and grow the business. Sourcing for capital is usually very tasking as not all entrepreneurs have the necessary capital to start the business and so they have to source for loan.
No matter how fantastic a business idea is, not having the necessary capital means the idea will remain just an idea; which is why it is necessary that a business plan be written as this would help convince whoever you intend to approach for a loan of how serious and committed you are to the business.
Therefore some of the options that you can use when sourcing for start-up capital for your shared workspace company include;
- Using personal savings and revenue generated from sale of stock or property
- Sourcing for soft loans from friends and family members
- Applying for loan from a commercial bank
- Sourcing for loan from private investors and business partners
Choosing a Suitable Location for your Shared Workspace Company
This is perhaps one of the most important decisions you will have to make once you have decided that this is the business you intend to start up as the location you are in can make or mar your business. Before deciding on what location will best suit your business, it is important that you know who your target market is. If your aim is to take in techies that are just starting out, then it would make sense to research where techies are and then start a shared workspace business right in their hub.
While it might be tempting to start with a very huge facility, it is best to start small and then expand as demand increases, except of course you have conducted a research on the area where you intend to locate your business and have seen that if you get a large facility, you will be able to generate revenue and make profit within a short period of time.
The location that you intend to pick for your shared workspace business should be one that is in an area that is easily accessible by members and those you are looking to employ to help run the business. The facility must be conspicuous with a signage that can be visible from afar.
If you take your facility into an area that is not conspicuous, you will need to spend more money in promoting your location to your intended target market and even at that, only a few people might be willing to commute to a place that is far off.
Starting a Shared Workspace Company – Technical and Manpower Details
The shared workspace business is one that has seen tremendous growth not only in the United States but also around the world. This therefore means that not only is the industry lucrative but it is also becoming increasingly competitive especially as the barrier to entry into this industry is low, therefore any entrepreneur with the ability to get the capital needed for the business can go into the business.
While finance is very important in starting and running a shared workspace business efficiently till it starts to generate its own revenue and profit, location is another important element required to make the business become a success. Therefore, it is important that you make a thorough survey depending on the niche you intend to start this business in and then look for a location that will be a perfect fit for your target market.
Most of where the finances go when this kind of business is started is usually the furniture and other aesthetics that you would require in order to make the place convenient and comfortable for all the members that would choose to work there. You can partner with a furniture company to provide the furniture you would need. Therefore the equipment that you would require in order to run your shared workspace efficiently are; computers, phones, printers, software and high speed internet.
Because there is no way you can handle the business alone, you will need to build a business structure which should consists of individuals that are proficient in their different areas of specialization and who align with the corporate goals and objectives of your organization. Some of those you will therefore need to employ are; Chief Executive Officer (CEO), admin manager, accountant, customer care representative, business development and marketing executive, cleaner and security guards.
From the above break down, you will need at least 7 people in order to run your shared workspace efficiently.
The Service Delivery Process of a Shared Workspace Company
The shared workspace company is one where you offer those who need a space to work without having to pay long term lease, a space that is convenient, secured and has all the necessary facilities in place. This is therefore a service oriented business that has no much process in terms of delivery.
Once you have decided to start this business and have fulfilled all the necessary requirements, it is necessary that you seek out a good location that is conspicuous and that will allow you run the business effectively. In order to do this, you will likely need to engage the services of a real estate agent.
Once you have gotten a good location for your business, you will need to ensure that it renovated to the standard you want and then market your business to your intended target market.
Starting a Shared Workspace Company – The Marketing Plan
- Marketing ideas and strategies
In every business that is being started, revenue and profit making are usually the sole aim and so the major way by which this can be achieved is by marketing. Marketing is a way in which you anticipate the needs of your intended customers and then offer them what they want based on these needs. Once you are able to market your business well, you not only get to penetrate the market and get a fair share, your business will also stand out and be able to compete against similar businesses.
In determining the needs of your target market, you would need to conduct a market survey that will allow you first know who your target market is and try to understand them by knowing what they are expecting from you, which will lead you into knowing what to expect from them as well. The market survey you conduct will also allow you to know how your competitors are getting their own clients and how you can add to their strategies to get more clients for your business.
After you have created your marketing strategies, it allows you to create the right budget that will take care of all your marketing activities and campaigns. Creating the right budget is essential because you would not then need to waste resources and thereby cause a strain to your overall budget.
Below are some very effective marketing strategies and ideas that you would need to consider if you intend promoting and advertising your shared workspace company;
- Place adverts about your shared workspace company in local newspapers and specific magazines as well as on radio and television stations
- Empower your marketing executives to advertise your company to the right target market
- Install billboards in strategic locations all over the city where your shared workspace is in
- Distribute handbills and paste fliers in various strategic places
- Ensure that you use only strategic social media platforms such as Facebook, Twitter, Linkedin and Google Plus to market your company
- Create different packages for various clients depending on their budgets and how long they intend to use your shared workspace
Strategies to Boost Your Shared Workspace Brand Awareness and Create Your Corporate Identity
As an entrepreneur, it is essential that you are deliberate about boosting the awareness of your brand and also creating a corporate identity for your business by doing whatever is necessary. Publicity is very vital to the growth of a business, which is why larger companies do not mind spending to promote and publicize their brands as well as creating a corporate identity for their brands no matter the cost.
Because your intention is to generate revenue by ensuring that as many people as possible are aware about your shared workspace company, it is therefore in your best interest to promote your company as much as you can using different means possible.
It is important to note that publicity offers entrepreneurs advantages because not only do you get to create the awareness that your company needs, you also get to generate revenue via this creation of awareness, as long as you use the right medium to do so.
Just like marketing, it is important to note what areas will be most effective for you when boosting the awareness for your brand because if you do not conduct proper research on this, you are likely to waste time and resources to promote your brand in places that your target market will likely not see.
There are several ways by which you can boost the awareness for your brand and also create a corporate identity for your shared workspace company and below are some;
- Create a website and ensure that you employ an SEO consultant to enable your website not only top the search engines but also be seen by your target market
- Use your social media platforms such as Facebook, Google Plus, Linkedin and Twitter to promote your shared workspace company
- Encourage your loyal clients to help spread the word about your company
- Send news releases about your company to your local newspapers and radio stations
- Distribute handbills and business cards and also paste fliers in strategic positions all around the city where you are operating from
- Install flexi banners in strategic and conspicuous locations all around the city where you intend operating your business from.