What it costs to run a Coworking space in Brighton (and how much The Skiff is making)
The Skiff’s membership income over the last 7 years was £1,151,793.02 — you might be wondering where it all goes. (Charts and numbers coming up!)
My primary source of income for the last 15 years has been working on software businesses.
The highest cost for software businesses is usually people; that’s not the case for coworking spaces like The Skiff.
I’ve dedicated about day a week to working on The Skiff for the last 13 years. I’ve drawn a small salary equal to around 10% of my income for just five of them and we’ve never distributed a dividend. I do it for the impact it has on me and our members — recent messages I shared from Jack and Pierre exemplify this.
While many software businesses have thrived over the past two years, they have been The Skiff’s most challenging.
I know other much-loved coworking spaces work in a similar way to The Skiff.
Members play a huge part in making everything work smoothly. They gain a sense of ownership in the process. At The Skiff, we’ve made this sense of ownership real by granting over 14% of shares (so far) to 140+ members.
So where did that £1.1 million go?
Here’s what our costs looked like over the last seven years:
Commercial building rents in central Brighton are almost as astronomical as the cost of houses and flats here — demand continues to outpace supply.
Our landlord is a private individual who lives in the UK. He has been developing property in Brighton for decades. He started investing in Brighton when North Laine was run down with many buildings in disrepair. He’s a builder and did much of the work doing them up with his own hands.
Staff costs have been significant too. Fellow Skiff Co-founders Anna and Carl, as well as myself, have each been employed at different times over the years.
In response to the huge drop in income since the start of the pandemic we’ve downsized the space, stopped drawing salaries and reduced expenses as much as we can.
Here’s what our month to month costs, totalling around £8,500, currently look like:
Sponsorships and meeting room bookings have kept total revenue above £10,000 on average over the last three months. We have VAT to pay on much of that, bringing actual income down to almost exactly the £8,500 we’re currenly spending.
Here’s a chart showing how revenue and use of the space has changed over the last two years. Note the recent big drop in use of the space in December when the Omicron wave hit. It slowed our recovery but visits are now back up to the best they’ve been since the start of the pandemic.
While all this seems positive given the circumstances it’s not the full picture.
Members provided most of the revenue we needed to survive over the last two years, and we also benefited from around £30,000 of discressionary Covid support grants from Brighton & Hove City Council.
We started The Skiff in a tiny space with less than £10,000 in 2008 and we avoided taking on any debt for nine years.
Other spaces subsequentially started with millions of pounds of captial (often debt). In 2017 we decided to take on some debt (less than £100,000) to make improvements to our space (including air-conditioning, phone booths, HD monitors on every desk and AV equipment for events).
During the pandmic we also took on a £50,000 bounce back loan and deferred a £9,000 VAT bill. We’ve paid back most of the VAT bill and have started making £600 per month payments towards the bounce back loan.
The debt we took on in 2017 is structured such that we do not have to make repayments unless we have a surplus. It was provided by local businesses who wanted to support The Skiff. The primary owners of The Skiff — Wired Sussex, Anna & myself — also participated. Currently over £20,000 of it is owed to Anna & I personally.
It’s possible coworking spaces that rent out whole offices to large companies are in a better position to us — even if they have significantly more debt.
The months ahead are likely to decide which coworking spaces (and other pandemic-affected businesses) remain in Brighton for the long-term. I’m hopeful that we all do, but there continue to be many unknowns.
If members and sponsors of The Skiff would like more detail on our numbers I’m happy to share them. You can even request access to Xero if you like! We’ve found a bunch of savings by being open in the past, but now we’re confident that what we need is more income.
We want to help more people escape the loneliness of working from home alone without The Skiff taking on any more debt.
Have you been working at home, in your bedroom? Maybe your preferred work environments change dependent on what you need to do each day. Switching rooms when you need a change. It’s wonderful having access again to Brighton’s many shared offices and hangouts including Jubilee library and your favourite cafe.
When you work from The Skiff it’ll become clear that is different from anywhere else you’ve worked.
This is a place where you’ll make lasting friendships. You’ll have the conversations that you wouldn’t be having at home. You’ll be surrounded by people who work the way you do, inspire you to do your best work and support you in making the most of it.
If you’d like to work somewhere that’s as open about ownership and financials as The Skiff is you can join here: https://www.theskiff.org/join/
We offer a 14-day no questions asked money back guarantee. All you have to do is come to The Skiff twice in your first two weeks. If you decide The Skiff is not for you I’ll refund 100% of your membership fee.
If you don’t need space to work but you’d like to help The Skiff through the next few months you can become a sponsor here:
Please change the Qty to sponsor more than £25+VAT.
The more we raise the more people we can support with free and reduced costs via The Skiff’s Inclusivity Membership Programme.
