Coworking Space Business Plan Template
If you want to start a coworking space business or expand your current coworking space business, you need a business plan.
Fortunately, you’re in the right place. Our team has helped develop over 100,000 business plans over the past 20 years, including thousands of business plans for coworking spaces.
The following coworking space business plan template and example gives you the key elements you must include in your plan. In our experience speaking with lenders and investors, the template is organized in the precise format they want
I. Executive Summary
Business Overview
[Company Name] was started ten months ago to meet the surging demand for flexible, comfortable and reliable coworking office space. Several businesses in the regional area have been seeking coworking space locations for over a year; however, most are already in use. With this in mind, [Company Name] was formed by [Founder Name], [Founder Name] and [Founder Name] to meet these specific office space needs.
[Founder Name] and [Founder Name], licensed commercial real estate brokers, began to hear the same questions repeatedly from their corporate clients during this past year: Should we take a 5-year lease on office space in a building? Should we take the risk of buying land and building our offices? Do any of our employees need an isolated workspace? Will groups or teams collaborate frequently on various projects? Will projects be analyzed by individuals or research and development teams? Answers to these questions have highlighted the critical need for the plan and leasing program we’ve developed: flexible, comfortable and reliable coworking space for everyone.
The changing nature of our economy today calls for companies to consider the use of assets wisely as they determine the type of office building or workspace that best suits their needs. One of the largest overhead costs is that of office space, particularly when land must be purchased and a building raised. Our clients recognize that their assets can be put to better use in other areas, such as innovation, technology and company growth overall. With this understanding, [Company Name] has been recently established as the new leader of coworking spaces that actually work.
Within the next 5 years, we fully anticipate perfecting and polishing our working model, adding amenities as we listen to client needs. At that time, our long-term plans include creating a franchise opportunity for buyers across the US to adopt the consummate coworking space business model found in [Company Name].
Services & Products Offered
At [Company Name] our process begins with finding the perfect location for our clients. We then secure the lease or oversee the purchase of the workspace. Our next steps include: surveying employees (to determine their needs/wants), building spaces to maximize comfort, allotting community spaces for team collaboration, and building out fixtures, furnishings and any office amenities, such as a kitchen or exercise room.
In a recent study by Grand Canyon University, almost 84% of people who are situated in coworking spaces report a very high degree of satisfaction with their working conditions when their employer has addressed their needs. This is why [Company Name] offers workspaces that are conducive to high productivity and a valuable degree of community, as we meet the needs of employees.
Customer Focus
The clients of [Company Name] are typically business owners, investors, business executives, and realtors seeking work spaces for 10-50 workers. They are focused on placing employees in the best environment available to encourage high-performance team production.
The clients of [Company Name] also recognize the wants and needs of their employees, so they may also seek full kitchens and workout rooms in addition to coworking spaces. [Company Name] strives to maximize their investment, whether by buying or leasing, by ensuring that production remains high and team enthusiasm matches production.
The demographics of current and potential clients within the US include:
- Over 1 million business owners looking for coworking spaces
- Almost 2 million employees currently work in coworking spaces
- Over 58,000 investors are looking to invest in coworking spaces
Management Team
[Founder Name], [Founder Name] and [Founder Name] have been working together within the commercial real estate industry for over ten years.
[Founder Name] and [Founder Name] began working together as commercial real estate brokers ten years ago and [Founder Name] completed their circle of success as an escrow officer specializing in commercial building and leasing. This background of compatible roles has created the basis for our clients’ trust and confidence. We have created [Company Name], a profitable company, within the past six months that proves our company motto: Coworking Space Works.
Success Factors
[Company Name] can point to two highly-successful projects that have already been completed profitably within the past six months:
- The Hillside Project, for a twenty-employee human resource management firm, became the cornerstone of our success. [Company Name] successfully provided coworking space and sound-proof partitions for the employees, with a kitchen area added as an employee bonus.
- [Company Name] developed a conjoined space, The Broadstone Building, for our second client with equal success. A ten-person team of engineers was positioned strategically within a twenty-person programming group. The collaboration of the combined team has already produced stellar results for our client. In lieu of this success, our client has requested that [Company Name] assist with another large coworking space project.
Financial Highlights
In light of our early and profitable success, [Company Name] is currently seeking $280,000 to meet growth expectations. Specifically, these funds will be used as follows:
- Working capital: $180,000 for 2 additional commercial real estate brokers and 1 administration director for a period of one year
- 3D printer and CAD program for design and development plans: $100,000.
