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Introduction
Whether you’re running a small business or large enterprise, WeWork is the perfect place to discover flexible workspaces. The place is the perfect solution to move the business pretty forward. WeWork offers work locations in more than 800 cities. Sounds amazing right!!! WeWork provides excellent and flexible workspace according to your requirement.
WeWork is the world’s 2nd valuable startup company of 2019. Within a span of one year, WeWork has reached heights in terms of revenue. Therefore many people are having various questions about the exponential growth of WeWork. If you’re the one who is thinking about how WeWork make money? Continue reading…
What is WeWork?
As mentioned earlier, WeWork is a popular American real estate company. It was founded in 2010. The parent company of WeWork is “The We Company”. The company is offering an amazing and flexible co-working space for small and large businesses for rental purposes. WeWork’s business model is similar to other rental companies, it makes money by renting space for others. WeWork has grown within a short period of time and stood as the best rental service in the world.
How does WeWork work?
So far we have discussed what WeWork is and the history of WeWork. Now, let’s have a look at how actually WeWork works.
WeWork initially gives a glance look at the real estate market. Find a centrally-located building in a populated location. Approach the landlord and sign an agreement for a long-term period. The period can be 5, 10 or 15 years.
The attractive feature of WeWork is, after acquiring the building or workspace property, the team updates almost everything inside. It means adding additional features such as offices, dedicated desks, private meeting rooms, cafe, conference room and other amenities.
Now, WeWork subleases the property to the corporate business for higher charges. Businesses are charged for space as a daily, monthly or yearly basis.
How does WeWork make money?
WeWork will rent buildings and workspaces from property investors or owners at a low price. Now, WeWork rents the workspace to its clients at a high price. This way WeWork is earning good income on every rental. Keep a note, note every location is equally priced. The rental price may vary depending on the location. The building rent may cost high at prime location and cheap at the places that are situated away from busy cities.
After renting the workspace to its clients, WeWork transforms the spaces and gives a new look. The team WeWork will update everything in the building. That is, adding additional features that are unavailable. WeWork adds features such as cafes, conference halls, recharge rooms, community spaces and more. After adding the extra features, WeWork will offer rent work location for significantly higher charges. It’s clear that WeWork is earning profits on rents. Also, it is making money by providing additional services such as a partnership with local companies and offering a car rental service. This way, WeWork is earning good income every year.
The platform is offering different types of membership and making good money out of it.
Let’s discuss them,
WeWork Memberships
Flexibility plays a key role in the WeWork business model. Clients don’t need to worry about leases. Did you know WeWork is offering different types of membership to seek the attention of people in every sector? Yes, you’ve heard it right. The memberships are for entrepreneurs, freelancers, large enterprises, startup companies and more.
Currently, WeWork is offering the following membership
Hot desks
If you’re an individual worker, hot desk offered by WeWork is the right option for you. This can be the cheapest option available for all the single workers. Here the users can choose their primary location and pick the seat according to their convenience. And start their working process immediately. These desks are suitable for a single client or one-man business. If you’re planning to rent a WeWork hot desk for one day, you need to pay $50 including membership fee.
Desk spaces
WeWork offers comfortable desk spaces for freelancers and start-up companies. It is said that this desk space at WeWork is offered at lowest-value. WeWork offers 3 types of desk space plans such as hot desks, dedicated desks and labs desks. These desk spaces offered by WeWork are starting at $190 onwards. The maximum desk space cost can be $700. Here the working locations are completely managed and maintained by WeWork staff. They provide amenities such as cleaning, IT, maintenance and more.
Private offices
WeWork earns good revenue from renting private offices. The rental service gets high gear and offers a private workspace for established companies like Facebook, Adidas, Salesforce and Microsoft. Sounds cool right!!! Yes, the standard private offices are specially designed for small business, remote workers, start-up companies and more. The rental prices are starting at $140 per month for an individual person. Depending on the office structure the rental charges can be upto $1200 per month.
