That’s when it all started. We joined a company in this thing called executive suites, where people had individual/less-than-200 s.f. offices on a floor and shared in the amenities.
A lifetime ago – 30 years! GenZ wasn’t born yet. The “Millennial” designation was just recently coined. Pre-business internet. Pre-Y2K. Pre-IPhone and, certainly, pre-WeWork.
Yes, we’ve witnessed a LOT of change and progress in business culture and operations.
Despite the change and progress, there are evergreen truths that we’ve learned as successful operators (and from our consulting clients) in the Flexspace industry. We share these with you, whether you’re considering implementing in your space or have been in operation for years.
What to consider:
1- Know Your Numbers
All of your numbers. Intimately. Of course your start-up costs, yearly projections, actual vs. projections, cash flow, etc.
An even deeper dive means knowing your revenue per s.f., cost per lead/click, cost per tour (virtual or otherwise), cost per close, KPI’s, etc. Where your marketing dollars are most effective and efficient (time from lead to close).
Are you including your member/client lifetime value to the business? The breakdown of your MRR (Monthly Recurring Revenue) and it’s relation to member/client lifetime value? What type of member/client is the most profitable? Sidebar: Analyzing why this type is most profitable may be a meaningful exercise as well.
Long-term future-cast is also important to the health of your business. Have you budgeted for capital improvements in years 5 and 10 or is this part of negotiated future Tenant Improvement monies in your lease? (basics like replacing carpet and some furniture comes to mind)
2- Think Hospitality Business (and be obsessed)
No matter if you have members, clients, tenants – they are all a business community. As such, the role of ownership and the on-site team is to create an experience where needs are anticipated, not just met.
Creating Periodic Memorable Moments (PMM’s), both on an individual member basis and to your community at large makes for ‘sticky’ members/clients in your centers. Think to surprise AND delight, including some spontaneity. Yes, celebrating anniversaries (personal and business), business milestones. AND observing and acknowledging (privately) losses and hardships demonstrate your mission and values that go far beyond the Insta post or TikTok video.
From the previous point, you may uncover the why to the type of member that is most profitable, revealing insights to your level of hospitality focus. Both broad, inclusive hospitality and targeted, elevated hospitality are appropriate expressions of your mission.
3- Know Your Community
What is the vibe or personality of your Community? More casual or formal? More extraverted or introverted? Quiet buzz? Spirited? All of the above?
Ideally, all of the above will be part of the recipe at some time, maybe simultaneously. This psychographic information informs the design and layout of your space. Make room for all of it. Members will instinctively self-select the location and team that feels like the right “fit”. Having a range of experiences and options allows for a broader, interesting and dynamic community.
When you onboard a new member*, does everyone on the team know the member profile? Not just name and industry but
- How they found you
- When the company was founded and by whom (even a corporate member)
- The type of industry and the specific work they do
- How long the member has been a part of the company
- Their ideal client and connection
- Which existing member will be the first introduction you make the first week of membership
- Their favorite area restaurant/favorite lunch place (share a $20 gift card for lunch?)
*(please, this is an essential element of your business success, and we can craft the right process with you)
Survey members for programming ideas, events, special milestones to celebrate. Where appropriate, follow through on the ideas and celebrations on your member portal and social media.
4- The “Secret Sauce” is the Community Management Team (and you need 1.5 people as minimum)
Our belief is that the “secret sauce” for the success of your brand is the Community Management Team. (see tip #2)
Let’s also explain our need for 1.5 team members as a start.
Our clients are building sustainable brands of 12,000 to 15,000 s.f. locations. These locations feature between 60% and 70% private offices, 15% meeting space (including content studios), 10-15% open plan, inclusive of phone booths and café/lounge space. This is a significant capital investment for developers and entrepreneurs. Landlords increasingly understand the need to add this option in their buildings as a tenant-wide amenity.
Our financial modeling and space ratios for 12,000 – 15,000 s.f. locations have been proven as the minimal sustainable size by independent industry surveys conducted by the Global Workspace Association and Deskmag, as examples.
To deliver a “sticky” membership model will always require someone on site to manage member experience and all the details required to run a center. (what happens when the coffee runs out and if the wi-fi connection goes down?) What’s more, if there is a single person managing everything the same concerns hold if that individual is sick or takes holiday. As you start your workplace, 1.5 people will grow to 2 people and perhaps 2.5 depending on occupancy level and types of services offered. (think tech support for podcasts, COVID cleaning standards, etc.)
5- Negotiate for Business Exclusivity in your building (whether lease or management contract)
Protect your investment from the start. The landlords are familiar with language for retail operations within the building. Without this clause, you run the risk that another operator, or worse – the Landlord – will be able to run a flex workspace out of the same building. We have witnessed this in two scenarios in Chicago in the past 4 years. In one case, the existing operator won significant concessions from the landlord to nullify the clause. In the other case, the existing operator was afforded significant financial incentive to relocate their operation (something they were intending to do anyway).
6- Make certain Member Agreements cover a “finders fee” to recruit your Team Members from your company
In our decades of experience, this has been a cornerstone of member agreements since we started.
You’ve invested significantly in both the recruitment and training of your fantastic team. As they deliver on hospitality and create that stickiness we encourage, it is likely they will be recruited away by your members. Capitalize on it. It’s reasonable to charge a 20% of salary finders fee, since the team member was, in fact, “temping” for the client/member during their membership term with you. Consider that the cost to replace the team member and train them could be between 30% and 40% of their salary. Recovering some of the cost is an important business strategy.
It actually makes for a GREAT brand story.
7- Renew your Hospitality Approach Every Day
This industry is operationally demanding. The experience from parking, entering the building, entering your space, grabbing a coffee, using the conference room (and technology), managing member conflict, inspiring your team, financial management, all while coping with higher sanitation standards – WHEW!
Take a breath.
Satisfying the needs of 100+ businesses every day can feel daunting. And exhausting!
Some tips on renewing your hospitality approach include self-care as well.