For coworking space owners, the goal is typically to reduce operating costs while continuing to provide an optimal and unique member experience. What owner wants a tradeoff between cost-cutting and customer service. Fortunately, there are several tools that can help you manage your finances better and maximize efficiency at your workspace—all without compromising on providing a quality coworking experience for members. In this blog post, we'll discuss proven methods for reducing operating costs in your coworking space so you can stay competitive in today's market.
10 Tips to Reduce Your Coworking Space Overhead
Maintaining a coworking space can be expensive; you will need to pay a premium for a stable Internet connection, spend money on regular maintenance, and provide amenities that will keep your clients coming back. Surely, there are ways to reduce your expenses, right? Well, here are ten useful tips to help you out:
1. Evaluate your coworkers' needs
Before making decisions about what you need and don't need for your space, take the time to review and assess your current situation. This calls for an understanding of your audience— know who they are, their preferences, and what they need your space for. Are they customer support folks who need a quiet corner and access to a stable Internet connection? Or are they programmers and developers who need an environment that helps them focus and concentrate on the work?
There are many other instances, but in any case, you will need to figure out what you need to attract and keep your target audience. In doing so, you should be able to identify areas where costs can be cut and allow you to focus on those that are necessary for running a successful workspace.
2. Assess your current space and see where you could make cuts
It's very easy to fall into the bad habit of simply spending money without evaluating where it's going. Take a step or two back and assess your current space. Are there any areas that are not being used? Are there any services or amenities that could be scaled back? Could you downsize to a smaller space if needed? By understanding your current setup, you'll be able to identify areas for improvement and make well-informed decisions about how to save money in the long run.
Now, this does not mean that you will have to cut corners and end up offering subpar service to your coworkers. Instead, you could try to find alternative solutions—such as offering digital amenities that don't require additional overhead—and choosing the best options that align with your business model.
3. Review your membership plans and pricing structures
Take a second look at how much you are charging members and how they are billed. Are you offering subscription packages that make it easy for coworkers to join? Do your members feel their fees are a good value for the services they receive?
Also, consider whether there is room to adjust the pricing or offer discounts on longer-term contracts to incentivize members to stay with your space longer and pay more upfront. If you are looking to increase occupancy, try offering discounts for a certain number of months or giving away free services that your members will appreciate and help to retain their loyalty.
4. Negotiate a lower price with your current suppliers—or find a better deal
If you have been using the same vendor for a long time, it's worth considering negotiating for better terms. In particular, you may get a lower price if you can commit to longer-term contracts. Additionally, shop around and compare prices between competitors to see what other deals are available.
It's also important to ensure that you are getting the best quality for the lowest cost. You don't want to cut corners by selecting a cheaper option that is not up to par with what your members need. Also, if you're going to shift to a different supplier, make sure to check reviews and ask for references from existing customers to get an honest opinion about the quality of their services.
5. Invest in energy-efficient equipment
Going green is not only great for the environment; it's also good for your bottom line. Investing in energy-efficient equipment can help you save over time, as these pieces of technology use less electricity and don't require a lot of maintenance. Not to mention, they will provide a pleasant working environment for your members since they are quieter and more comfortable than traditional equipment.
Start with your lights by switching to energy-efficient LEDs. You may then give your ventilation, air-conditioning, and heating an upgrade by installing better systems that use less energy. Finally, consider investing in solar panels or other renewable energy sources to reduce your electricity bills.
If you're strapped for cash, consider renting or leasing new energy-efficient equipment instead. This way, you can keep up with the latest money-saving technology and still save money in the long run.
6. Cut back on the utilities
Utility bills can make up a huge chunk of your coworking space overhead, so be sure to review them regularly and look for ways to save. Start by switching your energy provider if you can find a cheaper one, and then consider installing solar panels or other sources of renewable energy.
You may also want to consider using automated systems that turn off lights, appliances, and other devices when not in use. Automation will help save energy costs and reduce labor costs, as you won't need to manually turn off everything at the end of the day.
You should also take advantage of natural light to reduce overhead costs. Use windows, skylights, and other natural sources of light whenever possible, and invest in blinds or curtains to control the amount of sunlight that enters your space on sunny days.
7. Charge for extras
Set up other income-generating streams in your coworking space. For instance, you can install printers or set up an exclusive conference room and charge for their use. Other ideas include setting up vending machines, offering copies and printing services, or renting out an event space. However, be sure to keep the coffee free, as well as every other freebie that attracted your coworkers to your space in the first place.
You can also introduce a membership tier system that offers different levels of access to your coworking services at different prices. This will help increase your revenue and make you more competitive in the market. You may also want to consider offering extra services, such as on-site childcare or access to digital resources like email verification tools and charge accordingly.
8. Streamline your business systems
Finally, look for ways to streamline your business systems. Automate as much of the day-to-day operations as possible to save time and money. Invest in a reliable coworking management system or an online sales platforms that will help you manage bookings, memberships, payments, and other administrative tasks quickly and efficiently.
You may also want to consider outsourcing certain tasks to more specialized professionals like bookkeepers and virtual assistants. This will help you focus on growing your business, while still keeping things running smoothly in the background.
9. Put a cap on your purchases
You may be tempted to go on a shopping spree when it comes to office supplies and equipment, but it's important to set a budget and stick to it. Make sure you know what your members need and prioritize those items first.
It can also help to buy in bulk whenever possible. This should get you more bang for your buck, as well as discounts from suppliers. You can also look for second-hand or refurbished items, which may be just as good but cost much less than brand-new ones.
Finally, take advantage of sales and other promotions offered by your suppliers. This way, you can get a great deal without breaking the bank.
10. Reuse or recycle
If you're looking to save money, make sure you take full advantage of the items already in your space. Reuse supplies whenever possible and recycle any materials that can no longer be used. This will help reduce waste and save costs at the same time.
Try to find creative ways to reuse old furniture or other items by giving them a fresh coat of paint, recovering them with a new fabric, or upcycling them into something else entirely. You can also ask your members for donations or help with the recycling process. If all else fails, you can always sell your scraps and old items online or donate them to a local charity.
Running a Coworking Space Does Not Have to Be Costly
Though running a coworking space can be expensive, there are infinite ways to keep your overhead costs down. From investing in automation technologies to taking advantage of natural light sources and setting up extra income streams, there are many strategies you can use to make sure your business is as successful as possible. With the right approach, you'll be able to keep your expenses in check and make sure your coworking space is a success.
