I look at pro formas all day long. I build them, I review them, I compare them across clients in totally different markets, and one pattern shows up over and over again: it is very hard to run a highly profitable coworking business if you are only focused on selling your workspace. That’s the topic of this episode of the Everything Coworking podcast, “How the Most Profitable Coworking Spaces Generate 30 to 40% of Revenue Outside of Workspace,” and it’s the first in a series I’m doing this summer on adding revenue to your business.
This article is the written companion to that episode. It walks through the math, the three non-workspace revenue channels that matter most, and what it actually takes to build focus around them.
Workspace revenue is only part of the picture
Here’s a benchmark to hold up against your own numbers: if your profit margin is in the high 20s and your revenue is running close to $70 a square foot, you’re doing well, and it’s because you’re not relying on workspace revenue alone.
Let’s start with what I mean by workspace versus non-workspace revenue, because I think this is one of the biggest points of confusion for new operators, and for a lot of experienced ones, too.
Your P&L breaks down by product type. Workspace revenue is from your private offices, your coworking memberships, and your dedicated desks. At that $70-a-foot, high-20s-margin level; workspace revenue typically runs 60 to 70% of total revenue. Not 100%. Not even 90%. Sixty to seventy percent.
That means 30 to 40% of a profitable operator’s revenue comes from elsewhere entirely.
There’s a related point that trips up many operators: within that workspace revenue, flex and dedicated desks usually account for only about 10%, even though many expect that share to be much higher. Private offices carry the rest.
Because offices carry that much of the weight, they can’t be soft. Nail your office pricing. Nail your occupancy. Don’t discount deeply against what you built into your pro forma. That part of the business has to be dialed in, because it’s the majority of your revenue.
But dialing in your offices will only get you so far. To hit the margins we talk about on this podcast, you need revenue from somewhere else too, and that somewhere else is almost always some combination of meeting rooms, event space, and virtual mail.
The math: same workspace revenue, very different margins
I want to walk through an example because the difference this makes is bigger than most operators expect.
Picture two operators, the same size space, and the same workspace revenue of $26,000 a month. Operator A is focused mainly on offices. Operator B has put real effort into meeting rooms, events, and virtual mail.
| Operator A | Operator B | |
| Workspace revenue | $26,000 | $26,000 |
| Meeting rooms | $8,000 | $13,000 |
| Events | $3,500 | $7,000 |
| Virtual mail | $2,500 | $4,000 |
| Total revenue | $40,000 | $50,000 |
| Monthly expenses | $32,000 | $35,000 |
| Monthly profit | $8,000 | $15,000 |
| Profit margin | 20% | 30% |
Same building. Same office product. Nearly double the profit.
Operator B’s expenses are a bit higher, mostly because events tend to need a contractor or two, but that incremental cost is small compared to what it unlocks. The revenue gap between these two operators is $10,000 per month, which amounts to $120,000 per year. Play that out over ten years, and you’re looking at $1.2 million in additional revenue and roughly $840,000 in additional profit, just from focusing on the products most operators treat as an afterthought.
This example also assumes an already optimized floor plan. If your office sizes are off or you don’t have enough offices for your footprint, your workspace revenue will be capped no matter what you do. That makes the non-workspace piece even more important, not less. It becomes the lever you actually control.
Your three non-workspace revenue channels, and how to think about each one
You’re probably not going to nail all three of these. Most operators end up focusing hard on two. Here’s how I’d think through each.
Events
Of the three channels, events is the toughest fit for most coworking operators. But if you have a beautiful flex space sitting underused on nights and weekends, especially something at retail level, it can be the biggest opportunity of all. And if you’ve come to terms with the fact that coworking membership revenue tends to cap out around 10% no matter how hard you push, events might be your move.
Just know going in that events is a different business model, one built around nights and weekends, that typically needs a contractor or two on staff, plus a salesperson who understands how to sell and staff events. I’ve seen a community manager run an entire events program well, with the pricing, CRM, marketing materials, and photography all built out, selling purely on inbound leads.
If you have underused space in your building, you can also structure a revenue-sharing arrangement with your landlord so you’re not carrying the rent liability for space that sits empty during the day.
