Three years ago, when I couldn’t stand working another day in my bedroom, I found desk space in my friend’s studio. At $100/month, it was an expense I couldn’t take lightly. I committed to this ‘experiment’ for three months.
Three years later, I’ve increased my income and productivity substantially, and gone from a sub-leaser in a three-desk studio to a co-leaser of a space that fits eight. With my two co-leasers, I’ve invested four figures in furniture, decoration, and a semi-private meeting room. Why did I go from sub-leaser to co-leaser? Here are my lessons learned from starting a co-working space.
Why level-up from desk-renter to desk-lord?
Our landlord invited us to. She offered to subsidize our rent for six months as we got ourselves together. We figured that was plenty of time to find other refugees from home offices and the café scene. Heck, maybe we’d even turn a small profit.
Building out the space, including our time, cost several thousand dollars. That semi-private meeting space took several more weekends than we were expecting. Fortunately, our illustrator friend Andy Lunday welcomed the opportunity to grace our walls with his art.
Should you start a co-working space?
Consider these questions first:
Are you willing to set up a separate business entity?
Can you afford the time to market the space?
What’s your ultimate goal?
As soon as the three co-leasers decided to take the opportunity, we should have set up a separate LLC (Limited Liability Company). If nothing else, it would have kept our accounting clean. Though we collect our sub-leasers’ rent in a separate bank account, that ‘income’ will make 2015 taxes more complicated and costly.
We were smart to define our agreement in writing. We specified what we were getting ourselves into, what we expected of one another, how we would make decisions, how we would deal with expenses and revenue, and what would happen if someone wanted to back out before the lease’s term came up. Even though it’s not a legal document, the exercise of writing it out helped us arrive at a common understanding.
We also composed an agreement for our tenants. It’s not so much a legal document as a framework of our expectations and our offering. Since signing, no one has had to reference the agreement to settle disputes. Maybe that’s because we try to offer space to fair-minded people. Maybe we’ve just been lucky.
When we first considered moving, we assumed that other freelancers would beat a path to our door.
Hope springs eternal.
We advertise on Craigslist, PivotDesk and with a sign in our front window. Though PivotDesk charges a 10% fee for the service, we’ve had more inquiries from Craigslist and the ‘desk space available’ sign.
Since we consciously decided to undercharge other co-working spaces -believing that would do the attracting for us- there’s little incentive to make a substantial effort finding sub-leasers.
Unless you want to make this a viable business, or you have extra space in your office that you’d like to rent out on the side, you’re probably better off leaving this to someone else.
If you just want to create, just create.
If you hope to attract prospective collaborators (developers, designers, videographers, writers, etc.), put your effort into networking. Build up those relationships. With time, you may have enough prospective partners to share a lease and space where you can focus on creating.
That said, if you’re looking for affordable co-working space in Portland’s Central Eastside Industrial Neighborhood, please email us at studio3 [at] zoomtopia [dot] com.
We may be what you’ve been looking for.