All companies need to track, measure, and evaluate their performance to clarify and attain business goals. Coworking or shared office space enterprises are no different. However, the metrics and systems they choose to assess their success within their enterprise performance management strategy vary from more traditional business models. In this piece, David Mizne talks about measuring important KPIs for coworking spaces.
Initially, coworking space owners need to determine which metrics will provide them with the insights needed to take their companies further, spot areas for improvement, and illuminate opportunities for growth.
Let’s take a look at three of the primary key performance indicators (KPIs) recommended at the Coworking Europe Conference in 2016, and how they can be broken down to provide valuable business insights.
Regarding business performance, coworking space KPIs are relatively straightforward. Owners and managers should track and measure metrics that will expose their revenue and costs from a few different angles:
Each metric requires a slightly different formula: income per square meter will require total profits for a set period to be divided by the entire floor space of the coworking. Alternately, income per workstation requires the total revenue to be divided by the number of occupied workstations for a set period.
Robust tracking of occupancy and income related to floor space and workstations means calculating space occupied per square foot, working space use, and the like over multiple periods. Each coworking space will find some tracking methods – such as workstation use – give a better understanding of their weaknesses and strengths than the broader measurement of income per square meter. By tracking a number of different metrics for a few months, it will become apparent which provide the better insights and which can be discarded.
Many different tools enable coworking space managers to track these metrics automatically (Habu says it will be adding robust business intelligence tools soon). Regardless of the tool you use, reports should be run on a monthly, quarterly, or yearly basis, to give an overview of how the coworking space is performing, and information regularly investigated further to provide deeper insights about how to make the most of the business. Include frequent spot checks in between reporting to appraise and modify priorities as required.
Naturally, each coworking space is different. However, it stands to reason that most operators would begin to find good profitability at 80–85% occupancy rates.
Operational performance KPIs pertain to how members and irregular clientele use a coworking space. Operational KPIs are as individual as coworking spaces but should allow owners and managers to run their space smoothly from both technical and practical viewpoints.
They should also identify areas for improving functionality and continuous use based on the range and types of users. That is done by recording vital and relevant data and viewing the data in a graph, which you can do with coworking management software, or simply recording the data in excel and applying the necessary excel formulas to interpret the data pictorially.
Operational performance KPIs can be used to see:
Mapping these metrics will create a picture of use for managers and owners. They will enable the easy identification of areas and times in which different spaces are underutilized and provide insights into how this can be remedied.
A coworking space’s community is arguably one of the main strengths of the business model. The distinctive mix of different professions, backgrounds, workstyles, and ages using coworking spaces lends itself perfectly to diverse and dynamic working environments that encourage both collaboration and innovation.
As such, it is essential to monitor how communal areas are used and viewed by members. While it is difficult to measure community strength and resilience in coworking spaces, it is possible to track connections and member satisfaction. That should regularly be done through one or more of the following methods:
There is no one-size-fits-all when it comes to tracking KPIs in coworking space businesses. As such, it is essential to view your business through the suggested metrics and adapt where needed. That will assist you in garnering the necessary insights that help you continue to grow your coworking space and evolve with the rest of the industry.
Marketing Communications Manager at 15Five