How to Make a Coworking Space Profitable: 7 Ways to Maximize Workspace Valuation
As an owner of a coworking space, you know that a lot of factors contribute to its valuation. Given that coworking spaces host actual people, it's not only about increasing revenue and reducing costs. A valuable coworking area will also have a lot to do with the atmosphere, culture, perks, and tools that are a part of your space.
In this overview, we'll go step by step and provide instructions on how to make a coworking space profitable and achieve maximum value for your space, retain existing users and attract new ones.
The first step, before you begin tweaking or improving your coworking business, is to define exactly what you want to achieve. Since there are so many factors at play, it's best to first focus on a couple of specific ones and expand your objectives as you grow.
You can look at your objectives in the following categories:
- Costs. Obviously, your first line of improvement will be in cost, whether it be in increasing revenue (through charging more for rent or attracting new users) or reducing costs. Cost is especially important when you're first starting. Many coworking owners don't pay attention to cost as much in the beginning and believe that they will do what's necessary later on. However, when you optimize your costs from the very start, even when you only have a couple of users, it will be easier to scale when your coworking business grows.
- Branding and marketing. This is also an important factor for those coworking businesses that are still in their initial phase. Of course, branding and marketing will continue to be entwined in your operations at every stage of your growth. It's important to define clear branding and message for potential users and stick to it as you scale your business.
- Productivity friendliness. The general need for coworking spaces arose primarily from users' desire to be more productive than they would be at home or in a coffee shop. That's why you need to provide them with great productivity tools and minimize distractions so that they can clearly see the benefits of working in a coworking space.
- Flexibility. As a coworking space, you will need to provide flexible conditions for your members. Coworking users are usually freelancers and independent professionals who chose to work at a high degree of flexibility and they expect the same from their coworking provider. Improving flexibility through custom rates and flexible membership options should be one of your initial objectives.
The easiest way to get a coworking space right is to actually view it as you were the one who's considering becoming a member. Pay attention to the main questions and factors members consider when deciding on a coworking space:
- Am I okay with the price?
- Can I picture myself working here?
- Will I be able to be productive and creative in this space?
- Do I like the crowd here?
- How is the atmosphere?
- Will I have access to everything I need?
- Will it be easy to terminate my membership if necessary?
- Are there good networking opportunities?
There are many more questions that users look at. Another important point is that coworkers will never settle on the first space they see: they will do a lot of research and compare according to the features above. That's why you should prioritize differentiation from other coworking spaces and make sure you're offering a better value.
Just like in any other sector, customer support is extremely important when it comes to coworking spaces. Users want to know that they will have access to a helping hand whenever a problem arises.
Even though hiring additional people just for hospitality's sake might seem like a hassle to you, it will go miles in helping undecided users to actually pick your space.
Whether you have a receptionist, space manager, or only off-site support, make sure your users can reach you at any point, for whatever reason. The staff that's in charge of this section of the business should be friendly, helpful and ensure that the user feels like they're a part of a community. Every customer support interaction with your users should leave your members happy and delighted.
Side note: read How to Organize World-Class Support for Members at Your Coworking Space without hiring additional staff or investing in expensive software.
Technology and coworking software are also one of the top assets for workspaces. When you look at the costs factor, bringing in the newest, best technology tools can set you back quite a bit, but it's an incomparably awesome investment for the long-term future of the company.
I can honestly say that we wouldn’t be where we are today without coworking software. The andcards app made us more efficient and gave customers’ confidence. It became the tool to sustain and expand the business.—Stephen Carrick Davies, Hatcham House
For individual workstations, it's best to be equipped with all pieces of secondary tech equipment: from headsets and microphones to possibly sketchpads and projectors. It's important to identify and predict the needs of every member because it's likely they all have different technical requirements for their work.
Common rooms and conference rooms are the places where you can really introduce as many tech pieces as you want. A fun way to introduce new tech into common and leisure spaces is, for example, VR headsets and gaming consoles. All of these little assets will go a long way in adding value to your overall coworking business.
We previously stated that productivity is why most users decide to switch to a coworking space. However, often an equally important factor is networking possibilities.
When you're a freelancer working from home, it's very easy to get caught up in your work and forget to work on expanding your network of contacts.
As a common space serving a community, there is a lot that you can do to promote networking within your space.
Here are a couple of fun ideas:
- Host talks – chances are, your members are quite extraordinary people who had the courage to start their own business and work for themselves. Given that everyone has a different professional story and is full of advice, to-dos and to-don'ts, a fun way to connect your members even more is by hosting talks. This way, any members can choose to share their experiences and learn from others.
- Pecha Kucha events – Pecha Kucha is an innovative way of presenting that will allow your members to share key ideas in a short time span and practice their presentation skills at the same time. This presentation works in a 20x20 format: a presenter chooses 20 images (slides) and has 20 seconds to talk over each one. This setting is incredibly dynamic and will surely thrill your members.
- Professional Speed Dating – No, we don't mean speed dating even to find your next fling, but use the same format to introduce your members' professional work to each other. In a short timespan (five minutes or less), members can sit across each other and explain what they do, before moving on to the next member. This is a great way to find potential suppliers, partners or outside staff.
The way your coworking space is designed obviously plays a huge role in its overall value. Today, it can be a bit hard to shut out all the noise coming from interior designers and office decorators, who all have their own ideas about what the perfect space should look like.
A classic example is an open-space office: while some claim it's the workspace of the future, others are annoyed by the noise, inability to focus and have private time. The best way to handle this dilemma is to actually section out your space to feature different types of workspaces: from open space blocks to super-private sections.
“In our company, we have project managers who love working side-by-side, salespeople who need private space for calls and translators who want absolute silence to work at their best. We solved these differences by providing a separate space for different departments that cater to the needs of every staff member”, says Alice Hemmington, an office manager at TheWordPoint.
You shouldn't bother about interior design as much as the overall user experience of working in your space. After all, the design is just a decorative sprinkle of what your space is actually for – so, take a look at how members move through your space, what tools they use and what they like and dislike.
A simple, but effective way to check for glitches in the user experience of your coworking space is to spend one working day there yourself. When you come across all those tiny daily activities first-hand, you will know exactly what could use some tweaking and improving. Besides, you can check out the most inspiring coworking spaces from all over the world and maybe adopt some practices.
The easiest way to know exactly what works great and what doesn't in your coworking space is to keep your ear to the ground and listen to what your actual users have to say. Maybe you absolutely love the trendy conference room you designed yourself, but member experience might show that it's completely underused and that you would be better off utilizing that space for something else.
Set some time aside each month or quarter to foster communication with your members and listen to their opinions on what should be changed and improved.
There's so much you can do to maximize the value of your coworking space: from tiny, aesthetic changes to huge shifts in the business model.
Remember, the initial phase is bound to have roadblocks and things that will be not quite there yet, but if you listen to constructive criticism and tweak your space as time goes by, you will be able to adapt to every need your members might have.
Think of coworking spaces as a hospitality service: members come first. Don't ignore their feedback and always work on keeping them happy, productive, creative, and satisfied with the space they work in.
Need more tips on coworking space monetization? Read how to sell additional services to coworking space members.
The article is written by Erica Sunarjo, a professional writer working at the BestWritersOnline platform. She’s a fierce ambassador of the coworking space. Next to writing, Erica is also interested in digital marketing, dropshipping and she’s currently working on her very own book.