From Hustle to Results: Mastering the Top 8 KPIs for Coworking Spaces

Ever wondered what sets high-flying coworking spaces apart from the rest? Buckle up because we're diving into the secret sauce that propels these spaces from mere hustle to tangible results.

Picture this: in 2023, a staggering 91.9% of organizations hit paydirt with their data and analytics investments. What's more? Three out of every five organizations tapped into data analytics to spark business innovation. Now, that's not just a statistic; it's a testament to the power of metrics and insights.

In our journey from hustle to results, we're about to unravel the top 8 KPIs (Key Performance Indicators) that transform coworking spaces into thriving ecosystems of productivity and collaboration. Get ready to unlock the keys to success and supercharge your coworking business game!

 

Efficiency Mastery Metrics

 

1. Occupancy Rate

 

What is the Occupancy Rate?

Occupancy Rate is a business owners' compass in the bustling sea of desks and private offices. It's the percentage of occupied workspaces compared to the total available in your coworking oasis. In simple terms, it's a snapshot of how much of your space is buzzing with activity at any given time.

 

Why It's Vital to Measure

1. Smart Business Moves: Think of Occupancy Rate as your compass in the coworking business wilderness. With it, you'll make savvy decisions on pricing, layout, marketing, and growth.
2. Cash Flow King: This little metric directly impacts your bottom line. Nail it, and you're optimizing income and keeping costs in check like a pro.
3. Trend Spotter Extraordinaire: Watch as Occupancy Rate unveils trends and opportunities you never knew existed. It's like having a crystal ball for your coworking future.
4. Happy Campers: Last but not least, keeping tabs on occupancy ensures your members have the space and amenities they need to thrive. Happy members mean a thriving coworking community.

 

How to Crunch the Numbers

Let's roll up our sleeves and dive into the nitty-gritty of calculating your Occupancy Rate. Don't worry, folks, it's as simple as brewing your morning joe. Here's the lowdown:

The Basic Formula:

Occupancy Rate = (Number of Occupied Units / Total Number of Units) * 100%

What the Terms Mean:

• Occupied Units: This is the number of desks, conference rooms, or seats currently filled in your space.
• Total Number of Units: This represents the total capacity of your coworking haven.

Example:

Imagine you've got a cozy coworking spot with 50 hot and dedicated desks up for grabs. One fine day, you count 38 desks occupied. Here's how you crunch those numbers.

Calculation:

1. Divide occupied desks by total desks: 38 desks / 50 desks = 0.76
2. Multiply by 100 to get the percentage: 0.76 * 100% = 76%
3. So there you have it! Your occupancy rate for that day is a solid 76%.

Your Turn:

Calculate your Occupancy Rate with our template

Important Notes:

• Timeframe: You can calculate occupancy for different timeframes—be it daily, weekly, or monthly. Just remember to stay consistent for accurate comparisons.
• Type of Occupancy: Depending on your setup, consider different types of occupancy, like dedicated desks occupancy versus meeting room occupancy.

Effortless occupancy tracking on Spacebring app

 

Understanding Your Occupancy

So, how do you know if your occupancy is hitting the sweet spot? Here's the lowdown:

• If you're clocking in at 70-80%, you're in the cozy zone. It's a healthy range balancing revenue and member experience.
• Hit 80-85%, and you're cruising into success territory. Strong demand means potential for revenue growth.
• But hey, watch out if you're soaring above 85%. It could mean your space is feeling a tad crowded, which might affect member satisfaction. Keep an eye on it, especially if you're aiming for those high-pricing tiers.

And hey, speaking of benchmarks, take a cue from the big guns like WeWork and IWG. They're setting the bar high with their occupancy rates. 

WeWork's hitting a cool 72% in Q2 2023, while IWG's holding steady at 73.5% in Q3 2023.

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2. Revenue Per Available Desk (RevPAD)

 

What is RevPAD?

RevPAD, similar to RevPAR in the hotel biz, is your coworking space's financial MVP. It's the dough each desk brings in, whether it's buzzing with activity or taking a breather. But hey, it's not just a number; it's the pulse of your financial game plan, showing you how well you're turning square footage into sweet, sweet cash. 

