Coworking spaces are facing huge challenges during COVID-19 and that’s beyond any doubt. Experts state the situation is going to be beneficial for the industry in the long-term with an increase in the adoption of the flexible workspace model once things calm down.
However, in the short-term, it will be challenging for flex and coworking space operators to sustain their business during the initial turbulence. But this doesn’t mean it’s impossible!
Besides taking essential measures about keeping your space and community safe, you’ll need to focus on two other elements to preserve your business during the crisis – financial stability and customer retention.
The measures you’ll take really depend on the size of your workspace, team, and resources. However, below are several tips that are applicable in any case. We hope they will help you handle the situation to some extent.
Now is the time to get extremely cautious about your spendings and cut any unnecessary costs. Because, in the first place, you’ll need financial resources to go through the crisis. Cut anything that you don’t critically need right now. Investigate your budget and see what are the expenses that you can remove entirely and which things you’ll have to only decrease to a minimum.
Also, talk to your landlord. Let them know what’s going on with your business and see how you can support each other (most probably, it’s a challenge for them, too). Don’t hesitate to start the conversation as soon as possible. The earlier you react, the more they’ll succeed in understanding the situation and your pain.
Most probably, your landlord will agree about an extended period to pay your rent or a discount until the initial turbulence is over. So talk to them and see what you can do to save your business. Negotiation will be your biggest weapon now so use it wisely!
Here’s a very useful talk on how to have the right conversation with your landlord.
Communication in times of crisis is crucial. Use all possible channels to communicate the measures you’re taking, as well as any updates on the situation.
Communicate with your community and let them know what’s the situation with your workspace, how this will affect their memberships, and what options they have. Be open to the things you know as well as the things you don’t know.
Do the same with your team and make them feel safe and heard. Let them know how the situation is affecting your business and how/if this will affect them as employees. Be open to questions and discussions. Support them and be available to help them adapt to the situation.
Also, don’t forget to communicate as a human being in the first place. We are all in the same boat and everyone’s facing difficulties. Asking people how they feel and if you can support them is now more important than ever.
Be engaged with your members and their businesses. ‘Seek first to understand, then to be understood’ they say. Your members are going through hard times, too. Being engaged with how they feel, how their business is doing, and what are the challenges on their way, is key to identifying how you can support them and how they can support you.
You might think about offering discounts, freezing memberships, or worst-case scenario – canceling memberships. Look at each member or company case by case. Some of your members might be experiencing only mild revenue loss, while others might be facing severe financial difficulties. Understanding these dynamics will bring more clarity on how it’s best to proceed.
Approach the process as a partner, rather than a vendor. Focus not only on cutting costs for you but on supporting your members to overcome the crisis. Because at the end of the day, if they manage to keep their business stable now, they’ll be able to support you by keeping their membership. Also, this will build trust and loyalty which will have a positive effect not only now, but in the long-term, too.
Some people might be okay with minimal discounts while others might need to switch to a very light membership plan. So, reach out to your members and discuss the situation (communication, communication, communication). Act according to the specifics of their case and see what you can do for them.
Customer retention is crucial for helping your business survive through the crisis. But how to retain customers when most of them (if not all of them) are not using your space now? And this might be the case for a couple of months from now on?
Workspace is your core product but your value proposition is not limited to your physical resources only. Of course, you cannot maintain financial stability by relying on additional services. But any added value will help enhance customer loyalty. And if you manage to convince your members to stick with you during the crisis, you’ll be much likely to succeed in preserving your business and accelerating once things calm down.
So think about all the additional elements of your business that make sense to your members.
You can still maintain a strong community.
And provide them with knowledge and useful resources.
You can still make connections and introductions.
And you can still host community and professional events (online, of course).
Now it’s time to invest in long-term relationships with your members. Think about their businesses and what’s important to them right now. Your members might not be able to use your office space, but you can still be of value to them.
Think about their current pains and how you can be helpful to them. Maybe they are not used to Zoom, or Slack. Or they’ve never worked from home and struggle to concentrate. Maybe they need advice on how to work with teams remotely.
Why don’t you share tips and know-how on these topics (or anything else that’s meaningful to your members)? This might come in the form of daily/weekly calls, educational webinars, online one-on-one consultations with industry experts, or simply useful resources like blog posts and ebooks. Or you might invite a financial consultant to do a webinar on how startups can survive a crisis.
Understanding how your business is performing in terms of cash-flow will help you make way more educated decisions. This will also help you to forecast to some extent and understand how to manage your financial resources in the upcoming months.
Make sure to know what you already got in the bank as well as what you need to collect from members. It’s a useful approach to draft a couple of scenarios about how you are going to react based on the situation. Think about the worst and best-case scenarios, as well as something in between. Make sure to have action steps for each of them.
Knowing your numbers is also extremely helpful in case you need to have tough conversations with your landlords or bank agents, so make sure you get your books in order.
Here’s an article to help you set and measure coworking-specific KPIs.
Although companies like Google, for example, allow its staff to work from home at least till the end of 2020, at some point, your space will open its doors again. However, the flexible workspace industry won’t be the same post-COVID. To keep functioning as a business, every flexible workspace must now meet the new requirements.
Tens of new procedures, guidelines, and even space reconstructions might be needed to ensure your space provides a safe workspace environment. Extreme cleanliness, top-notch air quality, space improvements. Also, a dozen other aspects in terms of communication, are now a priority. We explored this in a separate blog post about how to approach the reopening of your coworking space post-COVID – check it out if you’ve started thinking upon this topic. Also, you might find inspiration in the reopening plan of Kickstart, Pakistan’s largest flexible workspace provider.
Bonus tip: We outlined how the OfficeRnD software can help you deal with some of the challenges you’ll face in the upcoming months due to the COVID-19 crisis. We believe this will be useful to OfficeRnD customers. But we also hope it might help other operators who wonder where they should put their efforts right now.
We really hope this information was useful for you.
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