To make a makerspace that will make money, your income will have to exceed your expenses. Start by taking a critical look at your projected expenses as well as your predicted income.
Expenses
The following is a summary of expected expenses for a shop that is 15000 square feet in size, located in a heavily populated area within a smaller city but close to a bigger city. Actual figures will depend on your location and size, but this should provide a good guide. All of the costs are quoted for the entire year, unless otherwise mentioned.
|
Expense |
Details |
Total Cost |
|
Rent |
$11.00 per sq. ft. |
$165,000 |
|
Building Maintenance |
$2.00 per sq. ft. |
$30,000 |
|
Property Tax |
$1.00 per sq. ft. |
$15,000 |
|
Utilities |
Gas, Electricity, Water, Trash, Internet |
$80,000 |
|
Salaries and Health Insurance |
Including full time and part time staff |
$400,000 |
|
Tool Maintenance and Consumables |
|
$36,000 |
|
Insurance |
|
$25,000 |
|
Marketing |
|
$15,000 |
|
TOTAL EXPENSES |
|
$766,000 |
Predicted Income
The following predicted incoming is based off of a 15000 sq. ft. workshop space. Remember it is alright to be optimistic, but make sure you are not relying on a huge return right after opening. It will take a while to pay off any loans or equipment costs you encounter for the start-up.
|
Income |
Details |
Total |
|
Memberships |
$540,000 (over 50 sq. ft per person) |
|
|
Rentals |
Shelf space $10 a month Pallet sized $30 a month Workspace every 50sf – $100 a month |
$50,000 (roughly 15% of members renting space) |
|
Classes |
Woodworking, machining, electronics, welding, jewellery, etc. (50% of the overall income) |
$500,000 (depends on number of students and classes offered) |
|
Supplies |
Mark up on raw materials for ‘making’ |
$60,000 (an average of $200 per member, per year) |
|
TOTAL INCOME |
|
$1,150,000 |
The above expenditures/revenue model is for a larger makerspace. Smaller makerspaces need to concentrate on breaking even. Xylem, a small makerspace (3000SF) has a small target of members and offers classes to non-members in order to meet their expenses. Whatever the size of makerspace, offering the basic services is not going to provide huge profits.
Several other means of earning income include:
Corporate Sponsorships – This has the potential for large amounts of revenue and can guarantee membership. Corporate sponsors can help pay for set up costs and provide a guaranteed source of members. Deals can even be struck to have corporate sponsor staff use the space after hours or during non-busy times, so you can still have a regular membership. TechShop is the most successful example of a makerspace relying on corporate sponsorships.
Retail – In the Choosing Space section, having a retail area for members to sell their products was mentioned. Products can be sold at a commision, offering more opportunities for income. An online shop on your website is a great way to generate income, without having to use valuable physical space for storage.
- Ponoko, a New Zealand company, offers fabrication and the buying/selling of products. Non-members are charged a per minute fee for using equipment plus the cost of materials. There is also a Prime account for members. Ponoko also sells hardware, and apps to design products. In 2009, Ponoko was making $250,000 in profit.
- Shapeways, allows users to 3D print their projects and use their marketplace. Product Price depends on the quantity of material used and includes shipping. Profit has been varied – some years it is high, others low.
Educational Service Provider
As illustrated by Sprout, one does not need their own designated makerspace in order to be a protagonist of the maker culture. If you have a well-developed vision, a strong marketing and networking strategy, and burgeoning community interest; it may be possible to develop and provide programs, seminars, and related services to support the market interest in this phenomenon in flexible contexts.
Discussion: We’ve provided 3 examples of strategies for earning income. Can you think of any other strategies? If so please describe the strategy and if possible provide an example of where the strategy is being used.
Discussion Summary: After ETEC522 2013 Winter Term 1 cohort discussions, another possible area for earning an income might be to partner with local schools. The school could pay fees while the makerspace would provide the space to work and possibly programming and facilitation of classes.
Please view the cohort experience in the comments below. If you are accessing this OER after November 3, 2013, you are welcome to further contribute to the discussion.
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There is a strategy close to corporate sponsorship, schools sponsorship or partnering with schools. So makerspaces can make deals with schools to provide courses, workshops and opportunity for school children to use the space in exchange of funding or a subscription fee per student. The Munich Fablab has partnership with schools but I couldn’t reach the details of this partnership.
The same can also be done with other community organizations who don’t have access to such tools and expertise. This will make the makerspace known to a wide-audience just with partnering with few organizations.
Great idea Shaimaa. Partnersips are a good way to attract new members and generate a steady stream of revenue. Of course dealing with schools offers new challenges because of minors dealing with heavy equipment and may require different insurance coverage. Also one has to consider school budgets in the area and if they have enough money to pay for student memberships.