How to Fund Your New Coworking Space
Funding any business can be complicated and overwhelming if you’ve never done it before. But just like being a business owner, you can learn the things you need to be successful when it comes to funding and financing as well. Much of what holds people back from pursuing funding options is that they discount their eligibility ahead of time - a common problem amongst entrepreneurs who want to chase a dream, but lack the confidence to go after the thing they want. Rather than wonder if you’d quality for a loan or funding to help you get start with a coworking space, the best thing to do is just apply. Here are some tips on how to get your new coworking space funded.
If you are thinking about starting a coworking space, it can be a lot of fun and every space is uniquely different. Even if two spaces are similar, the edge, culture and location of your startup space will separate it from the pack. This means that while there may be a lot of startup spaces or coworking spaces popping up, you have an advantage based on the clientele you’ll cater to, attract, and retain. There is something for everyone at coworking spaces, but everyone who seeks to work at one of these great spots eventually finds one that is right for them. Your people are out there, so don’t worry.
As you prepare your application for funding or financing, ask yourself why your community needs a coworking space. Are there are a lot of solo entrepreneurs who don’t want to pay full price for a rental suite? Are there new startups in the area that are looking for a home base that is flexible and affordable? Are your community members looking to put down roots or will they be in and out? The answers to these questions help you form the basis for your justification for needing the funding to support the space. But there are other options besides getting a loan.
One option is to sell rental space ahead of time. If you can gather enough interested business owners to buy into a space before you actually have a space, you can put a deposit on the rental agreement for the office space before you actually have all the money for renting it. This is risky, but it can mean that you don’t need to finance your business venture out of pocket and it can buy you some time and get a sense of how many people are really ready to commit to such a space before you go ahead and build one. Just like condo sales, much of the space can be rented before there is even a space to see!
Another way to avoid having to get a loan or financing for your startup space is to rent a large single office and rent desks out. This way, you only have to pay for the cost of the one office space and can divide it up amongst several consultants, freelancers, solo entrepreneurs, online retailers, and more! The desks can be rented like a timeshare: one week for this person, and another week for another person. This method makes it easy to keep butts in seats throughout the year, and ensures that you can always afford your own rent even if you don’t have business owners in the space. Any months where you have renters means money in your pocket and that money can be reinvested back into the business to help you stabilize your business model and get a bigger space over time.
Whatever your reason for wanting to start a coworking space, just know that there is a real need for this kind of collaborative working environment. Everyone from work-at-home moms to online retail empires are looking for affordable space outside of their regular diggs to focus on growing their businesses. There’s no reason not to go for it!