Business Model for Coworking Spaces: All you Need to know

Are you wondering what makes a good business model for coworking spaces?

People tend to think it’s all about the pricing model for coworking spaces or the business plan.

To make the most of lead generation, property owners and startups need to use a standard template for revenue models.

A revenue model is the primary way a business generates revenue. Revenue models generally include information about the products or services the business intends to provide, the target markets, and projected costs.

A business model is another name for a revenue model. Two major components are pricing and expenses.

What is a Coworking Space?

You may have many questions about coworking spaces, including what they are, how they work, and how to generate revenue.

Coworking spaces are shared workstations. Coworking spaces offer low-cost offices for people who don’t want to work alone in a home or cafe.

Contrary to popular perception, coworking spaces are a business model that is different from the traditional office environment. The business model and revenue generation are also different.

Business Model for Coworking Spaces


How Do Coworking Spaces Generate Revenue?



Two different perspectives can be taken on renting as a revenue-generating method for coworking spaces.

      • Investing in infrastructure for office and renting it. Like any workplace, a coworking space has a set number of workstations that are leased out to individuals or groups.

    Renting out workstations is the main source of revenue for many coworking spaces. Several coworking spaces rent out cabins and separate work areas in addition to private workstations.

    Many of them offer a flexible price option, where the consumer can choose from different customizable options.

        • Renting out a workspace that you have purchased.

      Many coworking spaces with open halls and meeting rooms offer these facilities to host events, such as lectures, meetings, and training sessions.

      These venues are a good alternative to other options that require a lot of resources. They also offer enough space to host these events.

      Virtual Renting

      Virtual offices are offered by many coworking spaces. A virtual office, while the staff is working from home, provides a professional address for mail, deliveries, and advertising.

      Virtual renting is a great option for business owners and creatives who wish to work at home, but need a professional office space.

      Marketing and Promotion

      Coworking spaces are often used by businesses as a marketing tool because they have a diverse range of workers, companies, and work structures.

      Even seminars and trainings held in coworking space act as a method of marketing and generating revenue.

      Partnerships and Investments

      Coworking is all about communication and connection. Coworking spaces allow you to connect with local investors and businesses.

      You can use this to improve your company’s services, membership plans and quality.

      A good collaboration and investment will bring value to you members, increase your income and generate new leads. Collaborations are often budget-friendly and allow you to boost revenue.

      You could partner with nearby fast food joints to provide their meals, snacks and refreshments.

      This will not only provide an opportunity for socialization and as an added amenity, but also expand your business by providing discounts and deals to customers who use the facility.

      Memberships and Subscriptions

      Each product initiative has features and functionality that can be obtained at a later date by paying a small fee.

      A premium membership or VIP subscription is an annual fee that gives you access to exclusive facilities.

      It is usually paid once per year. This revenue-generating method also ensures customer loyalty.

      What to Consider When Building a Coworking Space Revenue Model


      Revenue Leads

      What are your revenue sources? From memberships, perhaps? Renting out space is a good way to make money.

      Coworking is dominated by two main income streams: membership and space rental.

      If your company plan relies primarily on membership income, a larger portion of the budget may be spent on improving membership experiences, upgrading facilities, etc.

      You can also choose to prioritise the latter or both. The ability to target your leads is crucial for generating revenue.

      Target Audience

      Profitability can also be influenced by which community you expect to generate a large percentage of your revenue.

      Coworking spaces are used by many different groups, including freelancers and creatives, professionals who work from home, corporate teams, and entrepreneurs.

      Coworking is not limited to one demographic. It is dependent on the company’s goals and vision.

      Your revenue will be significantly affected by your ability to satisfy the unique needs of your target audience.

      Learn more about coworking spaces by clicking here.


      How much money do you invest in the coworking model to make it work? How much money are you left with after all these costs?

      You can assess your future property development and potential profit by answering all of these questions.

      Consideration should be given to the costs of installation, maintenance, employee salaries and other charges. What’s left?

      Before you decide on a coworking space model of revenue, be sure that it is going to do a lot for your business.

      Coworking Space Pricing Model

      In recent years, the style of pricing for coworking spaces has changed. Pricing has been influenced by the 2020 pandemic. Some companies offer discounts to loyal customers.

      It’s obvious that as businesses reduce staff and adopt flexible work practices, with fewer coworkers at a given time in the office, a pattern will develop of reduced office space.

      There are some things you should consider when it comes to pricing coworking spaces to improve your revenue model. It’s important to compare expenses and assess their scope, as different places may have different features.

      In most cases, the following items are included in the base fee:

          • Internet access

          • Printing, photocopying and other services such as laminating or scanning.

          • Simple reception services

          • In the kitchen, you can prepare food and drinks like coffee, tea or snacks.

        When considering the cost structure for your coworking space, there are several options and extras that you can choose from.

        There is no set way to create a coworking space price model. A private office in the south might be cheaper than a shared one in the north.

        We recommend, however, that you conduct extensive research and analyze your coworking model strategically.

        Coworking Space Business Plan

        A well-crafted coworking space business model is needed to create an effective revenue model. Here are a few tips to help you create one.

        1. Find What Works for You

        This section is not about how important it can be to find the right cultural fit in your area.