Top line projections over the next five years are as follows:
| Financial Summary | FY 1 | FY 2 | FY 3 | FY 4 | FY 5 |
|---|---|---|---|---|---|
| Revenue | $560,401 | $782,152 | $1,069,331 | $1,379,434 | $1,699,644 |
| Total Expenses | $328,233 | $391,429 | $552,149 | $696,577 | $776,687 |
| EBITDA | $232,168 | $390,722 | $517,182 | $682,858 | $922,956 |
| Depreciation | $7,000 | $7,000 | $7,000 | $7,000 | $7,000 |
| EBIT | $225,168 | $383,722 | $510,182 | $675,858 | $915,956 |
| Interest | $6,016 | $5,264 | $4,512 | $3,760 | $3,008 |
| Pre Tax Income | $219,152 | $378,458 | $505,670 | $672,098 | $912,948 |
| Income Tax Expense | $76,703 | $132,460 | $176,985 | $235,234 | $319,532 |
| Net Income | $142,449 | $245,998 | $328,686 | $436,864 | $593,416 |
| Net Profit Margin | 25% | 31% | 31% | 32% | 35% |
II. Company Overview
This Section's Contents
- Business Overview
- Services & Products Offered
- Customer Focus
- Management Team
- Success Factors
- Financial Highlights
- Who is [Company Name]?
- [Company Name]’s History
- [Company Name]’s Products/Services
- Demographic Profile of Target Market
- Customer Segmentation
- Direct & Indirect Competitors
- Competitive Advantage
- The [Company Name] Brand
- Promotions Strategy
- Pricing Strategy
- Functional Roles
- Milestones
- Management Team Members
- Hiring Plan
- Revenue and Cost Drivers
- Capital Requirements and Use of Funds
- Key Assumptions
You can download our Business Plan Template (including a full, customizable financial model) to your computer here.
Who is [Company Name]?
[Company Name] was started ten months ago to meet the surging demand for flexible, comfortable and reliable coworking office space. Several businesses in the regional area have been seeking coworking space locations; however, none are available. With this in mind, [Company Name] was formed by [Founder Name], [Founder Name] and [Founder Name] to meet these specific office space needs.
[Founder Name] and [Founder Name], licensed commercial real estate brokers, began to hear the same questions repeatedly from their corporate clients during this past year: Should we take a 5-year lease on office space in a building? Should we take the risk of buying land and building our offices? Do any of our employees need an isolated workspace? Will groups or teams collaborate frequently on various projects? Will projects be analyzed by individuals or research and development teams? Answers to these questions have highlighted the critical need for the plan and leasing program we’ve developed: flexible, comfortable and reliable coworking space for everyone.
The changing nature of our economy today calls for companies to consider the use of assets wisely as they determine the type of office building or workspace that best suits their needs. One of the largest overhead costs is that of office space, particularly when land must be purchased and a building raised. The clients of [Company Name] recognize their assets can be put to better use in other areas, such as innovation, technology and company growth overall. With this understanding, [Company Name] has been recently established as the new leader of coworking spaces that actually work.
[Company Name]’s History
The history of [Company Name] began informally long before the company was actually formed. The founders of the company, [Founder Name, Founder Name and Founder Name] noticed about ten years ago that commercial real estate clients began to question the wisdom of buying land and building offices for employees. They began to question more recently about the availability of coworking space for their employees. This line of questioning became the dominant request of all clients. Ten months ago, [Company Name] was formed as a C corporation to provide the answers.
[Company Name]’s Products/Services
[Company Name] is engaged in proactively finding the best employee coworking spaces available. This is our primary service. From there, [Founder Name] begins the escrow or leasing process and the final contracts are signed, typically within one month.
[Founder Name] and [Founder Name] then determine the best layout, design and style for the build out of the property and oversee the implementation of the coworking plan. Within a few short months, the employees of clients are situated comfortably in their new coworking space.
The combined elements offered by [Company Name] include:
- Superior property acquisition or leasehold
- Accurate escrow and documentation processes
- Proper space and environment designs
- Build out of all spaces, including amenities
- Timely execution of the plan according to client needs
All of the above services and products contribute to the ongoing growth and success of [Company Name].
III. Industry Analysis
The evolution of the coworking space concept has grown exponentially over the past ten years. Over the next five years, the CAGR reports growth in the coworking space industry will be at 17.5%. Several factors will contribute to this growth, as industry reports suggest:
- Higher costs associated with land acquisition and building
- Higher costs for individual office build-outs
- Higher costs for building materials overall
- Increased demand for “team or group community spaces”
- Increased purpose in resource “sustainability”
- Increased goal to minimize expenditures across the board
At the same time, as noted by [Company Name], the coworking space will need to innovate more spatial designs and layouts for teams or groups that require collaboration. The team or group concept is now dominating the business world and it is anticipated that it will continue to do so for many years to come.
