After being in the coworking market for several years, we understand the desire for new operators to know how much it will cost them to achieve their dreams and launch a new space.
The challenge is, these costs can vary drastically based on where you’re located, how big your space is, if you’re buying or renting the building, the list goes on and on.
We put together this guide based on our years of experience in the industry to help you figure out all of the costs you’ll need to consider in starting your coworking space, including how to open a coworking space on a budget.
By the end of this article, you’ll have a better idea of how much you will expect to pay in opening your first coworking space. Let’s dive in!
How much does it cost to start a coworking space?
The cost of starting a coworking space depends on a number of factors, from where you live to how big your space is.
Alex Hillman opened his first coworking space, Indy Hall, in Philadelphia in the early 2000s. It cost him just under $15,000 USD for an 1,800 square foot space. When he expanded to a 4,500 square foot location, it cost him roughly $45,000. This does not include recurring operating costs.
This is just one example of the cost of opening a space. This number is highly variable and changing quickly as we’ll break down later on in this article.
How much capital do you need to start a coworking space?
To start a coworking space, you’ll need capital to cover all upfront expenses including the property, the interior design, any housekeeping pieces, business operations, technology, and other electronics.
Up to $100,000 in capital seems to be a generally well agreed upon number needed to launch a coworking space based on research in this article.
Again, this number is just an estimate as many spaces have opened with much less capital (and others with much more).
15 coworking space costs when starting 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 ranges widely depending on:
- Size of space
- Age of building
- Renting vs. buying
- Renovations needed
According to the 2023 National Office Report by CommercialEdge, the average office listing in the United States was just under $38 per square foot. This number varies across different cities with San Francisco listing at $56 per square foot and Orlando close to $25 (note this is the listing price and not the trading price).
One important question to consider at this stage is whether you want to buy or rent your space. Most people choose to rent or lease their coworking space in the beginning due to affordability. They may consider a management agreement with their landlord that works favorably for both parties.
Buying a space will be much more expensive up front, but will give you more control over your building. Many space owners prefer to own their building
Estimated cost: $9,500 a month for a 3,000 square foot space + $9,500 for a deposit ($19,000 total)
Obtaining proper insurance coverage for your coworking space will help protect you, your business, and your members in case things go awry. At minimum, you’ll want:
- General liability insurance
- Professional liability insurance
- Commercial property insurance
- Business owner policy
Insuring your space protects you from a number of unpredictable catastrophes that could set you back significantly in cost down the road. Coworking insurance can start for as little as $25 a month but can increase significantly from there, depending on your space.
Estimated cost: $25/mo
3. Utilities and internet installation
Operating a physical space will require paying utilities including electricity, water, gas, and internet.
According to IotaComm, the average cost of utilities in commercial spaces in the United States is $2.10 per square foot. For office buildings, that number is closer to $1.80 per square foot. For a 3,000 square foot coworking space, this would equate to about $5,400 a month.
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.
On top of your monthly utility expenses, you’ll also need to consider any expenses related to internet and network installation. According to Forbes, the average cost is just under $4,000 (one-time fee) for a hardwired internet installation.
Estimated cost: $9,400
Furniture in a coworking space typically includes:
- Other seating areas
There are many budget-friendly ways of getting furniture to keep your coworking costs low, whether that’s by thrifting, donations, Craigslist, or IKEA. You can piece together different furniture for a funky-fun interior feel.
However, according to Chipman Relocation and Logistics, you can expect to pay around $15,000 for a 2,500 square foot space, for new mid-range furniture.
Estimated cost: $15,000
5. Decor and design
Outside of basic furniture, investing in interior design elements can go a long way in creating a beautiful, welcoming space that people love. It doesn’t have to be elaborate. 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.
Set yourself a decoration budget and stick to that. We recommend between $1,000 and $3,000 to start for plants, art, and other elements to make the space feel at home.
Estimated cost: $3,000
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.
When just setting up your coworking space, you can estimate spending about $100 on housekeeping items and cleaning supplies, and around $50 a month going forward to upkeep supplies.
Estimated cost: $100
7. Coffee, tea, or 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.
Depending on the quality and quantity of the coffee, tea, and snacks you’ll provide, as well as the size of your space, you can estimate about $15 a month per member for coffee.
Estimated cost: $450 based on 30 members
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 at an affordable cost. 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.
If you opt for office supplies only, you can budget anywhere from $50 to $100 a month on supplies. If you opt for a printer, you’ll be paying for the printer, ink, ongoing maintenance, and a print management system like ezeep. This can cost anywhere between $900-$3,000.
Estimated cost: $1,000
9. A website
A website is a necessity for any new coworking space these days. 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.
If working with a freelance website developer, you can expect to pay between $2,000 and $9,000 for a small website (less than 20 pages) according to Arka Softwares.
Then you’ll have the ongoing costs of operating your site which can be anywhere from $10 – $40 a month depending on the servers you choose to use.
Estimated cost: $2,500
Depending on the size of your space, you may want to hire staff immediately or wait until membership picks up before bringing other people on. Here’s a helpful guide to hiring a coworking community manager if you’re looking to get started with hiring right away.
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 likely need to onboard more people onto your team, so it is important to keep this cost in mind as you grow.
Let’s assume you decide to hire a part-time community manager to get your space up and running. You’ll expect to pay around $400 to $1,000 a week depending on hours worked and wage.
Estimated cost: $1,600 a month for a part-time community manager
11. Coworking management software
Operating a coworking space comes with a lot of moving parts. A coworking software like Optix 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. At Optix, we charge a monthly subscription based on number of members and number of locations. The pricing is designed to be flexible and scale with you as you grow.
Estimated cost: $200
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 in how they access the space.
Depending on the complexity, an access control system may include the cost of the hardware itself, installation, fob keys, and annual subscription fees. Here is what Kisi estimates the cost of their access control system to be:
- Locking hardware: $20-$900
- Access control accessories: $10-$500
- Door Reader: $80-$1,200
- Door Controller: $180-$3,500
- Software License or Maintenance Cost: $0-$50 per door per month
Taking the average of the range of costs above, you can put the price of an access control system installation like Kisi on three doors at roughly $3,060.
Estimated cost: $3,060
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 unwanted crimes 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. You can also invest in an installed security system for 10x that cost.
Ackerman Security gives an average cost of $2,000 for a professional commercial security system including hardware, installation, and monthly operating costs.Which option you go with is entirely up to you, but you can’t discount the value of peace of mind.
Estimated cost: $2,000
14. Video conferencing tools
Serving remote workers means that you may want to consider providing 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. The cost of video conferencing tools can start at around $2,500 with the largest investment being in the television and webcam you set up.
Estimated cost: $2,500
15. Miscellaneous hardware
Technology is an important part of every coworking business. You will need power strips, extension cords, internet routers…the list goes on and on.
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 include:
- Computer chargers – PC and Mac
- Phone chargers – Apple and Android
- HDMI cables
The cost of the technology you offer will depend on what you choose to offer, the quality of those choices, as well as the volume. Starter Story estimates the cost of office equipment to be anywhere between $500 to $5,000 a year per employee.
Given that not every member will have their own equipment, you could take the average cost of the items you want to buy and price it out accordingly.
Estimated cost: $1,200
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, as shown through our initial example.
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 neighborhood.
Using the averages provided by various outlets, the cost of starting our hypothetical coworking space was around $60,000 USD. Take this information as a very basic average to build off of.
Just getting started with a space? Learn how Optix can help you grow your business over time.