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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

SpacesBellevue@gmail.com 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