IV. Customer Analysis
Demographic Profile of Target Market
[Company Name] is initially serving regional clients in the area within one hundred miles of the city location. However, [Founder Name, Founder Name, and Founder Name] see the vast potential in creating a profitable franchise opportunity to be applied anywhere in the US. [Company Name] sees a long-term strategy in this offering to come.
[Company Name] serves executives, business owners, real estate brokers and investors, who are seeking to adapt current properties or invest in new ones that offer coworking spaces. The largest market is found in investors, who see the potential for profit:
- Current global demographics suggest 24M coworking space opportunities by 2024, which translates into a need for properties and those who invest in them.
- Because of the high rate of growth in the coworking space arena, the need for investments and land acquisitions will continue to build in the foreseeable future.
Future franchising opportunities may include investments that begin at [Company Name] in the land acquisition stage and continue through to additional elements of building, thus adding another layer of profitability to franchising.
Customer Segmentation
Clients of [Company Name] include primary and secondary targets:
Primary Client Base:
- Business owners
- Investors
- Corporate executives
Secondary Client Base:
- Commercial real estate brokers
- Commercial real estate developers
- Commercial real estate builders
- Coworking space franchisees
V. Competitive Analysis
Direct & Indirect Competitors
King & Hartfield Grouop – direct competitors
Although considered a direct competitor sharing in a similar business, King & Hartfield does not design coworking spaces. All models or build-out plans are purchased from a repository held by furnishing companies that create designs for coworking spaces. There are 11-12 plans from which clients must choose in order for King & Hartfield to provide build outs and other processes. [Company Name] creates each build out plan and design on a custom basis for our clients.
Clarkson Coworking Connections – indirect competitors
Clarkson provides their lists of available coworking personnel with jobs that are situated in coworking spaces. This is done in an attempt to place suitable personnel in coworking situations that may be familiar, albeit uncomfortable or noisy.
Moss & Associates – direct competitors
This company has been in existence for 5 years and has created a short list of successful coworking space build outs. The company does not design or build out space for more than 10 people, working from the platform that too many people in community spaces are less beneficial overall than those that may house only 5 or 10 people. Given this limit, [Company Name] is positioned to succeed in the larger projects requiring more accommodations and, thus, larger revenues and gains.
Competitive Advantage
[Company Name] holds several compelling advantages over competitors, listed as follows:
- A decade of experience in commercial real estate by [Founder Name], [Founder Name] and [Founder Name] adds a unique, definable value to [Company Name]. Having sold over 36M in land and properties, the founders are fully experienced in buying and leasing of commercial properties.
- The scope and purpose of each client’s plan is another competitive advantage for [Company Name]. Each coworking space is custom-designed, measured for space allowances, fit with furnishings and brought through to completion on time. No other coworking space business can make this claim.
- The founders of [Company Name] are building today on a long-term strategy for tomorrow: franchising the current design-and-build model throughout the US by 2025.
VI. Marketing Plan
The [Company Name] Brand
[Company Name] displays a motto, “Coworking that Works,” which expresses the brand strategy for the company. Many of the coworking spaces that have been built do not offer a comfortable, noise-free environment; [Company Name] does.
Each customized plan for our clients is designed for comfortable, reliable and noise-reduction partitions. Included in each plan are community spaces for collaboration-in-comfort, another pivotal point in our brand strategy overall.
Promotions Strategy
[Company Name] targets all real estate brokers, investors, corporate executives and owners within the 100-mile radius of our location. The use of several mediums is involved on an on-going basis because our primary customer segments are differentiated: some traditional, some stuck on social media, others uninterested unless a direct mail piece is delivered. For these reasons, [Company Name] uses every resource to build interest and promote the company:
Social Media
[Company Name] currently buys monthly media spots and call-outs; as business grows, this effort will increase. The emphasis will be on the experience of the founders, the unique nature of the company processes, and the availability of speed and customization for clients.
Public Relations
[Company Name] uses the services of Carmichael Public Relations to put out quarterly press releases and garner blog and press spots for the founders. Social Media marketing is included on a case-by-case basis, depending on the project involved.
Website
Although most clients review [Company Name] by Google results, this company does maintain an interactive website with videos that demonstrates our abilities in designing, building, furnishing and customizing coworking spaces for our clients.
