Opening a Coworking Costs $94,000 to $126,500

Are you looking to start your own coworking business? As part of your business plan, make sure to consider all the startup and operating costs to start and run a coworking space.

On average, it costs $94,000 to $126,500 to start a 3,000 square foot coworking business with 100 desks. In addition, you should budget for $32,000 – $36,500 per month to run the business.

From rental costs to equipment and salary expenses, in this article we’ll go through all the different costs you will need to incur to start your own co-working business. Finally we’ll also look at the break-even point for a typical coworking. Let’s dive in!

For more information on coworking space businesses, make sure to read our guides below:
How to Write a Coworking Business Plan: Complete Guide
How To Open a Coworking In 10 Steps
6 Proven Strategies To Increase Your Coworking Revenues

What are the Startup Costs for a Coworking?

Before launch, there are a number of startup costs owners of coworking spaces must take into account. Logically, the cost to start a coworking business depends on the location and size of the facilities as well as the amenities themselves (restaurant, coffee bar, game room, etc.).

On average, it costs $94,000 to $126,500 to start a 3,000 square foot coworking business with 100 desks.

Startup costAmount
Equipment & office furniture$65,000 (100 desks, 20 workstations)
Building refurbishment$20,000 – $50,000
Connectivity setup$500 – $1,000
License$500
Legal fees$2,000 – $4,000
Insurance$6,000 (per year)
Total$94,000 – $126,500

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Let’s see now in detail what is included in this calculation:

Coworking equipment & office furniture costs

Depending on your plan, coworking spaces will need a certain number of office desks, chairs, cabinets, and other furniture.

For example, a decent office desk and chair can cost between $200 and $800 for private offices, while the co-shared working space furniture costs between $100 and $500 depending on the space available. 

Let’s assume you have a maximum capacity of 100 members at any time (3,000 square foot coworking space) and you need to purchase 100 desks and chairs at $400 a piece as well as 20 workstations for $600, the total cost including some shared space furniture ($15,000) represents $65,000 total.

Coworking building refurbishment costs

You will likely need to do some refurbishing after you started to rent (or purchase) the office space. At a minimum, you are looking at painting to regulatory compliance works (electricity, evacuation norms, etc.). This can cost a minimum of $20,000.

Yet, if you decide to build, or re-build, areas like coffee, restaurant, bathrooms or meeting rooms the cost can go up significantly.

Assuming you are only refurbishing the space to make it compliant and tidier (painting, changin doors, heating, AC, etc.), you will likely have to pay $20,000 to $50,000 total.

Business licensing and permits

Operating a co-working office may requires a particular set of business licenses and permits. Make sure to check about the licensing requirements in your state by visiting SBA’s reference to state licenses and permits.

Legal fees

Opening up a co-working space comes with upfront legal costs, from drafting the rental agreement with the owner (if you aren’t the owner of the building), the membership contracts, etc.

Therefore, it is not unusual for co-working space startups to incur up anywhere from $2,000 to $4,000 in upfront legal fees. 

Insurance costs

Coworking spaces need to have a proper insurance in place before they do business. 

This includes the standard General Liability Insurance which shall protect you from property damage but also any medical costs that may arise if someone gets hurt in your premises. The average cost for a General Liability insurance for a coworking space is around $500 a month.

What are the Operating Costs to Run a Coworking?

In addition to the startup costs discussed above, there are a number of expenses you need to budget for to run a coworking business the first few months.

On average, it costs $32,000 – $36,500 to run a 3,000 SF, 100 desks coworking space.

Please note these numbers are only for illustrative purpose and will depend on the amenities, the location and services of your coworking business.

Operating costsAmount (per month)
Rent$10,000
Salaries$10,000
Utility bills$1,000 – $2,000
Marketing & advertising$3,000 – $6,000
Cleaning services$5,000 – $7,500
Bookkeeping, legal & admin.$1,000
Total$32,000 – $36,500

Get a rock-solid business plan with the Coworking financial model

  • 5-year financial plan already built
  • 20+ charts for your business plan
  • Video tutorial 🎥
  • 5,900+ downloads

Here is the detail of all the operating costs included in this calculation:

Coworking rental costs

Premises is the most substantial fixed cost of owning and operating a co-working space. Like a residential or a commercial property, your initial cost depends on the location and the size of the area. So if you plan to rent the premises, you will want to look at the average commercial rent price per square foot.

Assuming you are renting out a 3,000 SF office space in a prime location of Portland, you might be paying in average $40 per SF. This represent a total rental cost of approximately $10,000 per month.

Coworking staff costs

Another considerable expense for coworking spaces is of course salaries for your employees. The total cost will depend on the number of full-time and the part-time staff you need. As an example, the average WeWork Community Manager earns an estimated $72,945 annually.

For instance, you might need 2 full time employees including yourself for a 100 members coworking space. Assuming $60k salary each per year as a start, salaries would cost $10,000 per month.

Utility bills

Similar to salaries, utility bills will recur each month. The bills include the cost of water, electricity, and internet. Logically, the larger the coworking space, the higher the cost.

In average, expect to spend $1,000 to $2,000 for a 100 members coworking space.

Coworking marketing costs

You need to ensure proper marketing to attract reliable customers. Therefore, make sure you set aside a marketing and advertising budget. The total cost will depend on the medium used and the target audience.

Typically, marketing and paid advertising will cost more in the first 6 months of operation. Indeed, as you’re opening up the business, you’ll need a significant budget to promote your coworking office before you can rely on organic growth (word-of-mouth).

Cleaning services

You have to keep the offices clean to attract and retain customers. The janitorial services will depend on the office space and the additional services like lawn maintenance and kitchen. 

Assuming you hire an outsourcing company for cleaning that comes every day for 4-5 hours, you could well look at $5,000 to $7,500 a month alone just for cleaning services.

Bookkeeping fees

Like all other businesses, coworking space business has to ensure proper bookkeeping. This means using a bookkeeping software (Quickbooks for example) as well as an accountant. Typically, you should expect to set aside $250 to $500 a month for bookkeeping.

Insurance

Coworking spaces need to have a proper insurance in place before they do business. 

This includes the standard General Liability Insurance which shall protect you from property damage but also any medical costs that may arise if someone gets hurt in your premises. The average cost for a General Liability insurance for a coworking space is around $500 a month.

How To Find Your Breakeven Point?

Now that we have estimated startup and operating costs for an illustrative 100 desks coworking business, you might wonder what is the breakeven point.

As per SBA’s own definition, the break-even point is the point at which total costs and revenue are equal. In other words, you have reached the break-even point when you make enough money to repay your costs.

Using our example earlier, you reach the break-even point when you generate at least $32,250 to $36,500 in revenues per month. The profits beyond that will be used to repay the initial startup costs.

In other words, the earlier the break-even point, the earlier you can repay your investment (to the bank, yourself or an investor) and the earlier you can finally make profits!

Using the same example above, and assuming you charge in average $350 per month per member, you should reach the break-even point around 90 members per month ($32,250 revenue).

In this specific example, 90 seems pretty close to your maximum member capacity (100 members) which suggests you might be operating at a loss (if you don’t manage to reach 90 members). In order for you to turn a profit, you can look either increase your prices (from $350 to $400 for example) or have a look at these strategies to increase your revenue.