 

Why It's Crucial to Measure

Now, why should you give a hoot about RevPAD? Well, my friend, it's the North Star guiding you through the financial wilderness. By knowing your RevPAD, you're not just playing with numbers; you're wielding financial foresight. It's like having x-ray vision into your revenue streams, helping you make savvy decisions and steer your ship towards profitability.

 

How to Crunch the Numbers

Let's dive into the nitty-gritty. First things first, you need to decide on your analysis timeframe—whether it's daily, weekly, monthly, or quarterly. Consistency is key here for making accurate comparisons over time.

Once you've got your timeframe sorted, it's time to gather the necessary data:

• Total Revenue: Add up all your income sources, from regular to virtual memberships to meeting room rentals and beyond.
• Total Available Desks: This represents the maximum capacity of your workspace, showing how many desks could potentially be filled.

Now comes the fun part—calculating RPAD

RPAD = (Total Revenue / Total Available Desks)

For example:

1. Let's say we're looking at a month.
2. Your Total Monthly Revenue: $20,000
3. Total Available Desks: 100
4. Doing the math: $20,000 / 100 desks = $200 RPAD
5. So, what does this mean? It means you're pulling in an average of $200 per desk in your coworking space every month.

Your Turn:

Calculate your RPAD with our template

Remember to keep a few things in mind:

• Desk Diversity: If you've got different types of desks—like private offices and flexible workspaces—consider crunching RPAD separately for each to capture any revenue variations.
• Empty Desk Exclusion: RPAD takes unoccupied desks into account, making it a powerful tool for assessing revenue efficiency.

Getting your RevPAD squared away is as smooth as your morning espresso routine (or as easy as a tap on our sleek app's 'Payments' button). Just tally up your total revenue (Payments) and divide it by the number of desks in your space. With Spacebring KPI dashboard in your corner, keeping tabs on this vital metric is a breeze, giving you instant insights into how your workspace is stacking up financially.

 

Putting it into Practice

Let's put RevPAD under the microscope and see what's cooking.

Industry Averages? 

Hmm, a bit of a gray area. RevPAD's like a chameleon, blending in with its surroundings. But fear not! You can sleuth around coworking resources, snoop on local competitors, or cozy up with fellow space managers to sniff out some benchmarks.

Now, how's your RevPAD stacking up? 

Keep tabs on your own numbers like a hawk, and don't forget to consider your space's vibe. Is it all about luxury lounges or budget-friendly basics? That'll shape your RevPAD dreams.

And if your RevPAD's feeling a bit down in the dumps? 

Don't panic! Dive deep into the causes. Tweak your pricing, amp up your marketing costs, or sprinkle some extra sparkle on your offerings.

But hey, remember: RevPAD isn't the whole shebang. Keep an eye on your occupancy, member churn rate, and, most importantly, member experience. After all, sustainable growth is the name of the business plan.

 

3. Monthly Recurring Revenue (MRR)

 

What is MRR?

Let's dive into the heart of the matter: Monthly Recurring Revenue, fondly known as MRR. This little powerhouse is the backbone of subscription-based big and small businesses, from tech titans to membership mavens. It's the reliable cash flow that fuels your operation day in and day out. And for coworking spaces with their business objectives set on the long game, MRR is the magic potion that keeps the dream alive.

 

Why It's Crucial to Measure

Let's talk MRR—your business's financial heartbeat. Here's the lowdown:

• Predictability: It's like your revenue crystal ball, forecasting future earnings.
• Growth Tracking: Shows how fast your business is kicking into gear.
• Churn Identification: Pinpoints where you need to tighten up to keep customers onboard.
• Financial Health: Guides smart informed decisions on where to invest and where to save.
• Investor Appeal: Strong MRR? Investors are knocking, seeing a sustainable business model.

In a nutshell, MRR is your compass in the revenue wilderness, steering your ship toward success.