Events also carry a bigger ticket size than the other two channels. A $200-an-hour event space only needs a five-hour booking to hit $1,000, whereas virtual mail needs ten separate $100 packages to get to the same number.
Meeting rooms
Meeting rooms sit next to events in your revenue mix, but the customer is different, and the revenue tends to be recurring rather than one-off. If your rooms are underbooked and the room itself is decent with parking available, the problem almost never turns out to be the room. It’s the checkout experience.
A 1990s-style booking interface does not convert, no matter how good the room looks. Platforms like OfficeRnD Growth Hub, Flexspace.ai, and Optix have driven measurable increases in meeting room bookings by modernizing the booking flow.
Start with an excellent product. A room without a window or abundant natural light can still convert well if you’re intentional about the design, furniture, and photography. Style it well, get real photography, price it right, and put it on a platform built for a fast, modern checkout.
Virtual mail
You don’t need a spectacular address to make virtual mail work, though having one certainly helps. What you need is focus: pricing it deliberately, marketing it, and building it out as a real e-commerce product rather than an afterthought.
The e-commerce piece is non-negotiable. If someone can’t buy your mail package online in a few clicks, you won’t sell it.
Lead gen partners are a separate lever entirely. If you’re not signed up with them, you won’t get the volume you’re hoping for, no matter how smooth your checkout is.
Some operators make enough in virtual mail revenue to cover rent. It takes real attention, but it’s one of the more underutilized opportunities in this industry.
What actually separates Operator A from Operator B
The difference isn’t luck or the market. Its focus, and that focus comes down to five things:
– A fully built-out product for each channel you choose: priced, packaged, and ready to book without a phone call.
– E-commerce that actually works. Nobody should have to call you to book a meeting room or buy a mail package. If I can’t figure out how to purchase your virtual mail product from your website in under a minute, you’ve lost the sale, often before your team even knows it happened. I’ve had this happen with clients: I go looking for the virtual mail page, and it’s buried three clicks deep under a workspace tab no one would think to check.
– A dedicated landing page for each product, optimized for search and written clearly enough that someone can understand the offer and sign up without a phone call. If you want to sell virtual mail, it needs to live in your top navigation, not buried in a dropdown. I’ve told clients this directly: get rid of the “about” link taking up prime real estate and put your revenue products where people can actually find them.
– Real pricing, treated as a deliberate decision rather than an afterthought copied from a competitor.
– Monthly tracking. Landing page traffic, conversion rate, and revenue by product line, reviewed with your team every month, the same way you’d review office occupancy. If you outsource your marketing or your SEO, make sure whoever’s doing that work knows these product lines exist and that you want to rank for them.
Beyond that list, talk about these products everywhere, not just on your website. Bring them up at chamber events, with local attorneys and accountants, anywhere you’re networking. Your Google Business Profile matters here, too. If meeting rooms are a priority, you want reviews that mention meeting rooms specifically, profile posts about the room, real photography. The same goes for mail and events.
Paid ads work well for events, where ticket size covers acquisition costs. They’re much tougher to make profitable for meeting rooms and virtual mail, where the recurring revenue per customer is smaller. That doesn’t mean skip marketing. It means being realistic about which channel earns a paid ad budget.
Start now, not in year three
The biggest mistake I see is treating these products as something you’ll get to once the core business feels settled. Don’t. Meeting rooms, events, and virtual mail all take time to ramp, the same way your office space did when you first opened.
If you wait until year three to focus on this, you’re leaving three years of margin on the table.
Where to go from here
If you’re in a strong market with an optimized floor plan, $70 a square foot in total revenue and a margin in the high 20s is the benchmark to hold yourself to. Your number will shift based on the market and pricing, but that’s the target.
Pick two of these three channels. Build a real product around each one: priced well, bookable online, with its own landing page and its own tracking. Set a goal for each and check it monthly. That’s where the margin is made in this business, and it’s available to nearly every operator willing to put in the focus.
For the full breakdown, including the math walkthrough on screen and more detail on each revenue channel, listen to the full episode of the Everything Coworking podcast.
