As we prepare to move into our awesome new space we are faced with several exciting financial challenges, and figuring it out is a lot of fun.
- How do we prioritise our budget?
- How do we increase our budget?
- Do we increase membership fees?
- Do we change the membership model?
- oh, and a hundred others…
Increasing the budget beyond that is not easy, yet again we seem to find ourselves out of reach for any government funding, and to be honest we are quite proud of the fact that we have built this business on our own steam and membership fees.
So the next option is to increase membership fees. Well that is not as easy as you might think. Firstly we always want to be value for money, not just in the sense that we offer cheaper space than other places, but we always want to make sure that members are getting awesome ‘other’ benefits from being a member, such as meeting space, events and programming. Are we suddenly the best co-working space in the world just because we move house? No we are not. We are definitely going to offer a better service, but price changes have to be aligned with not only our increase in rent but also our increase in awesomeness.
There is also a lot of strategy to price changes, it may look like we just like all of our prices having a 9 in them, but there is more to it that that. We realised that we never have drop ins for the day, so we are reverting to a new hourly rate. We feel that with our new social area and kitchen we can now attract people in for a quick hit of Hubness and a coffee. But, that price then affects the 1 day a week rate, we have to make sure that people are not cheaper just paying by the hour than taking out a membership. There is absolutely no denying this model works because of recurring memberships. There is no way we could do this without a clear idea of how much we are taking in each month.
Therefore the new hourly rate led us to remove the one day membership and revert to a part-time/full-time model. Going forward we will have a 2 day (part-time) membership and a 5 day (full-time) membership. Full-time will have the flexibility to choose if you have a permanent desk or a locker where you can put your stuff at night. We also decided to remove the clip card option mainly because it is problematic to manage, but also because again in impacts on our new hourly rate. So here are our new rates effective April 1st.
To anyone interested in opening a co-working space I would definitely say stay flexible. This will be our 3rd or 4th iteration and in 3 months we will probably change again. You have to listen to your members while having some imagination and courage to change something that already works. And it definitely helps having someone like Matt who keeps me grounded when I want to have 15 different memberships to suit everyone. Know who you are and know who your customers are!
So after all of that we still don’t know how we are going to afford new chairs, it seems a chair in Canada is more expensive than buying a new home. Hailey will figure it all out though and it definitely is a case of Sofa so good.