The co-working space business falls under the serviced office leasing (SOL) industry and operators in this industry rent or lease fully furnished office space to businesses on a part-time or as-needed basis. The serviced office leasing (SOL) industry also provides virtual office and conference room leasing options to their clients.
For $49.99 a month, anyone can work at Wall Street. The rising trend of the virtual office, which effectively functions as a high-cost PO box, is one of the services offered by the $2.4-billion Serviced Office Leasing (SOL) industry.
The serviced office leasing (SOL) industry is still open to any aspiring entrepreneur who has the required start-up capital.
It was projected that over the next five years, new technology will continue to emerge that will make it easier for more players to come into the industry hence increasing the competition in the industry.
Estimated Cost of Opening a Coworking Space Facility
When it comes to opening a coworking facility, the major areas you look towards spending the bulk of your cash is in renting or leasing a standard facility and converting it into a coworking space. These are the key areas you will spend your start-up capital;
- The total fee for registering the business in the United States of America – $750.
- Legal expenses for obtaining licenses and permits as well as the accounting services (software, P.O.S machines, and other software) – $3,300.
- Promotional expenses for the grand opening of the coworking facility for $3,500, as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580.
- The total cost for hiring a business consultant including writing a business plan – $2,500.
- The total cost of purchasing insurance coverage – $2,400.
- The cost for renting or leasing a facility that will be converted into the coworking facility – $300,000.
- Other start-up expenses include stationery ($500) and phone and utility deposits ($2,500).
- Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $70,000
- The cost for store equipment (cash register, security, ventilation, signage) – $4,750
- The cost of purchase and installation of CCTVs: $2,000
- The cost of equipping the coworking facility (Flat Screen TVs, computers, printers, projectors, markers, furniture, telephones, filing cabinets, and electronics) will cost – $40,000
- The cost of launching a website: $600
- Miscellaneous: $2,000
From the rough estimate as listed above, you would need a minimum of four hundred and thirty – four thousand eight hundred and eighty USD ($434,880) to establish a standard coworking business in any city in the United States of America.
Please note that this is a rough estimate and we usually advise our readers to directly contact wholesalers and suppliers of the types of furniture, and office equipment they want to have in their coworking facility to get the real-time prices of these items.
The truth is that, if you are a good bargainer, you can get a better deal that will help you beat down the estimated price as listed above.
Having said that, here are some of the general factors that will influence the cost of opening a coworking facility in the United States of America.
Factors That Will Influence the Cost of Opening a Coworking Facility
1. The Type of Coworking facility
A major factor that will determine the overall cost of opening a coworking space facility in the United States of America is the type of facility the owner wants to start.
Although most coworking facilities provide space for clients to work from, but few choose to lease or rent virtual offices. These different types of coworking facilities come with different cost implications when starting the business.
The Choice of Location
Another major factor that will determine the cost of opening a coworking space in the United States of America is the location of the facility.
In business, location is a key part of what determines the success of the business. For example, renting or leasing a coworking facility in a location that is off the city center or business hub will be less expensive when compared to renting or leasing a coworking facility in a well-populated business hub.
The Required Licenses and Permits
In the United States of America, you cannot open a business without first applying for the mandatory license and permits. You would need a building license, zonal permits, and signage permits amongst others.
These license ad permits cost money and will influence the overall cost of opening a coworking space facility in the United States of America. Please note that you may need to go through several inspections before you can be issued your licenses and permits.
To get the overall cost of licensing and permits associated with opening a new coworking space in the United States, we will advise that you reach out to your city government. You also need to consider state and federal requirements.
The Type of Facility
The type of facility you want to run your coworking space from is also a major factor that will determine the overall cost of opening the business in the United States of America. As regards the facility, you have the option of renting, leasing or constructing your own.
With renting and leasing a facility, you may spend extra to make the facility fit into what you have in mind, but there is a limit to how far you can go and it will be dependent on what the landlord of the facility wants.
If you want to construct your coworking facility from the scratch, you will buy the land or property, bring up your design, construct and equip the coworking facility.
With that, you will agree that you are going to spend way more when compared to people that rent or lease a facility. This indeed will greatly influence the overall cost of opening your coworking space facility.
The Number of Workers (Clients) You Want to Admit
Another very important factor that determines the cost of opening a coworking facility in the United States of America is the number of workers (clients) they intend to accommodate per time.
Note that some coworking facilities can accommodate over 20 clients per time, while others can accommodate up to 100 workers (clients) per time.
Aside from the cost of renting or leasing the facility, it will also cost you more to furnish and equip the coworking facility, and the more clients the coworking space accommodates, the more you are expected to spend to set up and run the facility.
The Cost of Hiring and Paying a Business Consultant and Attorney
If you want to get your business started on the right foundation, you need to hire the services of a competent business consultant and attorney.
A business consultant will help with drafting a workable business plan document, a marketing plan, a comprehensive SWOT analysis, and provide other advisory services that will help with opening the business.
An attorney will help you register the business, draft contract documents, and offer you legal expertise. Of course, these services will cost you money and it will indeed influence the overall cost of opening a coworking facility in the United States of America.
The Cost of Branding, Promotion, and Marketing the Coworking Space
The cost for branding, promoting, and marketing the coworking facility is yet another key factor that will determine the overall cost of opening the business.
Trust me, if you need to win a fair share of the available market in your city, then you must be willing to pay for effective branding, promotion, and marketing of your new coworking space.
It is not cheap to come by an expert in branding, promotion, and marketing that will help you compete with brands in the coworking space industry in your city. So, if you add the cost of paying a branding and marketing expert, it will increase the cost of opening your facility.
The Cost for Furnishing and Equipping the Facility
Another very important factor that will determine the cost of opening a coworking facility is the cost of furnishing and equipping the facility.
You should budget for projectors, flat-screen TVs, sound system, Satellite dish and decoder, office furniture (table, stools, and sofas), cabinets, telephones, office equipment (security and fire alarm and protection gadgets, CCTV, ventilation, signage), amongst others.
All these will cost money and it will influence the overall cost of opening a coworking space facility in the United States of America.
The Cost for Insurance
The cost of paying for insurance policy cover is yet another important factor that will determine the overall cost of opening a coworking space in the United States of America. Interestingly, in the United States, you can’t operate a business without having some of the basic insurance policy covers.
Thus, it is imperative to create a budget for insurance policy cover and perhaps consult an insurance broker to guide you in choosing the best and most appropriate insurance policies for your business.
The Cost for Registering the Business
The cost of registering the business is yet another cost that will influence the overall cost of opening a coworking space facility in the United States of America.
Although the cost of registering a business is affordable, it will no doubt add to the overall cost of opening a coworking space in the United States of America.
Source of Your Supplies and Ongoing Expenses
Another major factor that will determine the cost of opening a coworking facility is the source of your supplies. For example, if you have access to manufacturers of the type of office supplies, and toiletries you need, it will sure cut down the cost of running the co-working facility as against buying from retailers.
Please note that there are other factors not listed above that will also influence the overall cost of opening your coworking space, which is why we advise that you work with a result-driven business consultant in your city to give you the needed guidance as it relates to the unique factors in your location.