WeWork is offering 4 private office plans such as standard private office, office suites, headquarters by WeWork and custom buildout. Depending on the plan, businesses can enjoy attractive features offered by WeWork.
On-demand access
As mentioned earlier, WeWork makes good income by renting the working space. On the other hand, WeWork is making money by providing additional services such as a partnership with the local companies and offering car rental services. This way, WeWork is making excellent revenue and the graph of the profit is increasing every year.
Global access – This is an excellent choice for entrepreneurs who have established their organization across the world. This plan allows entrepreneurs to buy a membership plan for their employees and clients to get access to WeWork across the globe.
We Membership – The WeWork members will receive amazing credits while booking desk space or private spaces. The more bookings you do, the more credits you can get.
Event space – This is one of the great options for businesses who are planning to conduct special events. WeWork provides a venue for several types of events such as orientation, client meeting, festival celebration, annual day celebration and other parties.
Why does the property owner choose WeWork as a tenant?
According to the property owner or landlord perspective, WeWork’s business model is straightforward and genuine as they accept long-term agreements for lease. Considering commercial property, the owner can easily manage when they have a single contract for a fixed period of time rather than managing multiple tenants for short periods. This is especially true that WeWork is the best option for the building owner who has a commercial complex in a competitive place.
Also, managing with a single tenant is less troublesome. WeWork will usually rent buildings or properties for at least 10 years. The landlord doesn’t need to worry about vacancy rates, as WeWork agrees for a long-term contract. As per the analysis, the company WeWork has increased brand exposure by providing rental service for innovative business, attracting young and providing service for popular corporate clients.
Why WeWork Works?
WeWork is always playing a safe game in the current market. It always looks for new opportunities to increase their profits. WeWork understood the ultimate rise of small business and startup back in 2010. Without ignoring, WeWork is offering flexible workspace to startup and freelancers.
Brand
A powerful brand is every company will look for. In such a scenario, WeWork has a strong brand name in society. As the company is giving tough competition in the market. There are multiple aspects that consider WeWork as more attractive and effective than its competitors. Since they have especially differentiated themselves by offering excellent features to its clients.
Flexibility
As mentioned earlier, flexibility is the key to WeWork’s business model. No matter whether a user is looking for a hot desk or private office, WeWork offers a workspace for everyone. Many small businesses, a group of individuals, freelancers and multinational companies are getting benefited with WeWork.
Data
This could be a more attractive feature of WeWork. Did you know that WeWork collects useful information? Yes!!! The team WeWork will collect information about the people who work at WeWork locations. Also, when they are productive and more. This helps WeWork while optimizing building for better. Let’s consider, the data can be useful while designing the conference room. Depending on the data, the WeWork team will allocate space for the conference rooms. This will avoid building unnecessary rooms. The wasting location can be a conference room or desk.
WeWork Annual Revenue – 2020
WeWork revenue was $3.5 billion in 2019. As per the recent analysis, WeWork sees above $1 billion in its revenue. The WeWork revenue has climbed almost 45% from 2019 to $1.1 billion in 2020. The WeWork chief financial officer stated that WeWork would double its earnings every year.
WeWork also stated that currently, it has more than 693,000 members around the world. It means it has grown almost 49% increment from the past year. These companies have more than 500 employees. WeWork has relied on large enterprises and established companies. This is one of the good reasons for company growth.
Conclusion
WeWork is one of the popular companies that is offering flexible co-working spaces for all kinds of businesses. Many large enterprises, remote workers, small businesses and freelancers are the users of WeWork. The company is earning good income just by renting out space for its users. WeWork users are getting amazing benefits such as network opportunities, excellent amenities, handling administrative tasks and more. WeWork revenue was $3.5 billion in 2019. Currently, WeWork has earned $1 billion in profits in 2020. The company is expecting 25% growth in 2021.
