Creating space for business and innovation · Creating space for business and innovation Yash...
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Creating space for business and innovation
Yash Talwar, Nour El-Din Ayad, Garvit Dhingra Business Plan NLC 2018
International Community School Washington State
[email protected] SpacesBellevue.com
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Table of Contents
1.0 Executive Summary…………………………...………………………………………2
2.0 Company Profile………………………………..……………………………………..3 2.1 Legal Form of Business
2.2 Effective Date of Business
2.3 Mission Statement
2.4 Company Governance
2.5 Immediate Development Goals
2.6 Financial Status
2.7 Company Location
3.0 Industry Analysis…………………………….…………………………………….……5 3.1 Description, Trends, and Opportunities
4.0 Target Market…………………………………………………………………………..6 4.1 Market Analysis
5.0 Competition Analysis………………………………………………………………....7 5.1 Key Competitors
5.2 Potential Future Competitors
5.3 Barriers for Future Entry
6.0 Marketing Strategy…………………………………………………………………..10 6.1 Key Message
6.2 Business to Business (B2B) and “SoLoMo” Tactics
6.3 Media Platforms
6.4 Sales Procedure and Strategy
7.0 Operations……………………………………………………………………….....…14 7.1 Business Facility
7.2 Production Plan
7.3 Personnel Plan
7.4 Impact of Technology
8.0 Management and Organization………………………………………………….21 8.1 Key Employees, Board of Directors, and Human Resources
8.2 Identifying, Recruiting, and Securing Key Participants
8.3 Compensation and Incentive Plans
9.0 Company Analysis…………………………………………………………………...21 9.1 Important Assumptions
9.2 Short- and Long-Term Development
9.3 Risk Analysis
9.4 SWOT Analysis
10.0 Financial Plan…………………………………………………………………………25 10.1 Accounting System
10.2 Capital Expenditures and Loan Request
10.3 Monthly Income Statement
10.4 Annual Income Statement
10.5 Cash Flow Statement
10.6 Breakeven Analysis and Return on Investment
11.0 Appendix………………………………………………………………………………30
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1.0 Executive Summary
After generations of structure and restraining work environments, creative thinkers and innovators
alike are now looking to expand beyond the confining walls of a cubicle, and to pursue their unique
visions without boundaries. With the rise of the digital era, entrepreneurship is no longer limited by
financial advantages and prior opportunities. In fact, according to the Global Entrepreneurship
Monitor, nearly 27 million Americans have started or are running their own businesses, amounting to
nearly 14% of the population. However, nearly nine out of ten aspiring entrepreneurs face financial
obstacles due to burdensome initial capital expenditures (Forbes). Meanwhile, a new generation of
Americans are rejecting the traditional office environment, searching for new alternatives that foster
more possibility in the business world. For aspiring business leaders, Spaces will be their solution,
creating more opportunities for business and innovation.
Spaces is a unique coworking office in the heart of downtown Bellevue, offering a variety of work
environments and business amenities to help foster the inventive spirit of entrepreneurship. By
building a shared workplace, entrepreneurs and freelancers will find a dedicated community of
business pioneers. Spaces will offer a wide range of services, from hot desks and student passes to
fully fledged custom offices. With a fully functioning work environment already in place,
entrepreneurs can worry less about the hassles of leasing a building, furnishing an office, or
purchasing equipment and amenities, and instead focus on the priorities of their small business.
The industry of coworking is growing exponentially, with the number of coworking locations almost
doubling in America every year (Pasquier). The internet and cloud services have untethered the
average worker from the traditional office, while rapid advancements in the technology and media
sectors have created an explosion of new startups. All this has cultivated a huge demand for
alternative work environments, and with a renewed emphasis on networking and connections,
coworking has evolved from a concept to viable industry.
The growing Bellevue metropolitan area will serve as Spaces’ central location. Over the past couple
years, downtown Bellevue has become a fast-growing city, cultivating more business and economic
opportunities to many of its inhabitants. Although Bellevue is home to one other major coworking
institution, Spaces will undercut their prices and serve to other members of the innovative
community that aren’t accounted for (i.e. students). In fact, “even if the Seattle area had 50
coworking spaces, we wouldn’t be anywhere near capacity” (Sayles). Ultimately, by residing in the
5th largest Washington city, Spaces will expand the office opportunities available to not only locals,
but to the rest of the Pacific Northwest.
Spaces will obtain its initial financial expenditures through the Small Business Administration
(SBA). The company will acquire an SBA 7(a) Small Business Loan for about $2.2 million. The
SBA will secure the loan from the local Bank of America, and in return Spaces will pay a loan
guarantee fee. The company plans to pay off the loan with an interest rate of 7.25% within a 15-year
maturity period. Although we have prepared for early losses, we are confident that Spaces can
become financial stable. By aiding a growing movement in a top city of entrepreneurship, Spaces
will establish itself as a leader in the commercial movement towards a more innovative community.
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2.0 Company Profile
2.1 Legal Form of Business
Spaces will form a Limited Liability Company
(LLC). An LLC shares the same advantages as a
sole proprietorship and general partnership: no
double taxation and management flexibility. An
LLC will go under “Pass Through Taxation”;
which means all profits and losses will be
recorded under each co-owner’ tax return. An
LLC will also benefit with limited liability,
resulting in a 0% risk of the owners’ personal
assets. With recent amendments to the U.S. Tax
code in Congress, subjects to Pass Through
Taxation will be able to deduct 23% of their
taxable income.
2.2 Effective Date of Business
Spaces will begin operations on January 15th, 2019. Before opening day, the Spaces team will
organize and create a working environment for our beginning clients.
