How to Set and Track Coworking-Specific KPIs

The last quarter of the year is a great time for planning the next ahead – business strategy, budget, future projects, etc.

But to ensure you will be able to track and evaluate your business performance, you need to know your numbers. Or in other words – you need to define and set your key performance indicators (KPIs).

There’s still a lot of uncertainty for the future of coworking spaces but the COVID-19 crisis seems to be more understandable now.

The world is slowly going back (or moving forward) to the new normal.

We hope that the situation in your country has allowed you to start reopening your space and rebuilding your community. And also, to work on your strategy for 2021.

This article aims to help you do that by giving you more clarity about defining, setting, and tracking coworking-specific KPIs.

In the post, you will find:

• What are KPIs and why do you need them
• Some examples of coworking-specific KPIs
• How to define and set your KPIs
• How to measure KPIs within the OfficeRnD platform

We hope this is going to be helpful.

Let’s move on!

What are the KPIs?

A Key Performance Indicator (KPI) is a measurable metric that demonstrates business performance. It’s used to keep track of your progress towards a goal.

KPIs can be set on a high-level for the entire company or for each department of the organization – e.g. Sales, Operations, etc.

Why does your coworking space actually need KPIs?

Having KPIs allows you to follow strategic goals and reach your operation targets.

Moreover, it gives you the chance to monitor and measure your company’s health and progress. Also, it gives you access to data and allows you to analyze patterns over time.

Last but not least, implementing KPIs in your business routine helps you to solve problems more efficiently, make adjustments, and stay on track.

What KPIs are specific to coworking and flex spaces?

To bring more clarity around the essence of the KPIs, here are some examples of KPIs specific for coworking and flexible workspaces:

• Increase the quarterly revenue target with 15%;
• Double the number of members within a year;
• Decrease the average number of churned members in the next 6 months;
• Increase the average stay (retention) to minimum 1 year;
• Triple the number of hotdesk memberships for the next quarter;
• Keep stable the number of Private Office memberships;
• Increase the membership prices with 5% in the next year;
• Sustain an occupancy level of minimum 70%;
• Maintain a minimum gap between resource and cash occupancy.
• How to define the KPIs valid for your coworking business?

Start from your business model

Start from your business model and understand what your organizational objectives are. If you’re not sure where to start, discuss it with your teammates. You’re all in the same boat and everyone has something to share from their point of view.

Choose the main parameters you will be tracking

Pick a handful and don’t go too wild. If you choose too many parameters it will be hard for you to track and then analyze them. Better pick 4 or 5 and break them down into sub-parameters.

Set targets for each parameter

Set these targets based on the desired outcome. Of course, keep the things real and don’t put targets that are way beyond the capacity of your business.

Delegate responsibilities within your team

If your team is big enough, perhaps each person will be in charge of 1 single parameter. If your team is relatively small, try to logically group the parameters. This way, your teammates can more easily have control over them.

Set periods to review the performance

You can do that on a monthly, quarterly, or yearly basis, or combined. You can review and adjust the sub-parameters on a monthly basis. On the other hand, the bigger, strategic KPIs can be discussed on a quarterly or yearly basis.

Embrace the idea that this is an iterative process

Every KPI is a subject of change – either you haven’t defined the KPI correctly and you need to adjust it. Or maybe the environment has changed and you need to adapt to it – this is all part of the flow.

Bonus tip: Remember – your KPIs should be SMART. SMART stands for Specific, Measurable, Achievable, Realistic, and Time-targeted.

How to track KPIs within the OfficeRnD platform

Set KPIs targets

In order to properly track your KPIs and data in the OfficeRnD coworking software, you need to ensure a couple of system settings are in line with your goals.

• Upload all resources available in your space. The inventory or the available resources of your coworking/flex office space should be uploaded under the Space module.
• While adding your resources, define monthly revenue targets for each desk, office, or custom resource. The target you are adding on a resource level will be used for calculating your Cash occupancy.
• Configure your Revenue accounts. The system is distributing your revenue to 4 main Revenue Accounts. If you want to track the revenue streams of your business in more detail you can consider adding more revenue accounts and mapping the products and services you are offering to them.
• Last but not least, the system allows you to set a “Hotdesk Coefficient” as we call it which actually defines how many memberships you expect to sell for each hotdesk.