 

How to Track the Flow

Let's talk turkey. Tracking your MRR is as easy as pie (or as easy as clicking a few buttons on our trusty app). Simply tally up all your recurring revenue streams for the month—that's your MRR. With our app, it's a breeze. Boom! You've got yourself a snapshot of your financial stability, ready to steer your ship through calm seas and stormy weather alike.

Comprehensive data on membership plans available on Spacebring platform at a glance.

Don’t have Spacebring app yet? Here's the lowdown:

Basic Formula:

MRR = Number of Paying Customers * Average Revenue Per User (ARPU)

Breaking It Down:

• Paying Customers: Your active subscribers for the month.
• ARPU: Average revenue earned from each customer monthly.

Crunching Numbers:

1. Example: You've got 500 paying customers.
2. Your monthly revenue? A cool $25,000.
3. ARPU: $25,000 / 500 customers = $50 ARPU
4. MRR: 500 customers * $50 ARPU = $25,000 MRR

Your Turn:

Calculate your MRR with our template

Keep It Clean

• Exclude one-time fees for true recurring revenue.
• Types of MRR: Track new, expansion, and churn MRR.
• Timeframe: Stick to monthly for consistent comparisons.

 

Putting it into Practice

Let's decode this MRR puzzle and see where you stand.

Is your MRR hitting all the right notes? 

Well, there's no one-size-fits-all answer. It's like comparing apples to oranges, depending on your biz stage, industry, financial and business goals. Keep an eye on that growth trajectory, and don't forget to peek at what the cool kids in your niche are up to.

Now, if your MRR's playing hard to get, don't sweat it. Time to play detective! Pinpoint the culprits—low acquisition, poor conversion rate, leakages in your sales funnel, pesky member churn, or maybe your pricing needs a facelift.

But hey, don't just sit there! Take action! Amp up your customer lifetime value, play around with pricing like a mad scientist, and sharpen those marketing chops.

And remember, Rome wasn't built in a day. Keep tabs on your MRR journey, and before you know it, you'll be riding the wave of success like a pro.

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4. Average Revenue Per User (ARPU)

 

What is ARPU?

ARPU is like having your own financial radar, tuning into the cash flow from each member beyond just snagging a desk. It's the secret sauce revealing how much your members are splurging on those extra perks and add-ons, transforming your coworking hub into the ultimate hangout.

 

Why It's Crucial to Measure

Alright, folks, why should you give a hoot about it, you ask? Well, business owners, hold onto your hats because here's the lowdown: ARPU is your golden ticket to unlocking the full financial potential of your space. It's not just a number; it's a peek into your members' spending habits. By keeping an eye on ARPU, you're not just crunching numbers; you're squeezing every drop of revenue out of every square foot of your space. It's like having a backstage pass to your members' wallets, helping you fine-tune your offerings and turbocharge your bottom line.

 

How to Crunch the Numbers

Let's break it down, shall we? Crunching your ARPU is as easy as pie (or as easy as a few clicks on our handy-dandy app). Just take the total sum of all non-workspace payments—that's your revenue from add-ons like conference rooms rentals, printing services, workshops, and more—and divide it by the total number of active users.

Here's the basic formula:

ARPU = Total Revenue / Number of Paying Users

What you'll need:

1. Timeframe: Choose a period (usually monthly)
2. Total Revenue: All revenue generated from non-workspace payments in that period
3. Paying Users: The total number of active customers who made payments within that same period.

For example:

Let's say in one month, your total revenue from non-workspace payments is $10,000, and you have 200 active paying customers.

Calculation:

ARPU = $10,000 / 200 customers = $50 ARPU

Bingo! You've got yourself a nifty little figure that tells you just how much bang you're getting for your members' buck.

Your Turn:

Calculate your ARPU with our template

 

Putting it into Practice

Let's decode the ARPU puzzle and unlock its potential.

Is your ARPU on cloud nine? 

Well, there's no universal magic number. It's like comparing a surfboard to a skateboard—depends on your groove, your crowd, and where you're headed financially, your business plan. Keep tabs on that upward slope and see how you stack up against your scene mates.

