Saturday, February 25, 2012

The phone booth project

As Workantile’s membership has grown, one of the challenges we are facing is competition for semi-private places to make phone calls. Sometimes all the conference rooms, the designated phone room, and the other nooks and crannies of the space are filled with people on the phone. We kicked around a number of different scenarios to solve this, when my colleague Trek spotted an old-fashioned phone booth - sans pay phone - at a local bar. This seemed like a good solution, but how to build it?

One of our members, Phil Proefrock, is an architect and furniture designer, so we tapped him to help with this project. The solution we wanted was one that is easy to build for people who are not professional carpenters, inexpensive, and portable so it can moved around the space. We also wanted the design to be open source, so other coworking spaces with the same problem could benefit from it. Phil really sank his teeth into this project and is close to having a solid proposal. Read more on Phil’s blog.

Monday, February 6, 2012

What it costs to run a coworking space - pt. 2

In my previous post on what it costs to run a coworking space, the question came up about how many members do we need to break even. The answer to this is a bit complicated.

Workantile only has shared desks, we don’t have permanent desks and have no plans at this time to have any. This give us a lot of flexibility in how the space is used.

We have four membership levels:

Full member - $160/month gets you 24/7 access to the space, the ability to receive mail, the ability to host outside events, and the ability to reserve the conference rooms, not to mention the opportunity to hang out with awesome people and attend our equally awesome social events. There is an expectation that full members will contribute work for the good of the community, including cleaning, marketing, and other activities that increase the livability of the space and financial viability of the community.

Full member with “get out of work” pass - $230/month. Same as above, but the without the work expectation.

Affiliate member - $25/month gives you one free day pass/month, plus the ability to purchase additional day passes at $10/day. Affiliates cannot receive mail here, nor host outside events. Affiliates can reserve conference rooms, and can attend all our awesome social activities without burning a day pass. There is no work expectation.

Student members - $35/month. Same as a full member, but available only to people enrolled in an accredited college or university.

Our break-even point depends on the mix of membership types and how many day passes affiliate members purchase per month. With our current mix of members, and assuming affiliates purchase four day passes per month, our break even point is 52 members.

We have 28 desks. Based on current usage patters, we think that 70 members is about the upper limit before collisions will be a real issue, but we are not there yet. It may be lower or it may be higher.

Sunday, February 5, 2012

What it costs to run a coworking space

There has been some chatter on the global coworking Google group about the costs to start and run a coworking space. Alex Hillman of IndyHall discussed it on his blog, and I thought I would talk about Workantile here.

Workantile leases about 3,200 square feet on Main Street in downtown Ann Arbor. It is on the ground floor in a former retail space, and our rent reflects that at almost $25/square foot. This by far our biggest expense.

Our monthly expenses are:

Rent: $6,600 {EDIT: This includes utilities. We don’t pay them directly.]
Internet: $190
Insurance: $111
Supplies: $50
Professional fees (CPA): $33
Total: $6,984

We have two internet connections, one from Comcast and one from AT&T. Both are 18mbps. The Comcast connection costs $95/month, the AT&T $85/month. They are connected to a bespoke dual-WAN router with load-balancing and failover. Now that the kinks have been worked out of this arrangement, we never have a problem with internet connectivity.

The insurance is paid quarterly and CPA yearly, but for budgeting purposes this is what it costs per month.

Credit card processing fees ran around $200 in January. This is a variable cost, of course, as our membership grows this will go up. All members are billed monthly through our credit card processor, Stripe. Stripe is extremely easy to work with. Their recurring or subscription processing is set up really well, it is easy to integrate it with your own billing system, their reporting is excellent, and their charges reasonable and completely transparent. We used Authorize.net in the past and will never go back.

For card-present charges, such as day passes or trial memberships, we use Square. Square is easy to set up and use.

We run a lean operation. We have no receptionist, instead the members take turns answering the door and giving tours. The members also clean the place, taking out the trash, cleaning the sink and toilet, and tidying up when necessary. Every second Sunday we have a general clean-up day where members come in, vacuum and mop the floors, wash windows, tables and chairs, scrub the bathroom, and clean out the fridge.

Trek Glowacki, Dave Nelson, Bill Tozier and I split management and administrative duties, which saves on office manager expenses. The fact that members are billed monthly automatically eliminates that administrative hassle.

I can’t speak to the cost of starting a coworking space, since we acquired Workantile from its previous owner.

Feel free to contact me if you have more questions about the cost of running a coworking space.

Sunday, January 29, 2012

Reboot

The Penultimate Word lay fallow for some time, but I am rebooting it as a blog dealing with the challenges and rewards of running a coworking community, on software development, and with the occasional rant thrown in.