The Stimulus is Your Coworking Friend
by Barbara Sprenger, founder and CEO of Satellite Deskworks
Covid and government stimulus plans are making us really think about the nature of our coworking industry.
We are likely to see one more Covid-related U.S. stimulus package, and although the last one wasn’t really designed for a business like coworking, take advantage of it!
The first Payroll Protection Plan — and probably the next one — focused on keeping people working. It assumed that labor was your major expense. But even in the before-times of coworking, the combination of rent, broadband and utilities probably accounted for 50% – 70% of your income. You can’t keep people working if you haven’t first dealt with these expenses.
We’re a young, growing industry with some quirks that make these times particularly trying (and frightening). Economically, we have very high fixed costs (the aforesaid rent, utilities — and really we need to consider labor in this) and low variable costs (coffee? snacks? carpet cleaning?) Once the fixed costs are covered, there can be real profit. But when you have to scale back, you have very little room before you’re dealing with the stress of not paying bills that are hard to reduce.
Fortunately, the rewrite of the PPP allowed you to count your rent and utilities expenditures towards forgiveness of 40% of the loan, which made a huge difference for all of us. But since the loans were based on your labor expenses — and if you were running your center well, labor was a smaller piece of your costs — there wasn’t enough in the PPP to keep a center going.
We wrote last month about the light at the end of the tunnel. These strange times have really shown people how important local, commute-free, out-of-the-house workspace is. We just have to get through to the realization of that time.
In the meantime, your landlord knows your income is vastly reduced. And they’ve seen the studies on how much you will be needed when people are out and about again. But for now, talk to them and share the burden. They will defer or waive or halve rents for a while, as long as you respect what they are going through, too.
And take advantage of stimulus funds. We all need you to stay afloat.
Deskworks can help you eliminate revenue leakage and automate your space. Contact us to schedule a free demo.