2.3 Mission Statement
Spaces strives to create a professional and vibrant environment for small businesses and young
entrepreneurs. Whether it be an emerging business searching for a startup location, or an
established company looking to expand, Spaces offers an array of workspaces in the Bellevue
area, and provides these organizations with the proper resources such as conference rooms,
private study-quarters, and other business amenities. In short, Spaces attempts to not only be an
office co-op, but also to enhance the small business community by encouraging networking
among entrepreneurs and small businesses.
2.4 Company Governance
Since Spaces will run as an LLC; the three chief officers will be Yash Talwar, Nour El-Din
Ayad, and Garvit Dhingra. Under the legal agreement, Yash Talwar will act as the C.E.O (Chief
Executive Officer), Nour El-Din Ayad as the C.F.O (Chief Financial Officer), and Garvit
Dhingra as the C.O.O (Chief Operations Officer). All three co-owners will hold limited liability
within the company.
Benefits of an LLC
Management Flexibility: An LLC can opt to
be managed by its members, which allows all
owners to share in the business’s day-to-day
decision-making, or by managers, who can be
either members or outsiders.
Limited Protection from liability: Owners
will enjoy limited liability, which means they
are personally protected from any liability of the
LLC and successful judgments, as well as from
the LLC itself.
Pass-Through Federal Taxation on Profits:
An LLC is a pass-through entity, meaning its
profits go directly to its members without being
taxed by the government on the company level.
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2.5 Immediate Development Goals
For the company to experience success as soon as we begin operations, it is critical that Spaces
begins to develop its company assets directly from the company’s initiation. Within the first
three months of operation, Spaces must:
- Fully train employees and community managers to ensure smooth operations
- Conduct efficient advertising in multiple channels, including social media and physical
branding throughout the downtown area
- Attain about 50 students and businesses, to ensure we meet our financial projections and
build an initial customer base
2.6 Financial Status
Although Spaces’ three chief officers possess substantial personal assets, under Washington state
law, co-owners of an LLC are not required to provide their personal assets as a collateral to the
agreement. However, to launch Spaces properly, significant additional funds are needed. For this
reason, Spaces will apply for an SBA 7(a) loan from the United States Small Business
Administration for about $2.2 million dollars, with an interest rate of 7.25%.
2.7 Company Location
Spaces will be in the heart of Bellevue downtown, a bustling metropolitan area quickly
becoming the leading business hub of the greater Seattle area. Spaces will lease the 8th and 9th
floor at the Bellevue Pacific Center, a 40,809 square feet facility at 188 106th Ave NE #400,
Bellevue, WA 98004. Located walking distance from Bellevue Square, Bellevue Downtown
Park, the Bellevue Transit Center, and the City Center, Spaces is minutes away from
entertainment, dining, transportation, and the heart of a bustling city, an attractive feature of
working in the Spaces office.
5th
largest city in Washington
Annual population
growth rate of 5.1%
Population
1.69% Annual Job Growth
Median Income of
$100,703.00
Economy
Home to 23,889+ local businesses
49.2% partake in
business & tech fields
Coworking
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Coworking Client Survey Results (2020 Inuit Report)
3.0 Industry Analysis
3.1 Description, Trends, and Opportunities
The turn of the 21st century brought the boom of the internet and a new era of business and
innovation. As of 2014, 96% of those under fifty years-of-age in the U.S. actively use the
internet, and 94.7% of businesses report having a reliable internet connection. This has enabled a
drastic shift in the global workforce. Entrepreneurship is no longer dominated by venture
capitalists and the upper-class, instead start-ups are now a thriving field for the middle-class. Not
only is creating a business increasingly more prominent, but the resources to do so have paved
the way for innovation unlike ever before. The days of a nine-to-five in a small cubicle have
been replaced with a new era of freelancing and working from home. In fact, according to the
Inuit report, 40% of the American workforce will either be freelancers, temps, or independent
contractors by the year 2020. Survey results indicate that over a period of time, employees in co-
working areas felt more focused, confident, and creative.
Nearly 43% of the American workforce worked from outside the office in 2016. This has all
culminated in a desire for a new type of workspace, one which enables the freelancer, the
entrepreneur, and the digital nomad to break free of the high-costs and hassles of a traditional
office. Coworking, a new emerging business industry, has quickly begun to fill that demand.
Created in 2005, coworking is the concept of non-traditional office spaces, enabling customers to
rent desks or office space in a shared community. Fully furnished and equipped with amenities
such as Wi-Fi and business resources, coworking enables small and medium enterprises, as well
as the digital nomad and entrepreneur, to drop in and focus on work instead of the hassles of
real-estate and the traditional office. Coworking has exploded onto the business scene in the past
decade, and since 2005 the demand for coworking spaces has increased exponentially every year,
with an estimated 4,528 coworking spaces across the United States in 2018. This is the prime
opportunity for Spaces to enter the field and find demand and success in the market.
68% Feel more focused
in a coworking
area
71%
Feel more creative
in a coworking
area
90% Saw an increase in
their confidence
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Coworking Spaces in the U.S. Since 2005
As seen in the figure to the left,
coworking has been growing across the
nation at an almost linear rate.
Specifically, between the years of 2012
and 2015 there was a significant
increase in the amount of coworking
offices. This is directly correlated with
the amount of businesses created. With
the shift to an alternative working
environment, small and emerging firms
had decided to switch to a better and
more innovative setting: coworking.
4.0 Target Market
Spaces will primarily target small businesses,
entrepreneurs, and freelancers seeking to engage in
the Seattle area as its chief market for business.
Although establishing high-quality products
and reputable services are often a priority for
startup companies, according to a Small
Business Administration (SBA) report
published in 2016, a business’ location largely
impacts its brand image, reputation,
accessibility, primitive finances, and market,
among other crucial items. To adhere to this
matter, Spaces aims to provide small and
emerging businesses with an array of
workplaces in the Bellevue metropolitan area.