Now, if your ARPU's feeling a bit camera-shy, no worries. Time to put on your Sherlock hat! Find the clues—maybe your price tags need a makeover, or you're not vibing with the right crowd.

But hey, no time to twiddle your thumbs! Take the reins! Flaunt those VIP perks, toss in some sweet deals, and show your crew why they're getting the VIP treatment.

And remember, it's not just about the bottom line. It's about dazzling your crew, curating an irresistible experience, and making them feel like they're part of something truly extraordinary.

Event showcase and Shop on Spacebring app.

 

Member Vibes and Commitment Metrics

 

5. Net Promoter Score (NPS)

 

What is NPS?

Net Promoter Score (NPS) is your go-to metric for gauging member satisfaction and loyalty. It's like having your own personal cheer squad, rooting for your coworking space, and spreading the word to their friends and colleagues, aka your prospective new clients. NPS is the litmus test that tells you just how likely your members are to sing your praises and recommend your space to others.

 

Why It's Crucial to Measure

Let's cut to the chase. Measuring Net Promoter Score (NPS) is like having a compass guiding you toward growth and member happiness. NPS isn't just a number; it's the pulse of your community. By tuning into NPS, you're not just gathering data; you're nurturing relationships and paving the way for future success. It's like having a crystal ball into your space's growth trajectory, pointing you towards a brighter, more prosperous future.

 

How to Gauge Member Sentiment

Let's dive into the world of NPS (Net Promoter Score) and how to gauge member sentiment.

Step 1: Pose the Question

Throw out this simple query to your members: "On a scale of 0-10, how likely are you to recommend our coworking space to a friend or colleague?"

Step 2: Gather Responses

Utilize our trusty Feed feature on Spacebring to easily collect responses via Google Forms.

Step 3: Sort the Feedback

Segment the feedback into three neat categories:

• Promoters (9-10): These are your space's biggest fans.
• Passives (7-8): They're content but not jumping for joy.
• Detractors (0-6): Keep an eye on these folks; they're not quite satisfied.

Step 4: Crunch the Numbers

Calculate your NPS by subtracting the percentage of Detractors from the percentage of Promoters.

NPS = (% of Promoters) - (% of Detractors)

For instance, if you have 50% Promoters and 20% Detractors, your NPS clocks in at a solid 30.

Your Turn:

Calculate your NPS with our template

Bonus Tips:

• Remember, NPS scores range from -100 to +100, providing insight into the overall sentiment.
• Consider asking additional open-ended questions to dig deeper into member feedback.
• Keep tabs on your NPS regularly to track progress and improvements.
• With Spacebring' Feed feature, measuring your NPS is as easy as hitting send and watching the insights roll in. It's like having your finger on the pulse of member satisfaction, guiding your space towards continuous growth and success.

 

Putting it into Practice

Let's unpack what makes a stellar NPS and how to tackle it if it's not quite where you want it to be:

What Defines a Stellar NPS?

Well, there's no one-size-fits-all answer here. NPS success varies depending on your industry and the size of your operation. Key benchmarks are your buddies: Research average NPS scores in your industry to set realistic business goals.

But generally speaking:

• Anything above 0 is a good start, showing more promoters than detractors.
• Shoot for the stars with scores above 50, and if you hit 70 or above, you're in world-class territory.

What to Do If Your NPS Falls Short

No need to hit the panic button just yet! A low NPS is more of a signpost than a roadblock. It's your cue to kickstart some serious improvement efforts.

Here's the game plan:

1). Dive Deep:

• Analyze detractor feedback for common themes or pain points.
• Segment NPS by customer type to spot any patterns.

2). Tackle the Root Causes:

• Fix product or service issues pronto.
• Amp up your customer support game.
• Communicate clearly and transparently with your members.

3). Reach Out to Detractors:

• Personally connect with them to understand their concerns.
• Show your commitment to resolving their issues, even if it takes some time.

4). Prioritize Customer Experience:

• Remember, NPS is about the entire member journey, so make sure every touchpoint screams excellence.

5). Some Final Thoughts:

• Track your NPS over time to gauge the effectiveness of your actions.
• Customer feedback is your secret weapon, so encourage detailed comments along with NPS ratings for juicy insights.

