While furnishing and decorating your space or thinking of a cool, catchy name can be a lot of fun, understanding what drives your members to join up is infinitely more vital to your growth. Taking care of the business side of things is not glamorous, but it is essential for ensuring the success and growth of your coworking community.
One of the most important decisions you have to make is how you design your membership levels. The right prices and formats will allow you to attract customers, generate a stable income, and grow your business.
We distinguish between two categories of coworkers: those working with a Membership (i.e. those who pay a fixed monthly fee, regardless of how much they actually use the space) and those using Time Passes (i.e. “pay-as-you-go” models).
The largest and most stable revenue stream often comes from members/coworkers on a recurring membership. This is important because the extent to which your space is occupied will vary throughout the year. Freelancers who set their own hours have a tendency to show up less frequently when it’s nice out or over the holidays. On the other hand, coworkers on recurring memberships tend to let their membership run even during down seasons, even when they’re not taking advantage of the space.
In order to get the most out of that lucrative, stable chunk of revenue you’ll want to drive intermittent users to become recurring members. In order to convince them to do so, you will need to offer memberships that fit the needs of your different groups of coworkers. Offer too few plans and potential coworkers will look for another place with a better fit. Offer too many plans and you’ll make it hard for coworkers to decide on any of them. Moreover, it will be a nightmare for you to keep track of! So, to be on the safe side, we’ve found 3 - 6 offered plans to be the sweet spot.
A Fixed Desk offers the most value to coworkers, which means that this type of setup can be charged at the highest fee. A fixed desk is reserved for one person, who can leave their personal belongings there. Whenever they come to the space, their fixed desk is waiting for them.
Having fixed desks can quickly generate quite a bit of revenue, but can also take a significant amount of your resources, namely space. Fixed desks cannot be shared with other coworkers, used by drop-ins or guests or be removed to make room for events. In addition, having a large part of your space consist only of fixed desks can result in stagnation and isolation, as the same people will continually be occupying the space. You then run the risk of inadvertently creating the atmosphere coworkers want to avoid, one of a stuffy, community-free office building. But that’s not why you got into this business!
A Flex Desk is a desk that is shared by multiple coworkers. Nobody has the right to one flex desk in particular but instead can choose from any flex desk available when they enter. A disadvantage to this is that people can’t store items at their desk, although that can be mitigated with lockers or rolling containers.
You can’t charge as much for a flex desk as for a fixed desk, but you can sell 15 flex packages off of 10 available desks. It’s economical to oversell your flex desks (just like airlines oversell seats on their flights) as people never fully use their memberships. In addition, because nobody owns these desks, you can move them around for events or just to experiment with your room layout; for example, we used to make different sized chunks of desks around our space to let our coworkers interact with new people and work on collaborations easier.
As with fixed desks, full-time plans gives your members the flexibility to work whenever they like and as much as they like, and your space a strong revenue stream. These plans don’t skimp on resources: they often include things like unlimited printed, access to a top-tier resource (like a larger room) or another amenity, plus greater ease of access.
Part-time plans are ideal for people who don’t need somewhere to work every day, but still want to benefit from the focused space, resources, and community that coworking spaces offer. They’re the ideal choice for folks who are just trying coworking out or are looking for a place to work when their desk at home becomes too noisy or monotonous. There are many reasons to work from a coworking space part-time, and it’s a good idea to tailor a couple of these options to cater to different profiles.
For example, consider a part-time plan with meeting room access for freelancers who are looking for a snazzy but professional environment to meet with their clients and partners.
Another member may be looking for a spot to work on a side project, and won’t want much more than a distraction-free place to focus in their hours after work. Helping them achieve their goals can also generate a win-win for your space: discounting off-peak hours can keep your space buzzing well beyond the hours of nine to five.
Not everyone will be looking for a place to work, so a community-dedicated plan is a great way to give people the same community benefits with an even lower cost of entry. Networking events, discussion groups, and skills development workshops are just a few of the things that can create value for the coworking unconverted, and for you.
Time Passes, or drop-in plans are the lowest level of commitment you can offer. At our own space we rarely used them and didn’t advertise these plans. They only marginally contributed to our revenue. This was by design: we wanted to funnel these drop-ins to becoming regular members, not the other way around.
The problem with day passes (or half-day or hourly passes) is that they eliminate the need for a membership. With a membership comes a sense of shared identity and ownership; with day passes, people never really belong to the community. Both from a business and a community point of view this is not desirable, so our advice is only to offer and promote the use of day passes if you have a good reason.
Some of our Cobot customers provide discounts on the purchase of multiple passes to quickly spur new drop-ins into thinking of themselves as a part of the community. However, you can also offer a “micro-plan” (such as our “3 days per month for 25 euros” plan) to create a very low barrier to entry for the same group that would be attracted to a bundle.
Free plans? Yes! If you are part of a network of spaces or you have initiatives to support interns, early stage entrepreneurs, or unemployed people; you may find that you want to offer free coworking plans.
Another option is something akin to a “Co-pass” or “Coworking visa.” This generally offers 3 free days of coworking to anyone who has a membership in any space that’s part of the program.
Some spaces have plans for unemployed people. They open their doors once a week and let those who are looking for a job do so from their space and have access to their network of members. This is a great idea to really bring your space into your community and when an unemployed person gains employment and is deciding on a permanent space later, they will not forget which community welcomed them when they needed help.
Check out our full collection of resources for starting up a coworking business. You can also read our blog and follow us on Twitter, Facebook or Instagram for more tips and news around coworking space management. You have additional questions or feedback? Suggest new topics at email@example.com.
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