Our secondary target market will consist of
high school students in the Bellevue, Lake Washington, Seattle school districts, and university
students. Spaces aims to attract these students in order to spur networking with the small
businesses and entrepreneurs. Students may get the opportunity not to only complete their work
at Spaces but also to attain possible internships from these small businesses.
Primary Target
Market Secondary Target
Market Small Businesses
Entrepreneurs
High School
University Students
Greater Seattle Area
14 283
1,096
2,876
4,528
5,476
6,219
2005 2010 2012 2015 2018* 2020* 2022*
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4.1 Market Analysis
Small Businesses and Freelancers
In the past year, small businesses in Washington
state employed about 1.3 million people in their
workforce; as seen in the figure to the left, that
number made up about 51.7% of people in the
working sector. Meaning a majority of people who
work are under some sort of small business.
Furthermore, in the private sector, employment has
increased by 3.1% in the past year; this was due to
the significant growth of small businesses. In 2014,
the average loan amount was under $100,000.00
among small firms. This is correlated with the
spread of co-working and other services alike.
These trends will play to the successes of Spaces as
we not only hope for small businesses to bring in a
significant number of employees but also to start
their firms with a low financial burden.
High School and University Students
With a significant amount of school districts surrounding the Spaces location, we hope to
establish a strong base that consists of a variety of students. Our goal is to motivate and
encourage students to network and connect with entrepreneurs, freelancers, and other businesses
alike to grasp a variety of opportunities. This will be a good method for students to have possible
internships or even create their own businesses in the near future. Specifically, for university
students, we plan to market and advertise at the University of Washington in Seattle. This
university not only has one of the most prestigious business schools but a majority of students
seek jobs and internships at small startups. Therefore, we hope that Spaces will act as a business
hub for these students.
5.0 Competition Analysis
Since its inception in 2005, coworking has quickly become a flourishing industry. In the past
decade, Seattle has become a hotbed for coworking offices. While analysts are confident the area
is nowhere near capacity, and demand is at an all-time high, it is still of utmost importance for
Spaces to evaluate competitors and ensure it stand out in a crowded market. While there is a
plethora of competitors across the state, Spaces will prioritize local coworking offices as our
primary competitors.
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5.1 Key Competitors
WeWork
WeWork is by far the largest competitor to Spaces. As an established international coworking
space, this company dominates a majority of the market share. According to the Wall Street
Journal and CNNMoney, WeWork is now worth over $10 billion, with some estimates as high as
$20 billion. With buildings in over 60 cities, WeWork is our main competitor not only globally,
but also locally. WeWork’s Lincoln Square office is the largest coworking space in downtown
Bellevue. While they offer many of the same services and amenities as Spaces, WeWork’s brand
comes at an exorbitant premium which can deter small businesses. Not only does Spaces
undercut their prices by at least 15-20%, WeWork makes no effort to cater to high school
students, a key secondary market for Spaces.
Davinci Meetings & Coworking
With 2 locations in downtown Bellevue, Davinci is another local competitor. While Davinci does
have coworking locations across the state, their Bellevue offices operate under a different
business model. They offer conference rooms and day offices by the hour, instead of permanent
locations. Not only are they expensive, there is none of the added value of working in a shared
workspace alongside other entrepreneurs. Most of their amenities are not included in the cost of
renting an office. They operate in archaic and bare offices, with a highly unappealing website.
Spaces is branded to appeal to a new generation of entrepreneurs, while offering not only
temporary conference rooms and day passes, but also permanent solutions to help business grow,
making Spaces stand out as a superior option to Davinci.
Regus
Regus is another local competitor in Bellevue, with a satellite in Key Center in Bellevue. They
offer both hot desks and permanent desks. However, their website is extremely difficult to
navigate, and prices are not offered upfront until after a tour of the facility. They offer few
amenities, limited to a desk, internet access, and a phone line. They offer meeting rooms for rent
and some basic coworking services. However, Regus is not a singular business offering spaces,
rather offering satellites and directing customers to affiliated buildings with available space.
Spaces offers one dedicated space, with better amenities, dedicated offices and desks, and better
services to help businesses grow, and thus stands out over Regus as a premier coworking option
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s p a c e s
5.2 Potential Future Competitors
Bellevue Square
As a flourishing city center, Bellevue Square is currently one of the highest performing shopping
centers in the nation, rapidly expanding into 3 separate malls covering all facets of shopping and
entertainment, from fast casual to luxury experiences. Currently, the mall has limited to no work
areas, but with plans to expand, the center could potentially create work spaces and areas that
could attract both entrepreneurs and especially students.
Office Nomads
A successful coworking space in the heart of Seattle, Office Nomads has achieved national
recognition as a premium coworking business. Given their extreme success and rapid growth,
there is potential risk for Office Nomads to expand into Bellevue, creating further competition in
an already crowded field.
5.3 Barriers to Future Entry
Service Differentiation
As Spaces will be the first coworking space to provide amenities and services that targets
students, it will be difficult for other startup companies to apply this into their business
successfully. Spaces will aim to create partnerships with the Lake Washington, Bellevue, and
Issaquah school districts. By creating strong bonds with educational organizations, Spaces will
secure a significant number of customers from the student base.
Competition Overview
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Location
Spaces will be the second start up firm for co-working services in the Bellevue downtown area.
Currently, WeWork is located in this area, however with our price modeling strategy we will
provide a cheaper alternative to WeWork, with the same location. This will make it harder for
future startups to locate themselves in the Bellevue downtown area as Spaces will soon be the
new local firm.
