In these modern times, freelancers, consultants, remote employees, or professionals without an office can all benefit from a space where they are surrounded by like-minded individuals who motivate them with their interaction and works. Working alone from home comes with a range of disadvantages since it’s directly linked to the many dangers of workplace isolation.
Co-working spaces now serve as a primary catalyst for human approach designs, which help to enhance collaboration, innovation, and productivity. Today, there is a lot of reasons to start your own co-working space, but ‘wanting’ and ‘actually starting’ are two different things. Bringing the vision to life warrants that you pen down a detailed and organized business plan.
Steps on How to Write a Co-working Space Business Plan
Table of Content
1. Executive Summary
At Wok Zone, we plan to create an entirely new marketplace that fills the gap that employers are leaving behind. Our objective is not to recreate the same quality of working life that employers have been providing for more than a century now, but to create a better quality of working life that will help carry the torch of Oakland startups into the future.
a. Our Services
As the Silicon Valley tech scene expands beyond San Francisco, Oakland’s lower living costs and robust transit systems are becoming more and more appealing to prospective startups, and these consumers are searching for places to work, a computer, a pension, healthcare, someone to calculate and pay their taxes, food and drink and everything else employers used to provide on their behalf.
b. Nature of the Business
At Wok Zone, our business model differs from co-working: workspace isn’t the product that we intend to sell; instead, it is the market floor for selling everything else. We plan to design a better quality workspace than what exists currently in the market and bring it in public where people can walk in and out of it freely.
c. The Industry
Wok Zone will flourish and take up market shares in the co-working space industry that is massively growing by leaps and bounds.
d. Mission Statement
Our mission at Wok Zone is to create a new infrastructure that takes the place of employers.
e. Vision Statement
Our vision is to become a renowned leader in the co-working space business in the whole of California by revolutionizing the industry and expanding our services to cover the needs of our clients. We believe that the more we help people flourish in the work they are doing, the happier they are!
f. Tagline or Slogan
Wok Zone – Investing in the Future of Work
g. Legal Structure of the Business (LLC, C Corp, S Corp, LLP)
Wok Zone will be established and registered in the state of California as a Limited Liability Partnership. The partners/management team consists of Windy Grace, Felix Wilder, Martins Jones, and Bob Castle. This team has a vast range of knowledge that shall help build the business.
h. Organizational Structure
- Floor Manager
- Sales and Marketing Executive
- Client Service Executive
i. Ownership/Shareholder Structure and Board Members
Wok Zone will be jointly and equally owned by Windy Grace, Felix Wilder, Martins Jones, and Bob Castle. Owing to their wide array of knowledge and expertise, they will also jointly manage Wok Zone.
3. SWOT Analysis
- An affordable, professional place to work and meet
- New technologies
- A collaborative environment
- Experience and knowledge of our team
- Number of members in a co-working space
- Age of our space and the maturity of our community
- No other well-defined sources of income
- A viable location
- The rising popularity of shared office spaces
- More people embracing entrepreneurship
i. How Big is the Industry?
According to industry reports, the co-working space industry is growing by leaps and bounds. The massive demand for a remote workforce and the growth of the gig economy are propelling the need for workspaces. Globally, the co-working market was valued at $26 billion in 2019.
ii. Is the Industry Growing or Declining?
The co-working industry is growing massively. Co-working growth is evident in nearly every relevant metric, including the number of new leases, number of seats, dedicated square footage, and growth rate.
iii. What are the Future Trends in the Industry
According to reports, from cannabis co-working spaces to health and wellness-focused office space, it’s becoming clear that the entire flexible workspace industry has become increasingly targeted to cater to the specific needs of its customers. Note that as the freelance and remote worker becomes a bigger percentage of the general workforce, businesses in this industry will have to be more accommodating and differentiating than ever before.
iv. Are There Existing Niches in the Industry?
- A Co-Working Space Tailored to the Legal Profession
- A Community-Based Space for Female Entrepreneurs
- A Co-Working Space Geared to the Outdoor Industry
- Musician-Focused Spaces
- Wellness-Oriented Spaces
- LGBTQ Spaces
- Construction-Focused Spaces
- A Co-working Space for Emerging Cannabis Startups
- Band Rehearsal Space
- A Co-working Space for Sustainability/Environmental Startups & Entrepreneurs
- A Co-working Space for Fintech Startups
- A Co-working Space for Foodtech Startups
v. Can You Sell a Franchise of your Business in the Future?
At Wok Zone, we do not have plans to sell a franchise in the future. As our customer base scales, we will start building new locations. At Wok Zone, we won’t exclusively sell our products and services; it will be an open marketplace that encourages others to become solutions that our advisors recommend and sell.
- Rivalry among Competitors
- Availability of Substitutes
- The threat of New Entrants
- Bargaining Power of Suppliers
- Bargaining Power of Buyers
i. Who are the Major Competitors?
- The Wing
ii. Is There a Franchise for Co-working Space Business?
