November 16, 2012 AT 8:00 am

How To Start A Hackerspace: Part 5 – Money and Resources

Money and resources are key issues for all Hackerspaces.

In many instances you’ll find that your resources can come from your co-hackers – someone might have furniture or tools (or they might know someone), or someone in your Hackerspace circle knows how to – or is motivated to – do something that needs to be done. Pull resources from your co-hackers, and when in doubt, ask around. However, don’t expect that you can get everything for free or that the tools and equipment you get as donations will work, or be safety compliant.

Money is fuel for your fire. Here is a list of common costs to expect. These items below are the costs you will have to pay for monthly or semi-regularly, except for project consumables (materials) and maintenance of equipment.

Rent - Usually the most capital intensive line item that is paid monthly as a space is starting up. Use this example equation to calculate your annual rent costs and plan a budget:

$1 per Sq Ft * 2000 SqFt per month * 12 months = $24,000 / year

Utilities - These are the basic resources that make your space more habitable. You’ll need electricity, water, heat, waste removal, recyclables removal, and an Internet connection.

Insurance - If your space is being set up in the United States it is a common stipulation for commercial leases to require a general liability insurance policy in place with $1-2 million in coverage before keys are handed over for the property. Depending on location, and coverage requirements it may range from $500 – $2000 or higher per year. Directors & Officers liability insurance may also be useful.

Permits - Some municipalities and federal organizations may require permits, and they’re usually not free. This can vary from an Air Emission permit to run your laser cutter or to do new construction inside your space, or needing a permit to hang a sign outside. Check with your local municipal offices so you don’t get stung – or worse, shut down – until you become compliant.

Consumables - Materials utilized for projects: sometimes you can get these donated, but for specific items (such as 80/20 aluminum stock, lumber, raw plastic materials, wiring, solder, or Arduinos) you’ll have to pay for it.

Tools and equipment - If you want to write code, this means laptops or servers. If you want to weld you’ll need a welding rig and clamps; to cut acrylic, a laser cutter – and no matter what, plenty of extra safety gear. Make a list with all the items your co-hackers want and affix a price tag for new or used versions.

Staff - You might want someone (dependable) to handle your administrative work instead of it all falling on you, or instead of depending on volunteer hackers. An intern can deal with paperwork while you go hack on stuff, and they can be paid or unpaid – as long as you agree to compensate for their time in a concrete way, and agree on expectations about their time.

To pay for all of this, you have a lot of options. This list is not definitive, but it’s a great start:

  • Membership dues
  • Product Sales
  • Fundraising: bake sales, car washes, parties, raffles, silent auctions, etc.
  • Donations
  • Classes/Workshops
  • Corporate Sponsorship
  • Space Rental
  • Grants

Just remember to be flexible in your funding sources and not to rely on one method. You may have a sponsorship stop or your membership drops below the minimum required to keep the lights on – and this would spell trouble for your Hackerspace.

Bank Accounts & Payment Processing

If you take money in for your organization, it’s probably not the best idea to stick it under a mattress. You must set up a way to store your funds and turn on the ability to process non-cash payments like debit and credit, or Bitcoins. I’ll go into more detail on this, and the prospects of legal incorporation in a forthcoming post. Just remember to get your ducks in a row before you have a pile of cash frozen or your account cancelled.

A good rule of thumb that is followed by many Hackerspaces I’ve worked with is to keep a three-month “rainy day” buffer of funds handy “just in case.” Make an estimate, and don’t touch that money unless things get desperate. Of course, having a longer cash reserve is always better. ;)

After you have settled on a model (which you can change later) for you and your co-hackers to support your Hackerspace it’s time to focus on the space itself.

The next step is How To Start A Hackerspace: Part 6 – Get Your Space Ready

Also check out the intropart 1part 2, part 3,and part 4!


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1 Comment

  1. 2,000 feet might be a little bit to start out with. It depends on whether you have a following or not. Sometimes putting too much effort forward and expanding too fast is what hurts people because it is like having a bank account. You can’t spend more than you make or you will run into trouble.

    You might need to have adequate electric as well. If people want to use a 220 line, you have to be equipped for that.

    I’m also guessing things will get broken so you might want to budget 1/3rd of the costs towards repairs and unexpected things.

    I think that people have to look at some of the charges that local hackerspaces charge. If they are expensive or unreasonable charges, they keep people out. Keep in mind that a lot of families don’t have savings accounts so your audience is people with upwards mobility.

    I guess you have to have people who already run hackerspaces to weigh in on these ideas and policies.

    If this was a gym for gymnastics, some places charge each child $75 a month for insurance. If your hackerspace is doing coding, you probably don’t need it but if they are doing metalworking or welding, you might need something like that and whether you have rules and insurance policies to cover everyone including yourselves.

    You might want to mention lawyers. You want the users to sign something saying that they will defend you in court which means they will cooperate instead of being uncooperative. You get them to agree to have a buddy system for safety and to follow all the rules.

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