Price
Currently, the average price per square foot in the downtown area is about $35.00. However,
since Spaces is located on the outskirts of this area, the company pays an average $29.50 per
square foot. Due to this, we are able to undercut prices of WeWork and other competitors.
Therefore, new coworking businesses striving to locate near the similar area will find it difficult
to gain a strong customer base due to the already competitive prices that Spaces offers.
6.0 Marketing Strategy
6.1 Key Message
6.2 Business to Business and SoLoMo strategies
Since the company’s target markets are split into primary and secondary components, Spaces
will implement two strategies for customer relations: Business to Business (B2B) and SoLoMo
(Social, Local, Mobile). For small businesses, entrepreneurs, and freelancers, we hope to gain
their attention through our B2B strategy, and for our student base, we will utilize the SoLoMo
tactic to gain attention.
Business to Business (B2B)
Our B2B strategy will be used to attract our primary target market: entrepreneurs, small
businesses, and freelancers. This tactic will be split into three components: search engine
optimization, email marketing, and digital platform marketing. With automated email marketing
platforms such as mail chimp, Spaces will not only be able to create various online campaigns
but be able to deliver them in an efficient manner. Second, our digital platforms will include
networking hubs such as LinkedIn, Marketo, Eloqua, and HubSpot. These platforms allow
businesses such as Spaces to connect and link with prospective clients. With a sense of
“Here at Spaces we encourage an environment for entrepreneurs, students, and
professional individuals to develop new ideas- ideas that will solve the
technological, economical, and social challenges we face today.”
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professionalism, we will create advertisements on
these platforms to attract small businesses. Finally,
our most critical component of our B2B
strategy will be the search engine
optimization tactic on our online website.
In order for prospective clients to enter the
decision stage, they must be comfortable
with the seller. Therefore, having a clean
and efficient website will help Spaces
generate legitimate leads. Current search
engines like Google, Bing, and Yahoo
implement algorithms to help provide users
with relevant information to their searches.
To make sure that the Spaces website will
appear on page 1 search results, it is pivotal
we implement a strong SEO. When
developing a website, we will focus on two
components: onsite and offsite. Our onsite factors will include posting fresh and relevant content
on a consistent basis, as well as including keyword density like “Small Business” “Space” and
“Cheap Location.” Our offsite factor will include reaching out to small business blogs and
creating partnerships so other websites would include portals to our platform.
SEO Breakdown
Spaces Website
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SoLoMo (Social, Local, Mobile)
Spaces will also target high school and university students; therefore, it is essential to also create
an efficient marketing strategy that is structured around the interests of this specific consumer
segment. Spaces will implement SoLoMo strategies that are centered around our secondary
target market.
Social
With regards to social media, a large emphasis will be placed on customer interaction. Social
media platforms can no longer be considered places where businesses simply share information
or promotions, but rather are mediums by which to communicate directly with customers. As
stated in an article by Huffington Post, “A growing number of customers expect real-time
responses from their service providers. When customers are not happy with the service they are
receiving and want to vent their frustration, they increasingly turn to public channels, aware that
no company wants the negative publicity.” (Eldridge). In response to this, many firms are adding
social media (usually Twitter and Facebook pages) as a permanent channel for customer
interaction, which are fully integrated into their Customer Relationship Management (CRM)
systems.
Local
Being a small business, the company’s advertising and sales strategies will depend on local
interactions. Therefore, it is pivotal that Spaces establishes local connections within the growing
market. To implement this, hosting local events like Small Business Day will help increase
awareness of our brand. These events will be centered around spreading awareness about the
coworking industry and Spaces as a liable brand.
Mobile
Spaces’ mobile application allows
interested or current customers to
schedule and receive notifications for
appointments with our community
managers. In addition, it will include
information regarding both Spaces’
typical business packages and
general information on Co-op spaces.
Finally, customers will be able to
create a personal profile on the
mobile app to chat with customer
service agents to report any problems
that may arise.
6.3 Media Platforms
As stated in section 6.2, our media platforms will mainly consist of LinkedIn, Marketo,
Facebook, Instagram, and Twitter. On these platforms, the Spaces team will create various
Spaces Mobile App
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promotional posts. For example, as seen in
the figure to the right, a sample post on our
Instagram will mainly target students
who are interested in networking with
small businesses and freelancers. On our
LinkedIn, our posts will target small
businesses interested in saving initial
expenditures by moving to coworking.
Our platforms are split accordingly with
our target market. Digital advertising on
Facebook, Twitter, and Instagram will
be targeted towards students, while
platforms like LinkedIn and Marketo
will be used for attracting small
businesses and entrepreneurs.
6.4 Sales Procedure and Strategy
Our sales strategy will be structured under the
“Sales Funnel” concept and
will be interconnected with
our SoLoMo and B2B
tactics (Section 6.2) To
organize this into a
procedure, we have created
various steps for the
potential customers. The
first step in the sales
procedure would be
“Awareness.” Through the
implementation of our
SoLoMo and B2B strategies,
we hope to catch the
attention of many
prospective customers. Then
we will strive to make it
apparent in this phase, that
Spaces is a cheaper alternative to buying property. Next, the customer will enter the “Interest”
stage, in which we will discuss if their needs are met with the services we provide. This will then
lead into the “Decision” period in which the customer will purchase the service that best fits their
desires; this is the most critical stage as the conversion of perspectives into active buyers takes
place. Finally, the last stage is what Spaces will anticipate the most: we will encourage the
customers to do a referral also known as the “Action” stage.
Promotional Advertisements
Sales Funnel
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Pricing Strategy
To convert prospects into
active buyers, we will
need to have an upper
edge against our main
competitors. Therefore,
we used the “Business
Modeling” strategy to
create prices for our
unique services. The
financial department took
prices side by side from
our main competitor,
WeWork, and undercut
them by 10%-20%. This
strategy is realistic for the company as the Spaces headquarters is not as big as WeWork, which
allows us to charge less and still gain profits.