- Regus: $549,000-$998,000
- Office Evolution: $373,950-$1,557,000
- Venture X: $911,690-$3,602,710
- Rent 24: Available upon inquiry.
- Serendipity Labs: $331,200 – $1,559,100
iii. Are There Policies, Regulations, or Zoning Laws Affecting Co-working Space Business?
Yes, numerous code issues come into existence once you are trying to densify a floor for co-working, especially in older, smaller buildings. Owing to that, it is always advisable to review the building’s Certificate of Occupancy (CofO), the permitted uses within the building’s zoning district, the live load of the floor, and the maximum number of persons per floor before settling for a location.
It is also necessary to study the egress of the floor to ensure a change is feasible and also carefully evaluate the fixture counts, live load, accessibility, and various other elements. Co-working spaces that inculcate restaurants will also have stricter regulations to face because offices and restaurants have different occupancy requirements.
a. Who is your target audience?
i. Age range
- Gen Z (18-22 years old): 40%
- Millennial (23-38 years old): 20%
- Gen X (39-54 years old): 30%
- Baby Boomers (55+ years old): 10%
ii. Level of Educational
- High school graduate or less: 2%
- Some college or Associate degree: 28%
- Bachelor’s degree: 32%
- Postgraduate 38%
iii. Income Level
Our target audience at Wok Zone will earn $100,000 to $149,000 a year.
- White: 75.0%
- Hispanic or Latino: 10.3%
- Asian: 8.3%
- Black or African American: 3.3%
- Unknown: 2.6%
- American Indian and Alaska Native: 0.5%
There are no language barriers or restrictions at Wok Zone.
vi. Geographical Location
Once a major destination on the transcontinental railroad; Oakland has long grown into a center for bold ideas and innovative thinking, boasting of a growing multitude of freelancers and startup owners.
Although some clients at Wok Zone will simply need any available desk, others may have additional space considerations, like a conference room or flexible office for client meetings or collaborations.
b. Advertising and Promotion Strategies
- Begin with a quality website
- Leverage social media to our advantage
- Utilize content marketing
- Advertise near transport hubs
- Host engaging events
- Gift memberships strategically
- Create a timeline for marketing.
i. Traditional Marketing Strategies
- Offer Membership Perks
- Create a Health Insurance Program
- Offer Daycare Services
- Help our Members Succeed
- Advertise to Current Members.
- Host Events at Your Co-working Space
- Partner with Local Businesses
- Advertise Toward Commuting Workers
ii. Digital Marketing Strategies
- Advertise our Co-working Space Using PPC Advertising (Pay-Per-Click)
- Content Marketing For our Co-working Space
- Social Proof & Reputation Management
- Create a Website
- Co-working Space SEO (Search Engine Optimization)
- Co-working Listing Websites
- Use a Blog
- Ask Members & Partners for Backlinks
iii. Social Media Marketing Plan
- Facebook ads, Twitter & LinkedIn followers
- Ask question platforms (Quora, Reddit)
- Email list (Newsletter)
- In-app notifications (social media sharing buttons, newsletter subscription)
- Promotion in relevant communities
- Re-purpose content for different media (videos, podcasts, etc.)
c. Pricing Strategy
At Wok Zone, our reservations will be priced at $2.50 per half hour. This is cheap enough for people to reserve for even the longest work sessions ($10 for the 235-minute session) but expensive enough to discourage them from blocking out the table all day ($60 for 24 hours)
Sales and Distribution Plan
a. Sales Channels
Ensuring a better quality work-life is the idea our marketing plan at Wok Zone will buttress and our workspace will be the medium for conveying it. We realize that people rarely dream about pensions. Instead, they want a better quality work-life.
Our space at Wok Zone will be a local mass-market medium. We will ensure it is in a prime real estate in San Francisco. All other media channels we use will help people to see it, especially those who aren’t standing right in front of it.
b. Inventory Strategy
In terms of inventory strategy and management, we will get co-working software solutions that will help us cover the needs of our workspace that will enable members book a meeting room online, manage their membership plan, provide IoT devices, and enabling card payments.We believe all these will contribute to the usability of our co-working space.
c. Payment Options for Customers
Below are the payment options we intend to make available to our clients;
- Payment via bank transfer
- Payment via credit cards
- Payment via online bank transfer
- Payment via check
- Payment via mobile money transfer
d. Return Policy, Incentives, and Guarantees
At Wok Zone will operate a no refund policy. This entails that we will not provide compensation for services rendered at our workspace.
e. Customer Support Strategy
At Wok Zone, we understand that our long-term success depends on our ability to establish a community of clients. Owing to that, we intend to publish a newsletter, create photo boards and also host regular events to help everyone get to know each other and benefit from the group’s cumulative knowledge.
The most successful brands are known to influence the way people feel in their spaces, by carefully controlling all the variables in the environment.
