There are a lot of different reasons to open a coworking space, some are closer to business considerations while others are more on an idea, on the way you see the world. No matter why you decide to open a coworking space, the key to its survival is profit.
We are not only talking about money when we talk about profit. Without building a community, a good product, and using marketing skills to bring clients in you will not be able to thrive, but profit is the one thing that will mark your future. If there’s no profit you will eventually run out of money and will have to shut down. No more business, no more dream, no more coworkers…
It is not only a question of survival. Having more money that you spend means being able to grow, to hire more people, to give better service, to add even more value to the coworkers. It can be something as simple as buying more professional routers or something as big as getting a new building to host your community. On top of it, if you see your money burning away and no improvement coming in the short term, your mood will not be the best and your grumpiness will end up spilling over to your coworkers, and neither them nor you want that.
The importance of profit does not have anything to do with the legal entity you have chosen for your space. Non-profit organizations do have profit, they just don’t distribute it among shareholders. Having profit for one of this organizations means that they can do even more good with it in the future, or save it for the bad times.
In every coworking conference and in a grand majority of conversations I have with people that are considering opening a coworking space I always get the same question over and over: can coworking spaces make money? The answer is yes, a big yes. There’s no difference with the running of any other business, you have to reach a point where you have income than expenses. When the curve goes up is the start of happy times (specially when you arrive to make up for your initial investment.)
Having all this questions have pushed me to organize guerrilla finance workshops for coworking spaces in conferences, and that’s what I will do at GCUC. The name may be misleading, we don’t talk much finance, we focus more on understanding the main sources of revenue and expenses, and how to do the basic math to figure out if your space can ever be profitable. No special skills are required. Just bring an inquiring mind and be ready to learn and to share. I hope it is an eye opener for some, as it has been in the past, and that others with more experience also participate to share their knowledge and experience.
Being an entrepreneur is not easy, and how you think your company is going to perform usually does not match reality, but one thing that you definitely have to do is to understand if you can ever make it to the point where you will be able to make money with your space. Don’t get carried away by the spreadsheet. You have to understand if you can make money (have a profit) with your space and what is the maximum you could make with your chosen sources of revenue.
Looking forward to meet you all in Austin.
Ramon Suarez is the founder of the Betagroup Coworking space in Brussels. In two years he has grown from 0 to over 180 members, with an active and very cooperative community of coworkers. Ramon will take advantage of this year’s Global Coworking Conference Unconference to visit coworking spaces in the areas of San Francisco, Austin and NY. For a full view of Ramon’s hectic professional life, head to his LinkedIn profile. You can also find the Betagroup Coworking space (AKA Betacowork) in twitter @betacowork and Facebook.