7.0 Operations
7.1 Business Facility
1st Floor 2nd Floor
Pricing Overview
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Spaces’ facility will be in Bellevue, Washington. In the heart of downtown area, business clients
as well as students will enter in through the front doors. They will be met by the community
managers who will supervise incoming customers. The first floor will consist of many hot desks,
group tables, high tables, office amenities, and a cafe. The first floor is mainly for the students
and customers who work alone or in small groups. The second floor will be for clients who own
businesses. That is where many of the employees of the small firms will work. Since Spaces will
provide customized offices for the small businesses, it is not possible to scale and map out the
second floor. However, the second floor will consist of bathrooms as well as more office
amenities. The registered address for the company will be 188 106th Ave NE #400, Bellevue,
WA 98004. Spaces will be closed for Christmas and Thanksgiving due to national holidays.
Furthermore, to give an environment of modernity and style, the offices will consist of glass
doors and windows and the furniture will consist of “smart” chairs and tables that will have
various outlets. Finally, we will also provide a cafe for clients who like to drink coffee or eat
other snacks
7.2 Production Plan
Spaces will operate as a multifaceted coworking area, and thus the vast majority of Spaces’
offerings are not goods but services, thus Spaces’ is not dependent on manufacturing
partnerships or other supply chains. Instead, the major factor influencing cost of our services is
our location retail lease. To generate revenue, Spaces offers are priced to ensure they cover both
the cost per square foot of the office as well as first floor layout other services provided.
With that in mind, Spaces chose a location not within the city center, to reduce location costs and
thus reduce service prices. However, even with a more inexpensive location, Spaces is still
located in the heart of downtown Bellevue, and thus office space is at a premium. Services such
as coworking desks and student passes will not generate nearly enough revenue to cover the
office space they occupy, instead serving as attractive incentives to build a customer base. Once
our customer base is established, Spaces makes every possible effort to help business expand and
grow, which not only builds a reputable brand, but business that are growing are more likely to
stay with Spaces, and upgrade to business tiers which generate our company revenue. Below, the
different services Spaces provides are outlined
Student Day and Annual Passes
Our secondary target market consists of high school and university students, and thus we have
created an explicit tier tailored to these populations. With a valid student ID, any student has
purchase access to a hot desk or lounge area, as well as limited access to conference rooms and
other business amenities. High-speed internet access, as well as projectors and other presentation
technology ensures students can work individually or as a group in a professional work
environment. Students also will have the opportunity to meet and network with business
professionals, building valuable connections. With access and partnerships with both the Lake
Washington and Bellevue School Districts, Spaces will market heavily to the student base.
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Partial Amenity Access
Hot Desks
Bronze level- $250/month
Bronze Level Pass
Silver Level Pass
Full Amenity Access
Permanent Desk
Silver level- $350/month
Bronze and Silver Business Passes
For business professionals and entrepreneurs looking for coworking options, Spaces offers two
tiers of desks in the facility. Our Bronze level offers access to all of Spaces business amenities
and services, as well as the opportunity to use any available hot desk on the first floor. The Silver
level package is for more established or longer-term entrepreneurs, who will be given permanent
access to the same desk, while still being immersed with other entrepreneurs and innovators. The
Bronze level access costs $250 a month, while obtaining a permanent desk for the Silver level
access is $350 a month.
Gold Business Passes
For larger small business or entrepreneurs looking for privacy and an enclosed office, Spaces
offers our highest tier, the Gold level. Customers of this pass are given an enclosed office with a
desk on our second floor. As seen in section 6.4, pricing is dependent on the number of
employees the business or group has. These customers are also given access to all the amenities
and privileges of the lower passes.
Annual Pass-$15.00
Partial Amenity Access
Reserved Desk Space
Partial Amenity Access
Hot Desks
Single Day Pass- $10.00
Student Annual Pass
Student Day Pass
Full Amenity Access
Enclosed Office
Gold Level- pricing varies
Gold Level Pass
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7.3 Personnel Plan Employees will be hand-selected by the three chief officers after being evaluated by the human
resources employee. Evaluation will be based on their expertise, shared belief in the company
vision, and dedication for the success of the company. Prior to selection, all potential employees
must fill out and send Spaces’ job application form. All hired applicants will be subject to
monthly employee evaluations to ensure the company runs smoothly and efficiently. Prior to the
company’s initiation, Spaces plans to hire 13 employees in order to support the company
efficiently in the opening years of business. However, as Spaces expands, the company will hire
more employees to accommodate the growing business. In addition, to gain employee loyalty, all
employees’ base salaries will increase by 10% after three years of operation.
Company Hierarchy
Yash Talwar Garvit Dhingra Nour Ayad
Chief Operations Officer Chief Financial OfficerChief Executive Officer
General Manager
I.TBuilding
MaintenanceMarketing Consultant
Company
Marketer
Community Manager
Janitor Café Baristas
Human Resources
Personnel Wages
18 | S P A C E S
Full Time Positions To maintain steady operations throughout the day, Spaces will hire a general manager, an IT
specialist, client marketing consultants, and company marketers. As vital employees, the full-
time staff will determine the long-term success of the company; therefore, the selected applicants
must possess a passion for their work and shared interests for the company’s goals.
General Manager Employee Count: 1
Job Description: The general manager at Spaces will direct and coordinate activities of all
departments of the company, including IT, operations, and sales. The manager will report
directly to the Chief Operations Officer, and will conduct monthly employee evaluations to
ensure company productivity.
Job Requirements: Any candidate applying for this position must have an MBA degree, a
standard 4-year college degree, and previous working experience in business management. The
general manager must be a natural leader with outstanding organizational skills.