After extensive research, we realized that a handful of workspaces have applied a few of the principles, but nobody has made it a core of their design. We at Wok Zone do not intend to make these mistakes, as we have analyzed and inculcated environmental psychology into the design of our workspaces, and also into the products and services we offer.
a. What Happens During a Typical Day at a Co-working Space Business?
The essential work of the business is to make sure the lights are on. Clients are known to use co-working spaces as offices, and they expect the lights to be functioning, the roof to not be leaking and internet access to be fully functional. Should any utility develop any form of issue, resources are expected to be immediately channeled to resolve the problem as quickly as possible.
Aside from those possible crises noted above, managing a co-working space daily involves keeping the area clean, socializing with clients, and meeting potential clients. Also note that there are bills to pay and administrative matters to consider.
b. Production Process (If Any)
The only production process at Wok Zone is the production of drinks sold at our space. We intend to source raw ingredients and make them ourselves.
c. Service Procedure (If Any)
At Wok Zone, we understand that we need a small team of employees from the outset. Our space will remain open round the clock, therefore we will employ a client service executive to be available to attend to our clients and also be called for emergencies.
d. The Supply Chain
At Wok Zone, we believe that the more we help people with the work they love doing, the more people will see our co-working space as a big deal.
e. Sources of Income
- Private office rental
- Desk rental
- Combined membership plan
- Conference room services
- Virtual office services
- Food and drinks
a. Amount Needed to Start your Co-working Space Business?
Owing to our extensive research, we will require $900,000 to launch Wok Zone and an additional $220,000 to cover the first-year salary of our core team.
b. What are the Costs Involved?
- Security deposit: $75,000
- Environmental equipment (air quality, sound, etc): $79,220
- Food & drink equipment: $56,270
- Other equipment (fire, security, etc.): $17,205
- Technology: $48,000
- Furniture: $153,600
- Renovation: $850,000
- First month’s rent: $25,000
- Estate agent fees: $3,750
- Utilities: $700
- Inventory (2 months): $41,729
- Recruitment, training, uniforms: $7,420
- Miscellaneous: $100,000
c. Do You Need to Build a Facility?
Our plan at Wok Zone is to start our business from a rented luxury office space in the city hub of San Francisco. Initial investments will be made to set up an office, website, and management software to schedule, manage and welcome our clients. Additions to space will be made as the company expands operation.
d. What are the Ongoing Expenses for Running a Co-working Space Business?
- Security & after-hours
- Member’s benefits
- Training, development, uniforms, etc.
- Occupancy costs
- Repairs & maintenance
- Waste & recycling
- Payment processing
- Environment (air quality, landscaping, etc)
e. What is the Average Salary of your Staff?
- President: $0
- Floor Managers: $56,720/Year
- Advisors: $0
- Sales and Marketing Executive: $51,980/Year
- Accountant: $46,711/Year
- Food Technician:$43,562/Year
- Baristas: $41,000/Year
- Client Service Executive: $38,900/Year
f. How Do You Get Funding to Start a Co-working Space Business
Wok Zone will be started, managed, and fully funded by its four founding members. They won’t seek outside funding, instead will generate the startup capital to have full ownership of the business.
a. How Much Should You Charge for your product/Service?
Since we will be offering flexible office solutions, we will have multiple subscription options. For example, our clients can pay by the day, week, or month. The cost for our monthly membership will be $220. We will charge more for a dedicated desk, an office, or a locker. We will also charge clients to use our meeting room and every other amenity.
b. Sales Forecast?
- First Fiscal Year (FY1): $420,000
- Second Fiscal Year (FY2): $790,000
- Third Fiscal Year (FY3): $1.332 million
c. Estimated Profit You Will Make a Year?
At Wok Zone, we expect to make;
- First Fiscal Year (FY1): $189,000 (45% of revenue generated)
- Second Fiscal Year (FY2): $186,000 (60% of revenue generated)
- Third Fiscal Year (FY3): $732,900 (55% of revenue generated)
d. Profit Margin of a Co-working Space Business
Profit margins in this business tend to fluctuate, especially since businesses in the industry are not in for the money, but primarily to sustain their space and grow their community. In addition, there are many variable and fixed costs in the business. Even when the business expands, there will be additional expenses and factors that will further affect the potential profit.
a. How do you intend to grow and expand?
At Wok Zone, we do not have plans to sell a franchise in the future. As our customer base scales up, we will start building new co-working spaces.
b. Where do you intend to expand to and why?
- San Francisco
We at Wok Zone have chosen to expand to these areas because the Bay Area tech industry raked in $45.9 billion in funding in 2019 — a full 44 percent of the nation’s tech investments — and the city still hosts the world’s deepest tech and freelance talent pool. And although some of its larger technology companies continue to draw skepticism from lawmakers, these areas boast of a ton of alternative employment options for smaller, mission-driven startups.
At Wok Zone, we strongly believe that acquisition and mergers will suit our business interests. Since we won’t exclusively sell our products and services; we believe that acquisition and mergers will lead us more into the open marketplace and encourage others to become solutions that our advisors recommend and sell.