        We’re not talking about the importance of buying a location that is large enough to accommodate all your community members, while also allowing for you to prosper as an owner.

        It is impossible to cover all the costs associated with a mortgage, a rental, staff, management and staffing if your workspace is only 1,500-3,00 square feet.

        A large space with high occupancy rates should produce higher revenues.

        The recovery of your operating costs is possible by using small coworking spaces.

        2. Clear Objectives

        Your coworking space should have clear goals. If you don’t want random people to come into your coworking space with no apparent reason, then you should be lucky.

        The ideal coworking space has core values with which each member of the community can identify. Knowing “why” can help you start your coworking spaces.

        You’ll have to change your approach as your coworking business grows. But having a clear vision will ensure that these changes are well-intentioned, rather than forcing you in two directions.

        3. Location, Location, Location!

        Before you sign any deal for cheap rent, consider why the price is so low.

        What is the location? It could be that the space is located in an area with a poor transit system, even though it’s a great price.

        It is easier to fill workstations at a coworking area if it’s centrally located. You’ll need a minimum occupancy rate of 80% to thrive. If your property is located in a rural or remote area, this won’t be possible.

        4. Discover what’s happening in the industry

        Find out how the coworking industry is developing in your area and nearby.

        You can also ask other managers of coworking spaces in the area for statistics and perspectives.

        Post your questions in coworking forums via social media. Some surveys provide valuable data about the growth of coworking.

        5. Learn Your Target Audience

        What type of client are you seeking and what kind of coworking space do they prefer to use?

        Some coworking spaces cater to large corporations, while others are geared towards smaller groups.

        If you know more about the community that you want to reach, it will be easier to plan for cost, location, promotion and facilities.

        Budgets, Capital Plans, and Financial Plans

        A financial plan is a crucial part of starting a coworking space. Here are a few things to help you get started.

        You’ll need money, but you should also consider how much money you can expect to make, when it will happen, the potential monthly revenue, and any setbacks.

        It isn’t easy to decode these strategies. You should however base your strategy on reasonable estimates that you can get from data and research.

        You’ll need to have a solid financial plan if you want investors and partners.

        7. Create A Balanced Pricing System

        You’ll have a community that is deserted if you charge too much for each workstation.

        A price that is too low will make prospective members think your offer is too cheap and not standard.

        You can charge what you think your service is worth.

        Community members are willing to pay more for exceptional services if they see the benefits, like increased productivity and earnings.

        8. Create your ideal team

        Owning a business means doing everything you can yourself. This strategy reduces your operating costs.

        You’ll need to hire a reliable, efficient staff because most people are not experts in all areas.

        As a group, coworking spaces require a manager with operational experience, a marketer, and expertise in coworking software.

        You can do some of the work yourself if you’re an expert. But if not, create a team and/or hire freelancers for other tasks.

        Think about potential partners, investors and other employees that can help improve the quality of your coworking area.

        9. Create A Marketing Strategy For Coworking Spaces

        Your coworking space can be a place for people who are highly motivated to achieve, innovate and thrive.

        A coworking marketing strategy is just as important as any other product when it comes to selling to your target audience.

        You can place ads in local papers or niche publications if your budget allows.

        In the new age, an attractive website and a strong social media presence are essential for both marketing and advertising.

        Word of mouth is more trusted by consumers than traditional advertising. Therefore, promoting a brand through community members can be extremely beneficial.

        It is therefore a good idea for you to reward your members who refer others to the coworking space.

        You should also consider setting up a booth at trade shows where you can distribute promotional materials to passersby.

        Always focus on your core message. This will simplify your marketing strategy.

        10. Concentrate On A Certain Niche

        If you do not have a specific niche, your coworking business will be very generalized. This makes it difficult to develop a successful business strategy.

        It takes extensive research to find out what makes your coworking community different from others. You should focus your efforts on those employees that your competitors overlook if they cater to a particular type of employee.

        Look at what other communities have done and find out which lucrative markets they are not yet addressing.

        Coworking Business Losses are Frequent

        It’s important to identify the typical losses in business and determine ways to increase profits.

        You can use them to present a clearer view, so you can optimize your business strategy and minimize losses.

        Here are some of the most common losses that coworking spaces experience:

            • According to reports, leasing space from a property owner costs a significant portion of the total loss.

            • The operating expenses are also a major source of losses.

            • Marketing and advertising are considered to be a major expense.

            • Salary and Benefits of Employees

            • Maintenance costs

            • Installation of equipment

          The Key Takeaways

          When developing your coworking space model, it’s important to evaluate the best models using some basic criteria.

          To create something amazing, you must first evaluate something fantastic.

          You can identify a coworking area with a successful revenue model based on three criteria: location, innovation, and community.

          Freelancers, workers, and companies primarily design coworking spaces to foster a collaborative community.

          It is not realistic to expect coworking spaces will run at a profit. Everyone is happy in a profitable coworking space: staff, members, and of course the owner.

          A lucrative revenue model for coworking spaces can indicate you have succeeded in creating a community, which is what coworking spaces strive to achieve.

          Coworking Software that is suitable for your business can improve the efficiency of your operations and revenue. Coworking SEO offers coworking software that manages your rental space, vacancies, and daily operations. Book a meeting for more information!

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