National and International Conferences
The National Board of Commercial Real Estate Brokers holds two conferences yearly. The founders of [Company Name] are pursuing speaking opportunities at both.
Investor Dinners
[Company Name] invites 10-12 investors to attend gourmet dinners with others in the community and the founders of our company to highlight our focus on quality and customization for coworking spaces. This results in new and strengthened relationships that result in investments in [Company Name].
Corporate Owners & Executives Tours
From time to time, as determined by the founders,the [Company Name] will host a tour of featured coworking spaces that are known for quality, design and beauty. These tours will be at the expense of [Company Name], however they result in high-end sales and repeat business with our primary clients.
Coworking Space Trade Shows
[Company Name] has participated in one major US trade show and will participate in the next annual trade show again. This puts [Company Name] into the industry headlights and allows the founders to highlight their successes and unique models for success. Within the next few years, franchise opportunities will be offered at the trade shows, as well.
Pricing Strategy
[Company Name] wasn’t founded to be a bottom-of-the-barrel coworking space facilitator, but a company that listens and acts at the direction of our clients. Each project is customized and profitability is secured by the land or building acquisition process, number of employees, spatial needs, environment qualifiers, decor and furnishing choices. The desires of our clients and their budgets are set prior to the inception of any project.
VII. Operations Plan
Functional Roles
Although already seeing successes, [Company Name] needs to fill additional roles within [Company Name]. Filling these roles will assist in the short-term and long-term goals of our company:
Administrative Functions
- Administrative Director
Sales & Marketing Functions
- Commercial real estate brokers (2)
Milestones
The following are a series of steps that lead to our vision of long-term success. [Company Name] expects to achieve the following milestones in the following [xyz] months:
| Date | Milestone |
|---|---|
| [Date 1] | Finalize lease agreement |
| [Date 2] | Design and build out [Company Name] |
| [Date 3] | Hire and train initial staff |
| [Date 4] | Kickoff of promotional campaign |
| [Date 5] | Launch [Company Name] |
| [Date 6] | Reach break-even |
VIII. Management Team
Management Team Members
[Company Name] is registered as a C Corporation with the founders, [Founder’s Name], [Founder’s Name] and [Founder’s Name] as shareholders. [Founder’s Name] holds 51% of the private stock, [Founder’s Name] holds 31% of the private stock, and [Founder’s Name] holds 18% of the private stock.
[Founder’s Name] brings over ten years of commercial real estate knowledge and experience to the role of President and CEO of [Company Name]. His role is to plan and execute the long-term strategy of franchising and to encourage investors in the company by selling limited shares of stock in the franchising model, as agreed upon. He holds a Master’s Degree in Business Administration from Purdue University.
[Founder’s Name], Director of Sales and Marketing, is also a commercial real estate broker, and has a wealth of knowledge in coworking spaces, as her former brokerage concentrated on the sale of property for the building of coworking spaces. She brings managerial experience and oversight to [Company Name]. She holds a platinum key from Real Estate Brokers of America and a Bachelor’s Degree in Business Administration.
[Founder’s Name], the Director of Finance, is a real estate escrow officer, with an in-depth knowledge and experience in this role and brings years of association with him into [Company Name] as a result of his many contacts. He graduated with a Bachelor’s Degree in Accounting from Northwestern University.
Hiring Plan
A major factor in seeking funding is that of increasing sales and marketing personnel.
The current hiring plan includes hiring two experienced commercial real estate brokers to add to our team at [Company Name]. This will accelerate growth further and faster in proportion with our short-term and long-term goals.
Additionally, one Administrative Director will be hired within the next six weeks to oversee the current office and administrative personnel. The Administrative Director will be under the supervision of [Founder’s Name], the accountant and Director of Finance.
IX. Financial Plan
Revenue and Cost Drivers
Revenue for [Company Name] will exceed expenses in approximately six months if the current marketing and sales plan is placed into motion.
Major sources of revenue include:
- Profit generated from brokerage of properties
- Profit generated from customized plans for coworking spaces
- Profit generated from furnishings and decor
- Profit generated from additional build out and amenities as requested
Major Cost Drivers include:
- Costs associated with brokerage of properties
- Costs associated with design plans and coworking space needs
- Costs associated with 3D printing and CAD extensions
- Costs associated with furnishing, decor and additional amenities
- Costs associated with overhead; capital expenditures
Capital Requirements and Use of Funds
[Company Name] is seeking $280,000 in funding to add personnel to the administrative and sales team within the next six weeks. The capital expenditures will amount to $180,000 in funding.