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6. Churn Rate

 

Understanding Churn Rate

Churn rate is a critical metric that measures the percentage of members who cancel their memberships over a specific period. A high churn rate indicates that members are leaving your coworking space at a faster rate than you're acquiring new clients, which can negatively impact your business's financial health and sustainability.

 

Why Churn Rate Matters

• Financial Impact: High churn rates can lead to decreased revenue and increased costs associated with acquiring new members.
• Customer Satisfaction: A high churn rate often signals that members are dissatisfied with your space or services.
• Business Sustainability: A consistently high churn rate can threaten the long-term viability of your coworking business.

 

How to Calculate Churn Rate

To calculate your churn rate, follow these steps:

1. Determine your time period: Choose a timeframe for analysis, such as quarterly or monthly basis.
2. Identify new members: Count the number of new members who joined your space during the chosen period.
3. Identify lost members: Count the number of members who canceled their memberships during the same period.
4. Calculate churn rate: Divide the number of lost members by the total number of members at the beginning of the period.

Churn Rate = (Lost Members / Total Members at the Start of the Period) * 100

Example:

If you had 100 members at the beginning of the month, and 10 members canceled their memberships, your churn rate would be 10% (10 lost members / 100 total members).

 

Putting Churn Rate into Practice

• Set benchmarks: Establish a target churn rate for your coworking space. For instance, 5-7% annual churn is considered acceptable for a subscription-based business. This will help you track progress and identify areas for improvement.
• Analyze churn reasons: Conduct surveys or interviews with members who have churned to understand their reasons for leaving. This information can help you address underlying issues and improve member retention.
• Implement retention strategies: Develop strategies to keep members engaged and satisfied, such as offering discounts, providing additional amenities, or organizing community events.
• Monitor churn rate regularly: Track your churn rate over time to identify trends and assess the effectiveness of your retention efforts.

How to Turn Coworking Members Into Brand Advocates

 

7. Retention Rate

 

Understanding Retention Rate

Retention rate is a critical metric that measures the percentage of members who remain active in your coworking space over a specific period. A high retention rate indicates that members are satisfied with your space and services, and are likely to continue their membership.

 

Why Retention Rate Matters

• Financial Impact: A high retention rate can lead to increased revenue and reduced costs associated with acquiring new members.
• Customer Satisfaction: A high retention rate is a strong indicator of member satisfaction and loyalty.
• Business Sustainability: A consistently high retention rate can contribute to the long-term success and growth of your coworking business.

 

How to Calculate Retention Rate

To calculate your retention rate, follow these steps:

1. Determine your time period: Choose a timeframe for analysis, such as monthly or quarterly.
2. Identify members at the beginning of the period: Count the number of members who were active at the beginning of the chosen period.
3. Identify members at the end of the period: Count the number of members who were still active at the end of the period.
4. Calculate retention rate: Divide the number of members at the end of the period by the number of members at the beginning of the period.

Retention Rate = (Number of Members Retained / Total Number of Members at the Beginning of the Period) * 100

Example:

If you had 100 members at the beginning of the month, and 90 members were still active at the end of the month, your retention rate would be 90% (90 active members / 100 total members).

 

Putting Retention Rate into Practice

• Set benchmarks: Establish a target retention rate for your coworking space. A good retention rate for a coworking space is generally considered to be above 90%. This will help you track progress and identify areas for improvement.
• Analyze member feedback: Use surveys, feedback forms, and one-on-one conversations with members to gather insights into their satisfaction and identify areas for improvement.
• Implement retention strategies: Develop strategies to keep members engaged and satisfied, such as offering discounts, providing additional amenities, or organizing community events.
• Monitor retention rate regularly: Track your retention rate over time to identify trends and assess the effectiveness of your retention efforts.

 

8. Average Membership Duration

 

What is Average Membership Duration?

Let's get down to brass tacks and talk about Average Membership Duration. This little metric is the heartbeat of your coworking community. It tells you how long your members are hanging around, giving you a peek into their satisfaction and how sticky your space really is.

