According to Bloomberg, WeWork sales grew to $1.82 Billion in 2018 (double from 2017). However, WeWork’s losses also doubled to $1.93 Billion in 2018.
So, is #Coworking really a big game changer? If so, what are the economics of operating a Coworking space?
Utilisation has increased from <1 member per desk in 2017/18 to 1.2 members per desk by end of 2018.
Are Coworking spaces profitable?
Yes, However, there is a catch. According to DeskMag’s research, Globally, 80% of spaces with more than 200 members showed profitability quickly when compared to spaces with less than 200 members.
Key Expenses of Coworking spaces
For any space, the following is a typical breakup of monthly recurring expenses:
- Rent – 45%
- Operating Costs – 22%
- Sales & Marketing – 11%
- Salaries – 17%
- External Marketing – 5%
The big question – How to operate optimally?
Technology plays a very key role in creating the experience for members. Investing in the right technology framework for your space ensures that you traverse on the path to profitability quickly.
Technology is not only about automating workflows or consolidating reports, but about creating the experience for your members to feel personal and the offering personalised.
Any offering from Consumables to Transport are all based on Experience. Consumers are becoming increasingly aware and going for offerings which create an experience.
How to choose technology to upgrade experience
In the #Coworking world, Experience =flexibility and the ease of functioning within the space.
To create the right experience, technology should also be able to provide automation for the key workflows along with meaningful analytics.
Identifying objectives of using technology
While choosing technology, the space should first identify their operating model, the kind of space they wish to offer and what is the uniqueness of their offering?
- What is the objective of the space?
- How do we interact with the members?
- How do we control the service levels?- How can we create convenience to the members?
- How do we capture the right metrics to monitor the space?
- How do we monitor the financial health of the space.
- How do we monitor the infrastructure utilisation?
- How do we control the inventory?
- How can we market the space?
- How the technology we use help in sales?- Is the technology adaptable for us?
- Can the technology show Return on Investments (ROI)?
These are few questions with which one should start with before exploring any options.