New coworking space owners that have little background and experience in the industry can face uphill challenges as they strive to achieve profitability. With that being the case, which pathways will lead to profitability quicker when there are so many different options in running a flexible workspace?
At Venture X, we offer a proven turnkey process that accelerates the start-up period so franchisees can see a quicker ROI.
Specific key strategies can be applied prior to opening and immediately after that are crucial to a new location becoming lucrative faster.
Accelerate to reach profitability
Savvy coworking operators negotiate rent abatement for the first 6-12 months of their lease. This reduction and/or deferment allows operators to efficiently manage cash flow during the critical startup phase, before full rent costs kick in.
This approach also provides more leverage when arranging and securing membership sales in advance of opening. So, having an active presale program is a key factor to focus on from the start.
Once a new location is open, it’s important to apply marketing to two key parameters: occupancy and member value. Deliberately concentrating efforts on growing membership while simultaneously creating a lively space with activity and collaboration is the best way to show the benefits of being a Venture X member. When the location hits 65–70% occupancy, the primary focus turns to maximizing revenue for the space.
Following that process with our franchise owners allows us to focus on the right parts of the business at the right time—ensuring a proper scale up to profitability that is likely to weather challenges that may arise.
Communities are built on activity and thrive with interaction, collaboration, and additional earned revenue partnerships.
Building a successful coworking community should be an ongoing collaboration between members, owners, and staff. Each member has their own reasons for joining the community.
Creating an environment that showcases your members will also create more opportunity and encourage networking that leads to partnerships. It makes the community a place that members look forward to going to, and that is the definition of success.
Venture X intentionally cultivates a culture of collaboration through a mix of member focused programs and open networking events, encouraging introductions.
The best part of our day is when we hear a member say, “I’ve gotten more value out of my membership at Venture X than money could buy.”
Powering through start-up challenges
Just like any business, independent operators encounter start-up challenges: limited financing options, lack of knowledge of key factors for optimal site selection, absence of trusted real estate advisors to help negotiate the right kind of deal, and no proven system or plan to move the business forward.
Our goal is to eliminate as many of those challenges as we can for our franchise owners. Partnering with the best minds in coworking—from financing to demographics to lease negotiations—helps our franchise owners avoid many of those challenges.
Growing interest in non-dedicated office space
While our primary source of revenue is in private offices, at Venture X we have seen healthy growth in revenue from what we refer to as “non-dedicated space use” since the end of the pandemic.
We have always designed our spaces to maximize square footage for private office space, but we knew the share of revenue from meeting rooms, event space rentals, podcasting facilities, and virtual offices would grow across the board as people came back to work. That has certainly held true this year.
Franchise owners have always looked at membership fees from private offices as their “bread and butter,” but they’re now seeing non-dedicated space income grow and become a healthy addition to the bottom line within their coworking community.
Pride of place
Creating a place where members feel proud of where they work and have the ease and ability to work and interact positively with others is a win-win.
In fact, the success of our model relies in some ways on how we design and furnish our locations. A certain percentage of each location’s floorplan should be reserved for common areas—this encourages community, open working, and collaborating.
To maintain our high-end feel, Venture X pays particular attention to our furniture, both in private offices and soft seating.
Our research and design team closely tracks activity within our spaces to make sure that new locations incorporate more of the floorplan features and add-on options that our members really use most — or want — in our network of locations.
The importance of value-added services
There is nothing more important to the long-term profitability of a coworking space than incorporating revenue earning potential outside the physical limitations of their space’s square footage.
As with any additional offering, it must make sense and be relevant to the current audience.
Many of our locations have listened to their membership to offer additional services that are in demand locally. Even though some businesses may not need a landline, high-volume printer, or dedicated bandwidth, for those that do, we can accommodate.
Virtual offices offer uncapped revenue potential for our franchisees; oftentimes these customers eventually upgrade to utilize meeting rooms and/or full-time office memberships within six months of joining as a virtual member.
Hospitality and coworking success begin at the front desk
Last but most certainly not least is hospitality. The first part of hospitality is the front desk reception for members, their clients, and potential members.
Offering a warm welcome, making eye contact, calling them specifically by name, having a genuine conversation, and even standing up to greet them: these are things that have no cost but deliver an incredible amount of value.
Retention is a huge contributor to profitability. After all, it costs more to acquire a new client than it does to maintain a current client’s happiness.
Offering a quick resolution to an issue, ensuring the space is updated, and making the community a place all members would be proud to bring customers or colleagues is, and will always be, extremely important in both keeping members happy and profits strong.
By being intentional when applying these strategies, coworking space owners will be able to provide an exceptional work environment that contributes to their members’ growth and success and attract and retain members that add value to the flourishing community, building a coworking space equipped for a profitable and prosperous future.
If you’re interested in owning or developing a Venture X space, visit the website today to learn more