How to expand from a coworking space to a coworking network

How to expand from a coworking space to a coworking network

Answering this question is relatively easy. However, carrying out the strategies and tasks required to move from a space to a network is a long and time consuming process that is much easier said than done.

Where do we start? First, I think there is one question you should ask yourself: has creating a network of spaces always been in your plans? I think answering this question is essential because it speaks not only to your ambitions but is often intimately related to how you have set up your space and how you have documented it (or how you have not). If it has never been in your plans don't worry, I can assure you that some of the major players in some markets never thought of having more than a single location or even expanding that location beyond its initial dimensions.

Expansion starts long before opening a new space

If I could choose what you would take away from this article, I would ask you to remember this phrase: Before you expand, tidy up your kitchen. i.e. Before you start creating more spaces make sure you have defined a way of working, designed protocols and documented how things are done in your space.

When you only have one space you see 100% of what goes on in it: your whole team is concentrated in a single physical space, information flows more easily and problems tend to be solved organically. Especially if you were not thinking of expanding beyond this space, it is very likely that processes have not been extensively documented. From the moment you start thinking about expansion (if you have not done so before) start documenting all processes and creating the protocols that are necessary to make your space work properly.

Think about all processes such as (but not limited to):

  • Sales

  • Registration and onboarding

  • Terminations

  • Maintenance of the space/incidents

  • Marketing

  • Invoicing

  • Community management

  • Event management

A good way to start doing this is to make a list of all the things you pass on to someone else when you go on holiday or those things that even when you are on holiday you take care of by yourself.

Location is vital when considering how to grow your coworking network. Photo by @ravi_roshan_inc via Unsplash

Where to grow?

A common question is: Do I grow my coworking space in the same location or in a new location? The answer is clear: always grow in the same location unless there is a good reason not to. Growing in an existing location allows you to optimise costs, personnel, and greatly simplifies operations. If you can grow sufficiently it will present challenges that are not the same as having multiple locations but it will certainly pave the way for you to expand.

The reasons for not growing in the same location could be:

  • The area does not have enough critical mass for the space to be insufficient demand.

  • The new space has a problem that the current space does not have and/or does not allow you to apply economies of scale or optimise staffing.

  • The lease on the original space is very close to expiring (I would try to negotiate an extension with the property, especially if the new space cannot operate on its own without modifications).

If you have already reached the limits of your current location and are planning a second location, the usual strategy is to opt for another location in the same city but in a different neighbourhood, or at least far enough away from the first location so that the locations do not compete with each other. It is clear that in some markets this is not possible or not advisable because the market is not big enough (in the case of a very small population or with a very small demand). In this case, you will have no choice but to jump to a new city or town. 

Opening in a new market poses similar challenges as opening your first space since your brand will most likely be unknown in that market, which brings with it a raft of challenges very similar to the ones you are already aware of. The distance, market and cultural differences, etc. lead me to recommend you postpone this step (opening a space in a different market) at least until opening your third location: opening the second one will be challenging enough to add to this the challenge of doing it in another market you don't know. Delaying this leap to your third location (or even later) will ensure that the process of opening a new space is standardised and that protocols and procedures are mature enough to meet the challenges of operating in a new market. On the other hand, doing this will also allow you to be sure, when something is not working in the new location, that it’s because of the aforementioned differences and not because your value proposition only works in the original location.

Study the options for growing your current space. This will be the most efficient and safest option. If it is not advisable to expand in this first location, look at alternative locations within your city: which ones have similar characteristics? Is there one that has more potential? How much should you vary the value proposition in that location to make it work in that area? If you need to make changes to your value proposition: will this take your brand in the right direction?

Considering your market is important when setting rates for your coworking space. Photo by Markus Spiske via Unsplash

Not all markets are created equal

The previous point leads me to suggest the following which may seem obvious to many people, but not to others.

Sometimes you create a coworking space, it works, and you decide to expand. If your second location is in the same city in a location with the same characteristics as the first one, it is possible that things work pretty much the same, that the clients have similar needs, etc.

When you open your second location you won’t even have to consider that things might work differently. We may think that we have our own way of doing things and that we simply offer a service in a certain way, but I think it would be a mistake not to want to understand each market, its differences and try to optimise our value proposition so that it works better in this particular location.

