Great questions, Cameron. First off, we're located in the downtown area of one of the top 10 largest cities in the US. I'm glad you asked the question, because our business model is based on our location. Location is directly correlated to profitability, but in my mind, only in terms of how the business model needs to adjust for location. This takes into account local economic climate, but also local cultural needs.
Sprawling cities have made coworking successful. I'd hope that Matthew Wettergreen from Caroline Collective chimes in about how they've dealt with the sprawl of Houston. But more about us: > Do you break even? The first office we opened in August 2007 was operationally break even in ~7 months. When we grew into our new office in May of 2009, we operated at a loss for 4.5 months before achieving monthly breakeven. If you go beyond break even, is it by much? At our peak of utilization at our old office, IndyHall was generating 100%+ of its monthly operating expenses in profit. So if it cost us $3500/month to run the space, we brought in $7000/month to revenue. Our new space has more than double the operating costs (nearly triple, in fact), but we haven't had to adjust our rates. We achieved this by being thoughtful in managing our expenses, and keeping our costs simple and measurable. All profit for the ~1 year of profitability was put back into paying back debt (which took ~12 months) and finding ways to improve the space (capital improvements, other investments). > Is there anyone who is experiencing growth even with the recession? We grew from 1800 sq ft to 4500 sq ft, and from ~45 paying members (14 full time) to 90+ paying members (26 full time) between March and today. Our 2nd biggest growth rate was in January of 2009, where our full time membership nearly doubled. This pushed us into considering new space. What are your membership plans? http://indyhall.org/membership/ > Does being profitable have to do with charging for extra services? We don't charge for anything other than membership. We occasionally make a few bucks from hosting an event, but that's barely enough to register. > Most of all, is this a business that one should approach with a mind frame > of making money or with one of > community, or both? > I think the answer is that the frame of mind we've operated under is triple bottom line: *Profit* - profit, for us, is one half of our path to sustainability. If the business side of IndyHall is not profitable, we don't have resources to invest in our community and we can't continue to grow to fulfill our mission. *People* - investing in our community is the other half. *People leads to profit. Profit doesn't necessarily lead to people.*Involving the community in the operations of the business has been a part of our secret sauce. *Place* - investing in our city. This is at the core of our mission of *making Philadelphia* *a better place for people who want to make a living doing something they love.* For the last 2+ years, our model has worked *for us* on at least three fronts: 1) we've been profitable, twice. 2) we've grown to ~100 simultaneously paying members across all levels 3) we've been recognized by individuals, businesses, and representatives of the city that our efforts and our community are a significant contributor to the growth and visibility of a community in a city that wasn't otherwise known for technology, creative, or independent workers. -Alex -- ----- -- ----- Alex Hillman im always developing something digital: [email protected] helpful: www.unstick.me visual: www.dangerouslyawesome.com local: www.indyhall.org On Wed, Oct 28, 2009 at 3:31 PM, Cameron <[email protected]> wrote: > > Hi all! > > First off, this is a fabulous group, and I love the coworking idea! > > I'm an MBA student and I need to choose a topic to write a > profitability/feasibility analysis on for a class, and am interested > in writing about this concept, but wondering about the profitability. > > I've researched a lot, and it seems like people have different > answers... a lot say its not profitable since its the community aspect > that's appealing, while others say it can be profitable if you do it > right (what IS considered right is the question?). > > I don't want to start a repetitive post, but I would love to hear from > those of you who have experience with running/owning a coworking spot. > Do you break even? If you go beyond break even, is it by much? Is > there anyone who is experiencing growth even with the recession? What > are your membership plans? Does being profitable have to do with > charging for extra services? Most of all, is this a business that one > should approach with a mind frame of making money or with one of > community, or both? > > Don't worry about answering EVERY question... I'm just trying to be as > through as I can be in my research! I would be happy to post my > findings once it's all done! :) > > Any help would be awesome! > > Thanks in advance! > > Cam :) > > > > > > > --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups "Coworking" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [email protected] For more options, visit this group at http://groups.google.com/group/coworking?hl=en -~----------~----~----~----~------~----~------~--~---