IT Specialist Employee Count: 1
Job Description: With the implementation of innovative technology, Spaces will require an IT
specialist. The selected applicant will be working with computer systems as well as various other
technologies to help Spaces maintain smooth operations. The IT specialist will also be working
to resolve issues regarding software and internet access.
Job Requirements: Candidates must have obtained an associates or bachelor’s degree in a
technological field. Furthermore, the employee should have knowledge in various computer
languages and must be able to work independently for long periods of time. Certifications by IT
companies like Oracle, Cisco, or Microsoft would be a good asset to each applicant.
Client Marketing Consultant Employee Count: 1
Job Description: To set Spaces apart from its competitors, we will hire consultants that would
help the small businesses in our coworking space by providing certain marketing expertise.
Various tasks would include, creating small marketing campaigns and budgets.
Job Requirements: Candidates must have a degree in either marketing or another business field.
Knowledge in marketing strategies as well as content creation would be vital to completing
common tasks for this opening. Certification in marketing will elevate an applicant's status.
Company Marketer
Employee Count: 1
Job Description: To gain media and community attention, we will require an employee to
advertise and promote the Spaces brand. This employee will be tasked to implement the SoLoMo
strategy for the company. Social media platforms and other traditional advertising channels shall
19 | S P A C E S
be tools that this employee will utilize to spread awareness of the company. The selected
applicant will also work with the IT specialist to develop a mobile app for the customers.
Job Requirements: Like the client marketing consultants, the company marketers should have a
degree in a respective advertising field. Having worked with marketing tools is recommended as
most of the tasks involve this type of work. Any certificates or endorsements that are marketing
related, will act as bonuses to each application received.
Part Time Positions Separate from full-time employees, janitors, community managers, building maintenance
workers, and human resources employees will be required to work part-time for at least 4 hours
each day. Employees will be selected based on their dedication and motivation for the success of
the company.
Janitors Employee Count: 2
Job Description: The janitors will be responsible for cleaning and sanitizing offices, meeting
rooms, and bathrooms daily. In addition, they will vacuum the office grounds weekly, organize
the storage space, and clean any accidents that may occur in the office.
Job Requirements: Candidates must have at least a high school diploma; however, no
additional education requirements are required for this position. The majority of this job is
manual labor, including bending, walking, pushing, and lifting objects for a vast portion of
hours. Therefore, candidates must not have physical limitations that hinder their efficiency of
work. Previous experience will be taken into consideration.
Community Managers Employee Count: 2
Job Description: Community managers will be tasked to greet clients and students at the front
desk. Organizing open slots for conference rooms, or work alone desks will be common work for
these employees. Answering phone calls and customer concerns should fit the forte for every
selected applicant in this opening. Using Microsoft office products will be common for these
employees as well.
Job Requirements: Since the community managers are the first contact a potential customer
will encounter, they must be professional towards all clients. For this reason, they must possess
patience, English proficiency, and be familiar with office appliances (scanners, printers, etc.).
Furthermore, organization is crucial, as they schedule appointments and consultations.
Human Resources Manager Employee Count: 1
Job Description: The human resources manager will maximize the productivity of employees
by improving workforce relations in the office. They will be responsible for recruiting talent to
the company, and will also organize employee benefits and compensation. This includes
20 | S P A C E S
preliminary screening of potential employees and conducting administrative duties. The human
resources manager is a pivotal position for the success of the company.
Job Requirements: Being a manager position, applicants must possess an HR management
degree and be proficient in workforce management, statistics, and incentive programs. They
must have plenty of experience in an office environment as to understand proper workforce
relations.
Building Maintenance Employee Count: 1
Job Description: Having a safe work environment is not only expected by our employees but
our customers as well. Building maintenance staff will be tasked with conducting inspections for
the Spaces headquarters in Bellevue. Adjusting the property to fit both the customer and
employee needs will be required by this employee. The worker will also be tasked with
developing a safety code for a natural disaster or other harmful incidents.
Job Requirements: Having experience in building creation and inspection will be required for
this job. Carrying heavy objects, walking, running, and using tools should be comfortable for the
selected employee. At minimum, the worker should have obtained state safety licenses and a
high school diploma.
7.4 Implementation of Innovative Technology By implementing emerging technology into our business model, the staff will be able to create an
organized and efficient work environment. The Spaces workforce will strive to make day to day
operations more lean and concise. The community managers, general managers, client marketers,
company marketers, IT specialist, and chief officers will each have desktop computers with all
the relevant software for the company. This will allow us to implement emerging technology in
the following ways:
- Accounting – The chief financial officer of Spaces will use QuickBooks Premier 2018 to
efficiently organize the company’s accounting needs. This desktop application gives Spaces
more flexibility and marketing power, and helps the company save time and money.
- Open Space Availability – Open spaces for students and young adults will be updated
online by our community managers. This will allow customers to see when the perfect time is
to come in.
- Renovation Designs – The company will implement Chief Architect Design Software to
design renovations and structural changes for our gold level clients. Using the software’s
realistic 3D renderings, the customers will be able to see how their future business office will
look like.
- Employee Communication and Employee/Consumer Communication –
Through Microsoft Outlook, employees can email or chat with one another, host online
meetings, and email clients. This allows employees to communicate even when not in the
office, and keep clients informed about our work.
- Digital Advertisements – Spaces’ website, mobile application, and social media accounts
will provide the public with information about the company and our services, access for
customers to schedule consultations for our service.
