In today’s market, opening a coworking space can be a wise decision. The number of startups, freelancers and remote workers using space-as-a-service offerings continues to grow, while more and more small and medium-sized organizations are choosing flexible, collaborative workspaces. Commercial real estate titans, property management companies and even inexperienced employees are all entering the market as the real estate footprint of coworking spaces expands.
The market is getting more crowded, but what does that mean for established businesses and newcomers? It’s more important than ever to keep a close eye on the key performance indicators that determine their success. Here we examine how ratios, space dynamics and other indicators are critical to sustaining, growing and forecasting their organization’s future…
Space is a precious commodity
In an ever-changing and expanding market, space is the only constant. For new or aspiring operators, it’s best to design your facility to make the most of the space available, especially the indoor net. Analyze every square inch of space carefully, considering everything from hallways to conference rooms to common areas when calculating conversion rates for your reports. Based on the square footage, you will determine your profit margins. It’s important to remember the basics…
Occupancy rate of coworking spaces
When it comes to making money from your office, occupancy rate is the most important factor.
1. The space
Occupancy rate is a percentage calculated by taking the proportion of space occupied and multiplying it by 100.
When tracking building occupancy, it is important to determine how many square feet are actually occupied each day. For example, run your occupancy reports on a monthly, quarterly or annual basis, with periodic spot checks in between to assess and adjust your staffing if necessary.
Keep in mind that the profitability of each operator will be determined by a variety of factors, none of which can be accurately predicted. The profitability of your workspace depends on how you divide your interior space between common areas, hallways, individual offices and coworking spaces. On the other hand, with an occupancy rate of 80-85%, most operators are profitable.
Calculating the percentage of occupied workstations to the total number of available workstations gives the “workstation occupancy” percentage ….
The configuration and use of workstations is constantly changing, which complicates the task. A picture of business performance based on occupancy can be obtained by implementing software that links your reservation system to your inventory and reporting capabilities.
Profitability of coworking spaces
The amount of money an operator expects to make from renting a workplace or building in order to turn a profit. As a landlord, it’s easy to get bogged down in the daily or monthly routine of paying rent. Even so, keeping this figure in mind is essential to profitability.
The rate per square foot
After determining break-even points, the operator can calculate the amount per square foot they need to pay for rent. Maintaining a competitive edge in your neighborhood and local market can be as simple as rating your workspace based on certain criteria.
Your business intelligence needs to be scrutinized
For a shared office to be successful, you must constantly evaluate your entire real estate and business profile. When you compare the amount of space and occupancy with the actual results, you can get a better idea of the liability and profitability of your business. When the market is performing well, it may be acceptable to ignore metrics and operate on a day-to-day basis, but when the market slows down, you may find yourself in trouble. For operators, metrics serve as an informed guide for the future.
In order to forecast revenue goals, monitor occupancy trends, and hold employees accountable for their work, workspace management software can provide valuable data. If you want to know how well your business center, coworking spaces, or overall portfolio is doing, it’s important to frequently review your data in graphs and charts.