Bonus tip: Analyze the market in your city and area and set prices that will be competitive and affordable. When setting up targets, take into account the best and worst revenue scenarios, as per the set prices, your current budget, rent, and building expenses. Set a specific period to reach your targets. Create a 2-year plan for price changes and growth.

Track Members’ Turnover

Usually, the basics of tracking members are related to New and Churned members but in the Members Report you can also see information about:

• Net New/Churned members – this is the difference between New and Churned members for the month.
• Members Net Growth – it represents the number of Net New/Churned members as a percentage of the total Active members for the previous month. It is also a clear sign if you are growing in terms of members.

Comparing new and churned members gives you insights about the pain points where you need to put more efforts in:

• If you don’t have a stable flow of new members each month – focus on your marketing and put efforts into attracting them.
• If many members churn on a monthly basis, try to find out why. Organize short exit interviews, collect information from your current members, and conduct anonymous surveys. Work on improving the highlighted problem areas.
• If your net members’ growth is negative this means that you have a tendency of losing members and difficulties in retaining them – focus on developing a retention program.

By exporting the Members report you can easily calculate the Members Retention Rate of your space (Active Members Current Month minus New Members Current Month) divided into Active Members Previous Month).

Comparing new members, churned members, and retention rate could give you insights about the pain points where you need to put more efforts in:

• Analyze your retention rate and look for tendencies, such as seasoning, internal changes in the physical space, community, or team. Develop a retention program.
• If your retention rate is below 100% but you have a positive Net Members Growth that might be a signal that you are doing well in terms of marketing and sales but you might think about improving the way you serve your customers. Retention Rate below 75% might be worrying.

Bonus tips:

• A CRM integration, such as Hubspot, can help you keep your prospects in line.
• With Zapier you can integrate your Mailchimp and keep members and prospects engaged.
• Use the Collaboration section in OfficeRnD to support your retention efforts.

Analyze Revenue Data

The first thing you need to do is to set your resources and targets.

Then, to be aware of your Customers’ KPIs such as new, churned, and retained members.

Once you’re done with this, you can have a look at the revenue parameters and see how they relate to the desired state of your business.

• The Membership report in OfficeRnD provides vital information about your performance in regards to Memberships, broken down by month. You can filter the report by location, plan type, group of plans, or by accounts.
• To further analyze your Revenue you can use the Projected revenue report and the Invoiced Revenue report. The Projected Revenue report is showing your estimated revenue based on the Membership and One-Off fees that currently exist in your account. The Invoiced Revenue report calculates the revenue based on already invoiced Membership, Booking, and One-Off fees. It gives you the total invoiced revenue and the invoiced revenue per client.

Bonus tips

• Have a look at the most and the least used memberships – this will give you ideas about how you can improve your business model and adjust the offered products and services.
• Look into the already invoiced revenue and the upcoming projections – analyze the data and use it to identify potential revenue gaps.
• Use a payment gateway to collect your payments quicker.
• Export the Invoiced Revenue data and compare it with your projections.

Measure Occupancy & Utilization

Аnother parameter that you have to track in your space is your Efficiency. In order to do that you can bet on two main performance indicators – Occupancy and Resource utilization.

• If the Workstation occupancy is much higher than the Cash occupancy that might be a signal that you are giving too high discounts.
• Keep your occupancy high, but keep in mind that if you’re having a 100% occupancy this will not allow your members to grow within your space and might influence your retention rate.
• Compare the revenue you generate per desk for all the resources and see which type brings you the highest revenue and focus on boosting this service further. Don’t forget to look into the occupancy of these resources – if it’s too low, then the price is maybe too high

Bonus tip: Look for tendencies. Analyze the resources that stay unoccupied for a longer period. Try to find a reason for that. Is it something with the setup of the office/the desk location (the light, the temperature, the furniture, the street noise)? Work from there for a day to find out. Consider adjusting the prices of these resources accordingly – this will increase your occupancy and will raise your monthly revenue.