21 | S P A C E S
8.0 Management and Organization
8.1 Key Employees, Board of Directors, and Human Resources
Spaces will structure its management functions and operations by the company hierarchy As shown, the
chief officers will generally overlook the performances of the general manager, human resources, and
community managers. Furthermore, each chief officer will have their own set of tasks and agendas to
complete. As Chief Executive Officer of Spaces, Yash Talwar will create an integrated operations plan
that will fit each departments requirement. This will ensure consistent day to day operations. As acting
Chief Financial Officer, Nour Ayad will oversee financial aspects and decisions, and will be expected to
create quarterly reports on the financial stability of the company. Garvit Dhingra, who will act as the
Chief Operations Officer, will supervise the management structure of the company. By working closely
with the human resources worker and general manager, he will ensure that appropriate candidates are
selected for the various other positions. Finally, Spaces will no acquire a board of directors during its time
as an LLC.
8.2 Identifying, Securing, and Recruiting Key Participants
As a start up in Bellevue, Washington, Spaces will not close doors on young adults who are striving to
break the barrier into the business world. Our human resources employee will use strategies to recruit a
mix of experienced professionals and young adults. This will allow a stable balance between
professionals and new recruits. As located near University of Washington, Spaces will target young adults
who have graduated with a bachelor's degree in their respective fields. Spaces will also recruit through
various online platforms such as Indeed and Zip recruiter. These platforms are essentially hubs for
recruiters and employers. Companies can view resumes and cover letters through these platforms and are
able to choose the most qualified applicant in an efficient way.
8.3 Compensation and Incentive Plans
To enhance the company’s services, a proper management and organization structure is necessary. To
develop a structured management, it is best that the company executives provide compensation plans and
incentives. Since Spaces is a co-working space, we will be providing discounted and or free prices for our
employees. Staff that stay with the company for at least 1 and half years, will receive special passes for
hot desks or open space desks at a cheaper price. Brand awareness is essential to turning prospective
customers into engaged buyers. Therefore, awarding the success of the marketing department would help
motivate the employees to put consistent effort. Based on each year’s marketing achievements, we will
also be providing commission to the marketing employees.
9.0 Company Analysis
9.1 Important Assumptions
Spaces financial and logistical projections are based on the following assumptions regarding the current
economic market and financial trends:
- Seattle’s small business and entrepreneurship market will continue to grow at the current rate
22 | S P A C E S
- The Washington state and United States economy will not experience significant change or major
recession
- Retail prices will continue to increase, thus making owning an office a financial burden on small
businesses
- The government will continue the trend of supporting small businesses, with tax breaks and other
incentives
- A percentage of businesses who use our coworking services will eventually move into more
permanent offices as their firms grow
For the company to keep moving in the right direction, it is imperative that Spaces sets goals both in
the short-term and long-term. By achieving these goals, our company will grow at a healthily rate and
achieve both economic and commercial stability.
9.2 Short- and Long- Term Development Goals
Short-Term Goals
The first three years of Space’s development are where the company is most vulnerable. The coworking
business model works because the gold level customers make up for the steep retail costs in downtown
Bellevue, and thus our first years are focused on establishing a customer base that will in the long term
become gold business. To achieve this, within the first three years of operation Spaces plans to:
- Secure numerous businesses as bronze and silver, and retain them with excellent customer
service and business amenities and consulting
- Breakeven by year 2 of operation, as outlined in our financial analysis in section 10.6. - Establish partnerships with both local school districts in the area, the Lake Washington School
District and Bellevue School District, to build a growing base in our secondary market of high
school students - Increase our gold level pass customers by 80% over our first 3 years
Long-Term Goals
Once Spaces is established in its first five years, the focus of the company is not only on remaining
relevant in an ever-evolving and expanding coworking field, but also the expansion to become a leader in
the market outside of Bellevue. Thus, Spaces plans to do the following after five years of operation:
- Establish a Spaces business network through the creation of a business forum where clients can
communicate and collaborate with former and current users of the service.
- Secure partnerships with larger businesses in the greater Seattle area, creating custom gold level
offices for companies of 20+ employees.
- Expand current office location by 50% by purchasing a third floor of the Bellevue Plaza Center,
as well as renegotiate a permanent purchase of the location after our initial lease expires
- Become a regional leader in the coworking industry by reassessing our target market analysis and
identifying potential expansion locations in our tenth year of operation.
As our customer base is established, and the Spaces brand become recognizable within the Bellevue
coworking industry, then expansion becomes a key priority. However, it is also necessary to insure we
maintain our current customer base, as coworking has a high turnover rate. Once small businesses are
established, they move on from coworking into permanent facilities, and thus we must constantly attract
new businesses and entrepreneurs to keep our offices and desks filled.
23 | S P A C E S
9.3 Risk Analysis
Understanding the risks present in our business industry is essential in overcoming any extemporaneous
obstacles and changing our reputational, financial, and marketing stance.
Financial Risks
The biggest financial risk facing Spaces, and the coworking industry as a whole, lies in the financial
burden in leasing or purchasing offices to create coworking spaces. Spaces chose to purchase land in
downtown Bellevue, where retail prices are at a considerable premium. To mitigate these costs, Spaces
chose to not purchase land within the city centers in Lincoln Square or Bellevue Square, and instead move
a couple blocks down, where prices are considerably lower. Thus, while still being located within walking
distance of the city center and its services, Spaces can obtain a lease at an 30% discount. However, even
with the reduction in cost, the lease is still a major expense. Empty and unfilled offices result in a direct
loss for the business, as they are a significant cost which doesn’t make profit. Until Spaces can establish a
customer base of the gold level, it will operate at a loss. To quicken this transition, Spaces will focus
heavily on customer acquisition, as well as convert unused offices into more bronze and silver.
