- The cost of starting a coworking space depends on a number of factors including where you live and how much you want to invest up front
- We break up the cost of starting a coworking space into six categories:
- Physical space
- Interior design
- Business operations
After a couple of hard-hit years, the coworking industry is coming back in full swing. This growth is being fueled by remote workers who are searching for an alternative to working from home.
Some people are calling coworking spaces, “the third workspace”, the first two being the office and the home. This growing demand for coworking spaces creates a tremendous business opportunity to open your own space.
We have lots of resources to help get your first coworking space up and running including:
- The most comprehensive guide to starting a coworking space ever
- Creating coworking membership plans
- Developing a coworking location strategy
- Finding the right mix of hot desks and dedicated desks
- Writing a successful coworking business plan
In this article, we’ll cover all of the costs you’ll need to consider before starting a coworking business.
How much does it cost to start a coworking space?
The cost of starting a coworking space depends on a number of factors including where you live and how much you want to invest up front. Some have opened coworking spaces for as low as $20,000 while others can easily cost $100,000 plus.
In this article, we’ll outline the 15 essential costs you will need to consider before opening a coworking space. You can break up the cost of starting a coworking space into six categories:
- Physical space
- Interior design
- Business operations
This article will help you get a sense of everything you will need to invest in order to start your coworking space.
What are the different costs of opening a coworking space?
1. The Physical Space
The most important and most expensive cost of starting a coworking space is the space itself. This cost varies drastically depending on:
- Size of space
- Age of building
- Renting vs. buying
There’s a lot to think about when choosing a location – here is a guide to help you develop a coworking location strategy.
One important question to consider is whether you want to buy or rent your space. Most people choose to rent or lease their coworking space in the beginning. Buying a space will be much more expensive up front, but will give you more control and save you money in the long run.
Some places will legally require you to insure your coworking space. Even if it’s not required, it’s still a good idea to have your place insured.
Insuring your space protects you from a number of unpredictable catastrophes that could set you back significantly in cost down the road.
Utilities are an essential for any physical space. This includes:
- Water or hydro
The one cost you will not want to skimp on is your internet services. Having reliable, high speed internet is perhaps the most important aspect of operating a coworking business.
If your internet is unreliable, people will not want to work in your space.
Furniture is a necessity when opening a coworking space. It doesn’t need to be fancy, but you do need to have it.
There are many budget-friendly ways of getting furniture to keep your costs low.
You can easily grab a few clean looking desks and chairs from IKEA for under $100 each and spruce up the space with your decor.
You can also source from the community or look for gently used furniture postings on Craigslist if you’re trying to keep your budget low.
5. Decor and design
Investing in interior design can go a long way in creating a beautiful, welcoming space that people love.
It doesn’t have to be elaborate either. You can create a beautiful space with:
- Simple artwork or wall stickers
- A whiteboard with custom drawings from your staff
- A rug or pillows for a few of your chairs
- Custom lighting
You can make your space anything you want with as much or as little as you want.
While it’s great to invest in some basic decor right off the bat, don’t feel like it has to be perfect before you open. Your space can grow with you as you grow.
6. Housekeeping items
Operating a coworking space is like running a hotel. You need to supply all of the miscellaneous housekeeping items that someone would need during the day including:
- Hand soap
- Dish soap
- Toilet paper
- Paper towels
- Cleaning supplies
The list goes on and on. Think of everything you have at your home and bring these ideas into your coworking space to make sure everyone’s needs are met.
Don’t forget to factor these costs into your ongoing monthly budget as well, as you’ll need to make sure your space is always stocked.
7. Coffee, tea, and snacks
Your coworking space is more than just a place where people can come and work. Ultimately, it is an extension of the home.
Complimentary coffee and tea is a small expense to you, but it can go a long way in helping to build your coworking community.
It’s also an opportunity to differentiate yourself from others in the market. Maybe your space has the best, locally sourced, organic coffee. That’s a compelling reason for people to continue to visit your space.
8. Office Supplies
It’s a good idea to keep some basic office supplies on hand in case people need to use them. These items can be easily purchased on Amazon pretty cheap. Make sure you purchase:
- 3-hole punch
You may also want to set up a printing system in your space. You can charge people to use the printer, creating an additional stream of revenue for your business.
9. A website
A website is a necessity for any new coworking space. How else will people find you?
If creating a website feels like a big undertaking right now, then you can focus on growing a following on social media for free.
However, a website will certainly be in your future. The cost of creating a website will depend on whether you want to do it yourself via a service like SquareSpace or hire a freelance developer to do it for you. This could be upwards of $1,000 or more.
Then you’ll have the ongoing costs of operating your site which can be anywhere from $10 – $40 a month depending on which platform you choose.
Depending on the size of your space, you may want to hire staff immediately or wait until membership picks up. Here’s helpful guide to hiring your first staff members at your new space.
There are many options for hiring a community manager for your space. Here are a few in order of most to least expensive:
- Full-time community manager
- Part-time community manager
- Virtual assistant
- Student intern
It’s possible to open without having to hire any staff. If you plan on scaling however, you will need to onboard more people onto your team, so it is important to keep this cost in mind as you grow.
11. Coworking management software
Operating a coworking space comes with a lot of moving parts. A management software will automate your processes for you, saving you a tremendous amount of time and money long-term.
You can always manage your work using excel spreadsheets and pen and paper short-term. Employing software however can help you:
- Manage resource bookings
- Measure the use of your space
- Grow your business revenue
- Engage your community
Most software is priced as a monthly or annual subscription starting at around $200/mo. Learn more about coworking management software with our complete list of Optix features.
12. Access control system
People are going to need a way of accessing your space other than a physical key. It is possible that you have someone on site at all times who manually opens and closes the building each day.
However, an access control system can automate this entire process for you, while giving your users more flexibility for how they are able to access your space.
Depending on the complexity, an access control system may include the cost of the hardware itself, installation, fob keys, and annual subscription fees. It’s important to keep all of the costs in mind when choosing a system for your space.
13. Security system
A basic security system will keep the minds of you and your users at ease. It is also a powerful deterrent to keep criminals at bay.
You can easily pick up a security camera at Best Buy or on Amazon for under $100. These systems sync to your phone and will notify you if someone unauthorized is accessing your space.
14. Video conferencing tools
Serving remote workers means that you will need to provide some basic video conferencing tools. This includes things like:
- Zoom subscription
Offering high-end tools is another way to possibly differentiate yourself from other coworking spaces. You can also charge members to use Zoom on a one-off basis, opening up a way of getting some of those funds back.
15. Miscellaneous hardware
Technology is an important part of every coworking business. You will need power strips, extension cords, and possibly internet routers for your space.
You will also want to provide your members with as much tech as you can to support their daily needs.
Some electronics you can offer:
- Computer chargers – PC and Mac
- Phone chargers – Apple and Android
- HDMI cables
The cost of the technology you offer will depend on the quality, as well as the volume of what you choose to provide.
The cost of opening a coworking space depends on many factors
It’s entirely possible to open a barebones coworking space at a relatively low upfront cost.
However, it’s important to remember that a coworking space is more than a physical space – it is a hospitality service with your members at the center of the experience.
It really is the little things that help build a coworking community and make a place truly feel like a home – like warm lighting, beautiful plants, and the best coffee in the neighbourhood.
Just getting started with a space? Check out this guide to coworking revenue growth models to understand how to make your business profitable over time.