Thriving In Smaller Markets
Deciding on your unique selling proposition (USP) as a key aspect of every coworking business model means picking out what should work best in the area your facility caters for. With the increasing adoption of the coworking model, the number of potential USPs is increasing, making it possible for coworking space managers to either focus on just one of them or, even better, combine all of them as components of their preferred business model.
For starters, offering a fully functional workspace with no frills apart from shared services and quality internet connection can be a way to go here. Focusing on short lease periods and affordability can be easily combined with other USPs, such as designing those around clusters of users from the same sectors such as technology, education, health services etc. In this manner, people with similar professional backgrounds can share experiences and discuss their solutions to various shared problems.
Yet, there are benefits to having users from varied backgrounds in the same space as well. The key thing to understand here is that your most important USP will be the community itself, not just the coworking space it works in, or its pricing. Creating quality opportunities for your users to meet and learn from each other helps with both retaining customers as well as stimulating the income generation in the long run.
Membership fees will serve as the main revenue stream, together with the services and amenities you provide in partnership with local businesses, such as caterers, gyms, technical equipment providers etc. In order to extract the best value out of this model, you’ll have to design various packages for membership and subscriptions. They can be organized around time intervals, such as hours, days, months or years, with the available proposition to lower the fees as the interval in question is longer, as a sort of a loyalty reward. Similar benefits can be offered for group memberships, where several users book the space together. Your coworking space can also generate revenue from leasing space for dedicated events, such as conference rooms.
While coworking business models usually do not come with high initial investments (unlike those in real estate sector) there are some cost drivers you should be on the lookout for. First of all, the upfront costs include paying for construction work, furniture procurement and equipment installation, setting up an IT system and network capacities, engineering works etc. In addition, you should consider administrative expenses as well, including those relating to the legal side of things and having quality staff in the field.
Once the model gets going, be prepared to account for operative costs related to rent, utilities and maintenance, including the relevant property taxes. Similarly, you should plan for investing in marketing and advertising as well as providing the framework budget for future expansion and renovation of the coworking facilities.
Designing quality website is a no-brainer when identifying relevant marketing channels for your coworking space. Just remember to plan for having it done by professionals. While coworking spaces are often seen as being all about affordability, there is no reason for your website to look cheap.
In our day and age, these efforts need to be accompanied by having a sound social media strategy in place as well. Make sure you use all the relevant media (not just Facebook and Twitter) for your targeted audience depending on their demographics. Do not ignore email marketing or newsletters, as there are trusted workhorses of any marketing effort. One of marketing channels to focus on can be the community of travelers and commuters who are always on the lookout for an affordable place for work. Just drop a flyer or poster or two in popular hotels, airports and taxi hubs.
Finally, never forget your existing customers as a “hidden” marketing channel you cannot afford to ignore. They can be offered additional membership benefits for all invites and referrals they direct at potential customers of their choosing and thus help you spread the word about your business at no additional cost.
Having a coworking space gives you an opportunity to create business synergy with various local partners, as your entire business model rests on the idea of community. Get in touch with local food and drink providers and have them promote their business and offer your customers access to coffee, refreshments, snacks etc. The same goes for dedicated space for fitness and exercise. You can also enter a partnership with local restaurants or fast food joints to have them host dedicated events and promotions in your space.
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