Natural Disasters
Natural disasters pose a prominent threat. Seattle sits on the Seattle Fault Line, presenting a significant
threat of earthquakes. According to the Seattle Office of Emergency Management, an earthquake is the
single greatest risk facing the Puget Sound, with the probability of an earthquake in the next ten years
extremely likely. This means Spaces must prepare for a major natural disaster, equipping the office with
first aid kits and other supplies. By investing in insurance and property damage safeties, Spaces can
effectively prepare to mitigate the long-term consequences of a major seismic event.
Business Model Risks
As we push businesses to develop from idea to reality, many will eventually outgrow coworking and
move into permanent solutions. This means we risk losing our initial customer base after a couple years,
and as such risk facing potential deficits in our later years of operation. To mitigate this risk, we will
continue to focus on customer acquisition through consistent public outreach and outreach, ensuring that
after our initial focus shifts towards acquiring gold level businesses, we continue to replenish vacated
bronze and silver offices. We also intend to offer discounted bronze and silver rates to graduating high-
schoolers to continue replenishing vacated levels.
24 | S P A C E S
9.4 SWOT Analysis In
tern
al F
ac
tors
Pe
op
le
Strengths Weaknesses
• Specialized employees, headed
by community managers to
ensure a well-trained and excited
workforce
• Keeping a community requires significant
personnel, resulting in high personnel
expenses
Co
mm
un
ity
• Coworking builds a community of
dedicated entrepreneurs, helping
each other succeed
• Secondary market of students is
encouraged to return to
entrepreneurship
• Potential for competing businesses to be
within the same coworking space
• Lack of privacy until gold level business
Ma
rke
tin
g
• SoLoMo strategy ensures
marketing reaches all our target
markets
• Unified theme between
marketing, office décor and
layout, and website leads to a
contemporary brand and brand
recognition
• Marketing strategies are limited as a small
business in comparison to larger businesses
• Competing with numerous other companies
congesting our marketing channels
Fin
an
ce
• Receiving a SBA 7(a) loan for
small businesses establishes a
relationship between the
company and bank
• High initial capital expenditures result in a
longer period before breaking even
• Revenue is based heavily on gold level
businesses
Exte
rna
l Fa
cto
rs P
olit
ica
l
Opportunities Threats
• State and Federal government
are both heavily focused on
increasing small business growth
• Unstable political atmosphere results in
uncertainty in the market, as well as
potential for shifting economic factors such
as taxes
Ec
on
om
ica
l • Puget Sound experiencing huge
economic growth, especially in
the tech sector
• This results in inflated retail costs and
increased wages
• Small businesses competing with lucrative
job offers from established companies in the
area
Tec
hn
olo
gic
al • Rapid advancements in new
technologies such as AI have
resulted in an explosion of new
tech startups
• Internet enables Spaces to enact
inexpensive and targeted
marketing
• Technology is making working from home
much easier, a direct competitor to
coworking
• Easy to lose relevance and fall behind in an
evolving market
Leg
al
• No major product or good being
sold means no issues with
copyrights and patent
• Chief officers are subject to liability
• Potential for legal conflict between business
who share the space together
25 | S P A C E S
10.0 Financial Plan
10.1 Accounting System
Spaces will use the QuickBooks Desktop Premier 2018 computer
application to keep track of the company’s transactions. The Premier
2018 comes with industry-specific tools and reports, and creates sales
orders and tracks backorders. For a professional service like Spaces,
Premier 2018 can set different billing rates by business tier and
analyze profitability between client and office, although it has many
features to analyze our business, it is extremely comprehensive and
easy to use. For these reasons, the QuickBooks Desktop Premier 2018
is the ideal accounting system for Spaces.
10.2 Capital Expenditures and Loan Request
To fund the company’s initial capital
expenditures, as well as cover some
expenditures for years one and two of
operation, Spaces’ three chief officers will
apply for a $2,212,166.38 7(a) loan from
the United States Small Business
Administration. Much of the loan covers
the annual lease payment, as well as initial
office remodel and capital expenditures,
and thus the loan is classified as a real
estate loan with a maximum maturity
period of 25 years. However, Spaces plans
to pay back the entirety of the loan, both
principal and interest, within the first 15
years of operation. The loan principal is
above $50,000 and the maturity period
above 7 years, so a 2.75% markup spread is
added to the 4.50% base interest rate,
amounting to a 7.25% total interest rate. In
addition to the loan request, each of
Spaces’ three main shareholders will each
inject a personal investment of $200,000,
resulting in a total of $600,000 to assist the
initial development of the company.
26 | S P A C E S
Loan Amortization
10.3 Monthly Income Statement
27 | S P A C E S
10.4 Annual Income Statement
28 | S P A C E S
10.5 Cash Flow Statement
29 | S P A C E S
10.6 Breakeven Analysis and Return on Investment
Breakeven Analysis
To break even, Spaces’ total revenue must exceed the total expenditures of the company. As previously
mentioned, much of Spaces’ revenue comes from our gold level businesses, a customer base which will
take time to develop and establish. Thus, until that base is established, the company will operate at a loss
for the first two years of operation, and even out around the third year. Spaces will officially break even
and begin earning revenue in the end of the second year of operation. The chief officers have considered
the longer period required to break even by increasing our initial loan amount to cover some expenditures
for years one and two (as explained in section 10.2). Spaces has used conservative financial estimates to
minimize the risk of overestimating profits.
Return on Investment
By analyzing Spaces’ return on investment, we will be able to evaluate the efficiency of the company in
terms of our total revenue versus expenditures. In this way, we will be able to gauge the profitability of
our business. Until we break even, we will suffer a negative return on investment, as we will still be
establishing our business in our target market. However, as our marketing strategies attract more
businesses, and our customer base is established we can expect to continue to grow our return our
investment, and a 52.23% ROI by the end of the fifth year of operations.
30 | S P A C E S
11.0 Appendix
Work Cited
LLC Agreement Job Application Form