I am not suggesting that you sell your soul to the devil, it’s not about offering something that compromises your values. I simply believe that taking advantage of the flexibility of being an independent operator offers you the opportunity to adapt quickly to new situations and circumstances, giving you an edge over multinationals that apply more rigid policies. 

You may also think that differences in markets only occur when you are opening new locations in different cities, but never in the same one. This is not the case. You can find more bohemian neighbourhoods where coworking grew in its early days, where relationships tend to be more relaxed, less formal and maintenance is more lax or the finishes of the space more basic. If you move from that environment to a business district, I can assure you that things will not be the same, almost as if you moved to a different city or even country.

Understand a market before you enter it, study whether there are competitors in it or not. In fact, if there are none, what are the reasons for this? Do we know if there have been attempts to open up any such spaces and why it has not been created?

Opening new markets is not a bad thing, I just think that when starting a new project you should be aware of the challenges you are taking on, and try not to take on more challenges than you are able to handle simultaneously. These challenges will allow you to have a more global idea of the sector and will force you to evolve not only in the new locations but also in your established ones. This is a process that has led well-known operators to evolve their target audience and business model as they open new venues. How far you want to grow and evolve is your choice, but without a doubt, facing these challenges will transform your company.

Oh! A bonus tip for you will be: Don’t try to make your rates exactly the same. Let me be honest about this, as all of us have gone through this at some point. The space cost is an important factor when calculating the costs you have as an operator. I’m not advising you to create an artificial difference between spaces, but it's obvious to me you can’t charge the same for two different spaces in two different locations with vastly different prices per square meter: it just does not make sense. Clients will understand that too, I promise. Embrace the difference, make it count and create a “product” that makes sense with your brand and what the new location is offering.

Sharing knowledge amongst your team is important in developing a network of coworking spaces. Photo by @mapbox via Unsplash

Internal communication & collaborative culture

Having different spaces with different teams in charge of them offers you the opportunity to take all the spaces further than they would go on their own. On the one hand, there are trends that reach some areas before others, some profiles before others. On the other hand, the profiles of the staff in each space will be slightly different from those of their colleagues in other centres. Not taking advantage of this would be very foolish.

Internal communication when you have a single centre is relatively easy, when you expand it won’t be. Make sure you create the tools and the culture to keep the knowledge flowing between your team members. Also, be especially attentive to new needs that arise in the new location that you can turn into opportunities or services to offer in the original location. 

Rotating teams regularly between locations, holding global meetings to share problems and solutions are initiatives that can generate cohesion but will be of little use if you are not able to create a genuine atmosphere of trust and collaboration in which things simply flow and one team can consult with another in an organic and natural way. In this sense, it is important to pay attention to which members of the team are the stakeholders who receive the most questions from each business area. If you are able to detect who these stakeholders are it will be easy to involve them in the definition of protocols for these areas and raise the level of your services and efficiency by relying on the people who have the best performance in each area.

Leadership and team management

In the first location, the founder will most likely lead the space or in some cases, the founding team has no additional help. When the second space opens, who will lead it? Is there a second founder who can lead the new space? If you already have staff, are they trained and confident enough to work autonomously?

When the second space is opened, the original team is usually divided between the two spaces. This is made much easier if your team is multi-skilled and has been trained to work autonomously and lead new teams. If this is not the case, you will need to hire staff trained to carry out the new functions in these spaces. This is a good thing, as you can learn other ways of doing things if they have experience in the sector or in similar jobs, but on the other hand, it will probably involve higher costs, a period of adaptation and perhaps frustration for existing staff who see new people being brought in rather than internal promotion routes. If you choose to bring in external people I would recommend that you also start training existing staff to provide opportunities for those who are interested in career progression. Increasing the number of locations is one of the few progression options for staff to grow in the sector. If they feel that there are no opportunities within the company to grow they will leave.

Opening a second location is one of the most important, difficult and thrilling processes in a coworking company. Maybe I’m just being romantic about it but I think this is the critical moment when you are going to stress your value proposition, make your team grow and put to the test all of your previous experience in a new location. I hope you love it as much as I do because it truly is an exciting moment.

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