The additional funding request will be allocated to an oversized 3D printer with multiple properties for design printing to create prototypes. In addition, CAD programs to extend the abilities of our designers are needed. Together these expenditures will amount to $100,000.
Key Assumptions
The following table reflects the key revenue and cost assumptions made in the financial model:
| Number of customers per day | Per location |
|---|---|
| Year 1 | 20 |
| Year 2 | 40 |
| Year 3 | 60 |
| Year 4 | 80 |
| Year 5 | 100 |
5 Year Annual Income Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| Revenues | ||||||
| Product/Service A | $151,200 | $333,396 | $367,569 | $405,245 | $446,783 | |
| Product/Service B | $100,800 | $222,264 | $245,046 | $270,163 | $297,855 | |
| Total Revenues | $252,000 | $555,660 | $612,615 | $675,408 | $744,638 | |
| Expenses & Costs | ||||||
| Cost of goods sold | $57,960 | $122,245 | $122,523 | $128,328 | $134,035 | |
| Lease | $60,000 | $61,500 | $63,038 | $64,613 | $66,229 | |
| Marketing | $20,000 | $25,000 | $25,000 | $25,000 | $25,000 | |
| Salaries | $133,890 | $204,030 | $224,943 | $236,190 | $248,000 | |
| Other Expenses | $3,500 | $4,000 | $4,500 | $5,000 | $5,500 | |
| Total Expenses & Costs | $271,850 | $412,775 | $435,504 | $454,131 | $473,263 | |
| EBITDA | ($19,850) | $142,885 | $177,112 | $221,277 | $271,374 | |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 | |
| EBIT | ($56,810) | $105,925 | $140,152 | $184,317 | $234,414 | |
| Interest | $23,621 | $20,668 | $17,716 | $14,763 | $11,810 | |
| PRETAX INCOME | ($80,431) | $85,257 | $122,436 | $169,554 | $222,604 | |
| Net Operating Loss | ($80,431) | ($80,431) | $0 | $0 | $0 | |
| Income Tax Expense | $0 | $1,689 | $42,853 | $59,344 | $77,911 | |
| NET INCOME | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 | |
| Net Profit Margin (%) | - | 15.00% | 13.00% | 16.30% | 19.40% |
5 Year Annual Balance Sheet
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| ASSETS | ||||||
| Cash | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 | |
| Accounts receivable | $0 | $0 | $0 | $0 | $0 | |
| Inventory | $21,000 | $23,153 | $25,526 | $28,142 | $31,027 | |
| Total Current Assets | $37,710 | $113,340 | $184,482 | $286,712 | $423,416 | |
| Fixed assets | $246,450 | $246,450 | $246,450 | $246,450 | $246,450 | |
| Depreciation | $36,960 | $73,920 | $110,880 | $147,840 | $184,800 | |
| Net fixed assets | $209,490 | $172,530 | $135,570 | $98,610 | $61,650 | |
| TOTAL ASSETS | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 | |
| LIABILITIES & EQUITY | ||||||
| Debt | $317,971 | $272,546 | $227,122 | $181,698 | $136,273 | |
| Accounts payable | $9,660 | $10,187 | $10,210 | $10,694 | $11,170 | |
| Total Liabilities | $327,631 | $282,733 | $237,332 | $192,391 | $147,443 | |
| Share Capital | $0 | $0 | $0 | $0 | $0 | |
| Retained earnings | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| Total Equity | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| TOTAL LIABILITIES & EQUITY | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 |
5 Year Annual Cash Flow Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| CASH FLOW FROM OPERATIONS | |||||
| Net Income (Loss) | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 |
| Change in working capital | ($11,340) | ($1,625) | ($2,350) | ($2,133) | ($2,409) |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 |
| Net Cash Flow from Operations | ($54,811) | $118,902 | $114,193 | $145,037 | $179,244 |
| CASH FLOW FROM INVESTMENTS | |||||
| Investment | ($246,450) | $0 | $0 | $0 | $0 |
| Net Cash Flow from Investments | ($246,450) | $0 | $0 | $0 | $0 |
| CASH FLOW FROM FINANCING | |||||
| Cash from equity | $0 | $0 | $0 | $0 | $0 |
| Cash from debt | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| Net Cash Flow from Financing | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| SUMMARY | |||||
| Net Cash Flow | $16,710 | $73,478 | $68,769 | $99,613 | $133,819 |
| Cash at Beginning of Period | $0 | $16,710 | $90,188 | $158,957 | $258,570 |
| Cash at End of Period | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 |
