4 foundational insights for expanding your coworking business

Growing a business can be the best of times and the worst of times. Here are four key factors for positioning your coworking business for successful growth.     

1.     Know your business - Know your financial ratios and how they compare to best-in-class operators in your market segment. Ratios such as -

• your rent bill as a percentage of gross revenue

• square meters allocation per workstation

• common area vs workstation area

• breakeven occupancy

provide key insights as to how to plan and optimise.

High performance business fuels profit and investment confidence which enable you to grow. If you need help with understanding ratios then join your industry association and ask the members, or pay for expert confidential advice.

2.     Grow sustainability - Don’t chase deals for the sake of growth. Fast growth always causes financial and operational strain on your business. Also, I often see operators take a space because the deal is good or because they are impatient to grow. Great space in a great location will always trump a sharp leasing deal or tantalising management agreement.

3.     Nail the product offering - Build with your target customer groups in mind. Customers see the location, the building and your space as a package deal and almost without exception your fitout needs to be commensurate with the setting. Know what the customer needs and wants and base your decisions around that. So, where the demand is for enclosed offices, natural light and great acoustic privacy, but you think you can’t afford to deliver against that demand then don’t take the lease.

4.     Recruit with your customer in mind – OK, there is a war for talent and that makes things hard at the moment, but I can’t tell you how many times I see front line staff and even centre management who are a poor fit for the target customer.

Related to this is the need to empower your teams to make decisions. Many of the types of businesses that are drawn to flexible workspace offerings want to be supported by empowered centre managers who can make quick decisions and know they have the backing of their manager/owner. In the Australian market, every operator that adopts remote command-and-control management systems is underperforming.