While furnishing and decorating your space or thinking of a cool, catchy name can be a lot of fun, understanding what members really look for in a coworking community is absolutely vital. Taking care of the business side of things is essential for ensuring the success and growth of a 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 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 biggest and most stable revenue stream usually comes from members/coworkers that have a recurring membership. This is important because the extent to which your space is occupied will vary throughout the year. Freelancers who can work (or take time off) whenever they want have a tendency to show up less frequently when temperatures go up outside or over the holidays. On the other hand, we have found them to generally keep the same membership (and pay for it) even if they don’t use it as often during a certain period.
So in order to get the most out of that lucrative, stable chunk of revenue you will want as many of your members as possible to buy a membership. In order to convince them to do so, you will have to offer memberships that fit the needs of your different groups of coworkers, while keeping it simple. Offer too few plans and coworkers will look for another place that better fits their needs. Offer too many plans and you’ll make it hard for coworkers to figure out the difference and choose the most suitable option. Moreover, it will be a nightmare for you to keep track of! So, to be on the safe side, be sure to limit your offer to 3 - 6 different plans.
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 personal belongings on it. Whenever they come to the space, their fixed desk is there waiting for them.
Having a bunch of fixed desks can quickly generate quite a bit of revenue, but also takes up 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 creating an old-school office with fixed structures instead of a coworking space that promotes meeting new people and setting up collaborations.
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 still empty upon entering your space. A disadvantage to this is that people will have to clean up their desk when they leave, 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 if you have 10 flex desks you can sell 15 memberships for those. From our experience you can easily 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. Even the coworkers themselves can do that to accommodate for changing needs, for example when they temporarily work together on a project. We have had some good success with putting single desks together to form large desks that seat 4-6 people. This encourages people to talk to each other, which is especially important for new members.
Another way to differentiate your membership levels is by the amount of time people spend in your space. While some people want to have a workplace they can come to each and every day, we have found that many freelancers prefer to work from home or from their client’s offices from time to time. Some will even work at other coworking spaces. You might even want to encourage this, as it can help to avoid your coworkers getting that monotonous ‘nine-to-five’ feeling, which might result in some of them leaving your space just for a change of wallpaper. Better a part-time member than a member lost. Another group to consider is that of students who might not have the money to pay a few hundred per month or people with a regular job who don’t have enough time and will only visit your space occasionally. In the interest of a stable income, you will want to offer each group a membership that suits them.
The first and obvious choice is offering a Full-time Package that allows people to work at your space as much as they want – during opening hours (we’ll deal with 24/7 access in another post further on in the series). Obviously, you can charge the most for full-time access, so that’s a good plan to have. From our experience, people who have this membership will still not show up every day, so you don’t have to stop selling these after you have sold one for every desk you have.
One step down from a full-time membership is the Part-time Plan. This is especially suitable for the group that works from home or visits their clients from time to time. In our own space this was by far the largest group and even though they paid only half as much as the full-timers, they contributed the largest chunk of our revenue. Therefore, these were actually our most important customers. You can offer part-time plans for mornings/afternoons or for a number of days per month.
Time Passes, or Drop-in plans are the lowest level of commitment you can offer. At our own space we only used them for people just passing through.They only marginally contributed to our revenue, which is of course by design as we tried to encourage people to get a membership.
The problem with Day Passes (or Half-day or Hourly Passes) is that they eliminate the need for a membership. With a membership people become members of your space, which implies that they will visit from time to time and are charged for this on a regular basis. With Day Passes people do not really belong to the community. Day passes are a one-time purchase, much like a train ticket. Once you have taken the ride it’s over, after which it requires a specific decision and action to go for another. Both from a business and a community point of view this is not very desirable, so you are advised only to offer and promote the use of day passes if you have good reason to do so. Some of our Cobot customers provide discounts on the purchase of multiple passes, which already creates more urgency to come visit again. However, offering a small membership plan (such as our ‘3 days per month for 25 euros’ plan) mostly works better for convincing people to keep returning to your space.
If you are part of a network of spaces or you have initiatives to support interns, early stage entrepreneurs, or unemployed people; you may want to offer free coworking plans.
Another option is 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.
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