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How we perform coworking feasibility studies

Is my city ready for (more) coworking?

This is a common question I’ve been asked during the last few months as I have been working with a variety of teams on coworking feasibility studies for property developers, economic development groups, and entrepreneurs that are interested in joining the movement. It’s been a fun and interesting experience as I get to put back on my market researcher cap, and take an academic approach to discovering coworking viability in a market.

So what is a feasibility study?

A feasibility study is often performed because a group wants to learn more about an industry, what makes it successful, the competitive market, and gain an understanding of the business model. I learned that property developers use feasibility studies when planning new apartment buildings because it’s a fairly predictable industry based on demographics, population trends, and the local landscape of other apartment buildings. Economic development groups do feasibility studies because they often want to try something new for their town and want to look to see if there town’s SWOT is comparable to other towns that have failed or succeeded using a similar approach.
Coworking feasibility studies are basically asking if a certain location fits a mold of coworking that already exists, do the expense and business models work, or can coworking be an appropriate fit for a town’s culture. If the answer to any of these question is YES, then we start to build the community as the next phase.

Note: The next phase after the yes shouldn’t be going out and leasing the space or building something new. The build-it-and-they-will-come philosophy is still setting someone up for likely failure.

How we do a feasibility study done for coworking:

  • Understanding and getting to know the people
    • What are the people like?
      • Age
      • Population
      • Income
      • Job types
      • Are they likely to be coworkers compared to national trends?
      • Do they know about coworking and have they tried coworking before?
      • Do they work remotely?
      • Are they entrepreneurial?
      • Is in the culture to work together?
      • ….lots more with personal observation and interview
    • What is the urban landscape?
      • Commute times
      • Density of the city
      • Household makeup
      • Economy foundations
      • Mode of transportation
  • What is the coworking scene like?
    • How many spaces operate?
    • How big is each space?
    • What are the vibes of the spaces like?
    • How are the current coworking spaces doing
    • Do the spaces work together?
  • Business modeling
    • Rental rates
    • Price modeling
    • Labor and operating expenses
    • Forecasts for up to five years

It gets more detailed than this but this is a basic outline and we have figured out some indicators that correlate to a town’s culture and potential openness to the coworking model. The whole goal is help groups understand their city, the coworking environment, and answer whether or not this is an opportune time to start building a community and putting money behind it.  
As we get better at performing the feasibility studies for coworking, it will help us identify places that are ripe for coworking, reduce the risk for entrepreneurs or cities to start a coworking space, and help the movement expand into more towns and neighborhoods. A feasibility study is only the first step before building a community and building out a space.

There is another way proven way without a feasibility studies. If are an entrepreneurial individual just wanting to open up a coworking space in your city then just start talking to people, hosting jellies, and find your tribe. Just start building the community and then worry about the space.