There are pros and cons to increasing rent as a Coworking space operator. Members, or tenants of any kind, have come to expect rent hikes, and it tends to be the most common method of boosting profits. However, there is of course the very high probability you’d lose members with price hikes. Many will seek spaces who offer comparable amenities for a better price, in the same way a tenant would seek a new apartment to live in if rents spiked after a year.
What’s important is to capitalize on the inherent unwillingness of people to leave comfort. Moving to work in a new location changes commutes, daily habits, people you interact with, and general comfort levels. Outside of increasing rent, there are ways to increase profit while still keeping your members happy.
Partner up with local services in your neighborhood. Many operators have implemented a coffee stand run by a local shop in their center, space permitting. Even if you don’t have that kind of space, think of the countless partnerships you can explore.
Partner up with a local gym for discounts in your space for their members. You could have partnerships with restaurants in your area, or sponsor local events at bars or lounges as a way to attract new members. You could do promotions for all local (insert profession or hobby here) to receive a discounted month membership. These are suggestions that spaces of any size and shape can try. Trust the quality of your space and the word of mouth of your members will be enough to capture some of these discounted trials on a long term basis.
A la Carte Amenities
One of the biggest attractions to Coworking spaces is that they provide amenities most people cannot get from coffee shops or libraries or other public Wi-Fi areas. One way to increase your profit is to charge for some of these amenities a la carte.
In other words, the members will get Wi-Fi access and your kitchen should be stocked with snacks and drinks, but there are many amenities you can charge for. Printing on a monthly basis, adjustable standing desks, conference room usage, soundproof phone rooms, after hours events, and other common Coworking perks. Your base rent wont increase, and members can pay for what they want/need as they go.
One of the underrated aspects of going green in your Coworking space is its cost savings benefits. You will undoubtedly spend less long term, the more energy efficient your space becomes.
Some of the most cost effective methods of going green: auto thermostats, installing solar panels (high initial investment, but long term savings), using energy efficient bulbs, replacing printing with online docs as much as possible.
Overbook your Space
In the same way a gym can sell more memberships than its space will allot for, you can sell far more seats than you actually have. Given the logic that not every member will be in the office at the same time, and not all will be using the hot desks simultaneously, overbooking your space is a great way to increase profit.
Minimize Overhead Costs
How many manual tasks can you automate? There are countless hours of manpower lost due to tedious tasks that can be handled by automated workspace management platforms. From billing, to bookings, to marketing, to lead gen. Many tasks you would either hire someone to complete, or complete yourself can be streamlined now thanks to technology and automation.
Not to mention technology will help in member retention. More income continuing to flow in while you refrain from raising rents.
Aside from automation, consider revisiting any vendors you work with and any third party integrations you may be paying for. Can you seek better deals to reduce expenses? Can you eliminate some integrations altogether with an all inclusive platform?
All in all, there are many ways to increase your profit and/or minimize expenses. Explore all avenues before committing to raising rent. Not only will it increase member satisfaction, but you’ll also draw new members and run your space more efficiently. To find out how the new Yardi Kube can help you minimize costs and reduce integrations, click the link below.