Suburban Coworking: How to Make Your Space Sustainable
The coworking industry is booming. Many big cities are home to dozens of shared office spaces. But coworking isn’t limited to cities. Suburban coworking offers a way for independent professionals and remote workers to reduce commute times and leave a smaller carbon footprint by working and connecting in their own communities.
I spoke with Barbara Sprenger, founder and CEO of Satellite Workspace Centers and Satellite Deskworks coworking software, about what makes suburban coworking appealing, how small town coworking spaces boost local economies, and the challenges of operating a coworking space in the suburbs.
Cat Johnson: Why is suburban coworking an important part of the larger coworking industry?
Barbara Sprenger: One reason is the reduced environmental impact. One of the goals of coworking, and one of our goals for starting the Satellite was to reduce commutes—to make it easier for people to work closer to home. In California, each additional one percent of California’s workforce that telecommutes saves a million metric tons of CO2 emissions every year. That’s a big positive impact.
Another of our goals was to support and help create vibrant town centers, building community and a village feel by allowing people to work where they live. There’s a movement in the United States toward walkable communities. Having a cowork center in the middle of town really supports and enhances that walkable community.
What are some other benefits of having people work closer to where they live?
Each knowledge worker you can keep working in your community during the day supports something like 15 square feet of retail. They’re going to the coffee shops, they’re going to the gift store next door, they’re running across the street to the grocery store for something—they’re supporting retail in their town.
A particular suburban problem revolves around the high crime times between 3 p.m. and 6 p.m., when kids are out of school but parents are a commute away. You can imagine what crime in those times is. With suburban coworking spaces you’re keeping parents working closer to where their kids are—and reducing their work day. Another benefit is that, if you have a doctor’s appointment, you can just run out, take care of it and be back at work without losing half a day.
What are some of the challenges of operating a coworking space in the suburbs?
In order to have centers in suburbs, you have to be less monoculture. If you’re in a big city center, you’ve got a big enough market that you can have spaces just for startups or focused just on tech. When you’re in a town, you have to cater to people who do all kinds of different jobs, so you have to be able to address their differing needs in the same space.
A shrink probably needs a place to use by the hour until their business gets going; an accountant will need more security, and they might want to use a workstation but pop into a conference room when they have a client. Perhaps a team will need a full time office or workspace for all of them. You might have a telecommuter working near home two or three days a week so you need to be able to offer a 5 day or 12 day per month plan. You need to maximize your use of the space, so someone else has to be able to use that space when the telecommuter is not there. And that telecommuter might need to VPN into corporate headquarters, so you need a robust IT infrastructure.
You also might have walk-ins—someone who’s just dropping in to do some printing or just needs help publishing a report or checking email. In order to meet all those needs, you’ve got to think through how to easily track usage without it making you nuts or costing you an arm and a leg.
Simplifying these offerings means you need software and hardware that track usage easily. In today’s work environment, you need to be open 24/7 because people keep all kinds of hours now. We’ve been able to do this with small centers by automating as much as possible so we can inexpensively offer 24 hour access or “bucket of hours” plans where members prepay for 20 hours of conference room use, for example, and their bucket automatically refills when the hours are used up.
What are common mistakes you see suburban space operators making when it comes to long-term sustainability?
Not setting expectations appropriately with their members. You can’t take something away later. If people have received a comprehensive and engaging orientation of the center norms and how things work, you really minimize problems later.
We do discount, but a regular line is, “I’m sorry we can’t do more for you, but you want us to be able to pay the rent and stay in business so we can keep the doors open for you.” Reminding people of cause and effect can really help you here.
Another big mistake is not having rock-solid and secure IT infrastructure in place. People come in because they need to know they’re not going to have a problem with internet access—it should be better than what they have at home. We’ve been able to standardize on really reliable, enterprise-quality infrastructure without ongoing license fees.
Some operators haven’t figured out how to manage the technology, the workspace software, the operations to be able to provide more services, such as professional printing, data storage, telephones, virtual plans and after-hours access. You need to have your online security in-place, which means being careful about open networks. You want people to have to log in in some way. Because some space operators haven’t figured those things out, they don’t offer these additional services and benefits. They’ve made their center less sustainable—their ability to pay the bills and pay themselves is reduced.
Do you have any tips for marketing a suburban coworking space?
It doesn’t take a lot to market a center, but each area is slightly different and you have to make connections with all the existing groups in your community: the chamber, the women’s groups, perhaps the gym. There are probably 30 coworking space listing services now so you want to get set up with all the services. Craigslist works great in our areas, but it has to be properly managed. We have a full cookbook just on Craigslist. And of course, absolutely critical is an excellent website with stellar SEO.
What is at the heart of a sustainable suburban coworking space? What are the basics?
One of, if not the most important thing in running a center, is the person at the front desk—the community manager. We encourage our community managers to feel ownership of their center in lots of ways, but one way to get the incentives working for you is to set a salary that is reasonable for people but also give a bonus based on how well the center is doing. We do it as a percentage of profit, which adds to the sense of ownership. We think that’s very important. Some operators don’t want center managers to know anything about the money, but if they’re running the center, they really need a full picture.
To be sustainable, maximize your offerings. It’s important to understand the basic numbers and concepts in coworking. You have something that has high fixed costs and low variable costs. Your fixed costs are your rent, utilities and labor. To add one more member doesn’t cost you that much. However, you can increase profit potential by adding revenue from things that aren’t space-related.
One of the biggest ways to establish sustainability is to start with a good deal on your property lease (or, perhaps, partnership with your landlord.) Remember that markets change. What may seem like a manageable rate today may not feel the same in a downturn. Conversely, if you build your business and know it works, get a longer lease and lock in your yearly increases.
Know and work with a good, experienced broker who knows you and is your advocate. Brokers know the area and know what’s going on in it. And your landlord is vitally important to you. A bad landlord who is unprofessional or doesn’t maintain the building can make your life hell.
A key part of sustainability is having good solid operations. Part of that is minimizing leakage of revenue. If you’ve provided space or services to somebody and don’t have a simple automated way to collect, you may miss charging and getting paid. You’ve done 3/4 of the job and missed all of the benefit by losing on the last step.
What’s an example of revenue leakage?
Say someone walks in the door, they’ve made a conference room reservation, they’re running late and they go straight into the conference room. When they leave, you’re out to lunch. You didn’t get any information from them, there was no reservation or tracking of any kind. Your conference rooms cost you a lot of money to have. Be sure they’re working for you.
Perhaps you’ve worked hard to bring in a new member, but you don’t have the events that make them feel connected in your community. High turnover is leakage. And maybe the biggest leakage for all of us is “bro deals.”
So to nutshell it, what are the key pieces to make a suburban space sustainable?
The landlord, the quality of your lease, being able to offer as much as possible, solid operations, a person at the front desk who is the face of your community, rock solid internet, clear expectations. Oh, and good coffee.