 

Why It's Crucial to Measure

So, why does it matter?

First off, it's your secret weapon for spotting churn. If memberships are flying out the door faster than you can say 'coworking,' it's a sign something might need fixing.

Secondly, it's your crystal ball for financial forecasting. Knowing how long members tend to stick around helps you predict future revenue and how much each member is worth to your space.

And lastly, it's your playbook for retention strategies. If you've got members hanging around longer than a summer fling, you must be doing something right. Use that intel to keep the good vibes flowing and the community thriving.

 

How to Measure and Understand

Let's dive into measuring your Average Membership Duration (AMD). It's not as daunting as it sounds, trust me.

1. First things first:

• Define your Time Period: Pick a timeframe, like the past year or quarter, to analyze.
• Gather your Membership Data: Get those start and end dates for each active membership during your chosen period, and count how many memberships you had.

Community directory on Spacebring coworking space management platform.

2. Crunch the Numbers:

• Subtract the start date from the end date (or current date if still active) for each membership to find its duration.
• Add up all those durations.
• Divide the total by the number of memberships.

AMD = (Sum of membership lengths for all members / Total number of members)

Example Time!

Let's say you're looking at the past year and had 100 active memberships.

AMD = 720 months / 100 memberships = 7.2 months AMD

After doing the math, you find the average duration is 7.2 months. That means, on average, members stuck around for about 7.2 months over the year.

Just remember to keep your records accurate and track AMD over time to spot any trends. Easy peasy!

Your Turn:

Calculate your AMD with our template

 

Putting it into Practice

Let's dive into the nitty-gritty of Average Membership Duration (AMD). Now, there's no one-size-fits-all rule here; it's all about context.

Consider these factors:

• Your Business Model: Different strokes for different folks. Subscription-based businesses thrive on longer AMDs, while others may vary based on their offerings.
• Pricing Structure: Low-cost memberships might lead to shorter AMDs, while premium services often boast longer commitments.
• Industry Norms: Benchmarking against similar services helps gauge where you stand.

Now, what if your AMD isn't quite where you want it to be?

1). First, dig into the reasons behind it:

• Are customer expectations crystal clear?
• Is your onboarding process smooth sailing?
• Does your product or service hit the mark for your target audience?

2). Then, focus on retention strategies:

• Keep adding value over time.
• Ramp up engagement efforts.
• Consider incentives for longer commitments.

And remember, it's not just about making your AMD longer; it's about ensuring your members are happy and satisfied along the way.

So, whether your AMD is soaring or could use a boost, keep striving for that sweet spot where members stick around because they want to, not just because they have to. That's the secret sauce to building a thriving community.

 

Mastering KPIs for Your Coworking Space

Phew, we've covered a ton of ground today, folks! We've delved into the world of KPIs - those magical key metrics that hold the key to unlocking success in your coworking space. But here's the thing: amidst the sea of data points and analytics, it's easy to get lost in the shuffle.

Sure, there are countless KPIs out there vying for your attention, but let's not lose sight of the forest for the trees. The key is to focus on the most essential metrics, the ones that truly move the needle and drive growth in your business performance. Whether it's occupancy rates, revenue per desk, or average membership duration, these are the numbers that matter most.

And hey, here's the kicker: tracking these key metrics doesn't have to be a headache. Nope, not when you've got a handy-dandy coworking space system like Spacebring with its smart kpi dashboard at your fingertips. With our sleek platform, you can effortlessly monitor your key performance indicators, gain valuable insights, and steer your big or small businesses towards success.

But hey, maybe you're thinking, "I don't have a coworking space system. What do I do now?" Well, fear not, my friend! Just schedule a demo call with one of our product experts, and we'll show you firsthand how Spacebring can simplify your life, streamline your operations and sales funnel, boost your conversion rate, and catapult your space to new heights of success.

So there you have it, fellow coworking aficionados. Focus on the essentials like following your business plan and tracking your KPI dashboard religiously, and let Spacebring be your trusty sidekick on the road to reaching your ambitious business objectives. Here's to growth, success, and endless possibilities!