Coworking and Flex Space Glossary

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  • Coworking Products
  • Coworking Terms
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  • Occupancy & Revenue Metrics
  • Office Terms
  • Retention Metrics

A

Active Customers (Accounts)

Active customers or Active accounts refer to all companies and individual members on recurring membership plans with a coworking or flex space. Drop-ins (irregular, one-off customers) are also often included in the number of Active Customers for the specific period.

Active Members

Active members refer to all people on a recurring membership plan or employees with a company on a recurring membership plan with your coworking or flex space. Drop-ins (irregular users) are often considered Active Members.

Additional Revenue

Additional revenue means all revenue, excluding Desk/Membership and On-Demand Revenue. It typically includes F&B and Other Revenue.

Amenities

Amenities are often used to define additional perks or features, like TV, Whiteboard, Windows with a View, Dog-friendly, High-speed WiFi, etc, that describe different types of workplace offerings.

Amenity Space

An Amenity Space is often an indoor or outdoor space on a lot that is communal and available for members to use for recreational or social activities.

Average Revenue per Customer/Account (ARPC or ARPA)

Average Revenue per Account (ARPA) is calculated as the Revenue divided by your Active Customers. Growing your ARPA means monetizing your customers better and making more revenue per customer.

Average Revenue per Member (ARPM)

Calculates the average revenue generated per member within a specific period. ARPM is considered one of the most essential coworking space efficiency metrics. 

Former Members (Alumni Members)

Alumni or Former Members refer to all people who are still part of the coworking space community but no longer have a recurring membership plan with the space.

Many coworking spaces manage their alumni network carefully and invest in maintaining these relationships. They also consider their alumni members part of the coworking space community.

Marketplace (Aggregator)

A coworking space marketplace (or aggregator or listing website) is an online platform that connects individuals and businesses seeking flexible workspaces with coworking space providers.

This digital marketplace aggregates listings from various coworking spaces, enabling users to search, compare, and book workspaces that meet their needs.

It serves as an intermediary that facilitates the discovery and reservation of coworking spaces, offering a streamlined and efficient way to find suitable workplace solutions.

B

Booking (Meeting Room Booking)

Booking (Meeting Room Booking) refers to a reservation for a meeting space done by a member, drop-in or external customer of the coworking space. 

Booking Credits

Booking Credits are an allowance for meeting room usage in a coworking space. Most spaces offer a certain amount of booking credits with every membership they sell. This way, members can book free meeting spaces for a certain number of hours as part of their membership.

Broker

A coworking space broker is a professional or agency that acts as an intermediary between individuals or businesses seeking coworking spaces and operators. A broker's primary role is to understand their client's specific needs, such as location preferences, budget constraints, required amenities, and desired workspace environment, and then match these needs with suitable coworking spaces available in the market.

Business Center (Serviced Office, Executive Suite)

A business center, also known as a serviced office (more popular in the UK and Australia) or executive suite (more popular in the USA), is a facility that provides fully furnished and equipped office spaces for businesses on flexible terms. Regarding products and service offerings and, in many cases, the facilities and workplace environment, business centers are very similar to coworking spaces. Business centers are considered a type of flex space.

Invoiced Revenue (Billings Revenue)

Invoiced Revenue refers to the total amount billed to customers for services and memberships within a specific period, irrespective of whether the payments have been received or when the service has been delivered.

Although Invoiced revenue also includes all memberships, bookings, and additional services, it's different from the Total revenue of the coworking or flex space due to differences in billing cycles and patterns. 

Landlord (Building Owner)

A landlord or building owner is an individual or entity that owns or, in some cases, manages the property where coworking operations are housed for the owner's benefit.

These landlords lease their properties to coworking space operators. The Landlord's role is crucial as they provide the physical infrastructure necessary for the coworking model to function.

On-demand Revenue (Bookings Revenue)

On-demand Revenue (or Bookings Revenue) is the income generated from services and amenities that members and non-members can access as needed without a membership.

This type of revenue is distinct from recurring membership revenue and provides coworking spaces with additional financial flexibility and the opportunity to cater to a broader range of clients.

Many coworking spaces can generate an additional 20-30% or even more on top of their Membership Revenue via on-demand services.

Meeting room bookings, day passes, event space rentals, and other additional services are the most popular sources of on-demand revenue.

C

Channel Management

Coworking Channel Management space refers to the strategies and practices employed to manage and optimize the various distribution channels through which the coworking space reaches potential clients and generates bookings.

This involves overseeing direct and indirect channels to ensure that the coworking space maximizes occupancy, revenue, and market presence.

Churn Rate (Revenue Churn Rate)

The revenue churn rate for a coworking space is a key performance metric that measures the percentage of recurring revenue lost over a specific period due to cancellations, non-renewals, or downgrades by members.

This metric is crucial for understanding the financial health and stability of the coworking space, as it highlights the retention of revenue from existing members.

Committed Revenue

Coworking committed revenue refers to the guaranteed income a coworking or flex space expects from members who have signed long-term contracts or agreements for using the space.

This metric is crucial for understanding the financial stability and predictability of a coworking space's income, as it reflects the portion of revenue assured over a specified period, typically through monthly or yearly membership agreements.

Community (Coworking Community)

The coworking community refers to the collective group of individuals and businesses that work within a coworking space. This community is characterized by its collaborative environment, where members can network, share resources, and support each other's professional growth.

The coworking community is a fundamental aspect of the experience, fostering a sense of belonging and mutual support among its members.

Community Manager (Center Manager)

A coworking community manager is a professional who fosters and maintains a vibrant, engaged, and supportive community within a coworking space. This role involves a combination of customer service, event planning, marketing, and community building to ensure members have a positive and productive experience.

Cost of Service (Operating Costs)

Cost of Service, or Operating Costs, refers to the total expenses incurred in providing and maintaining the coworking environment and the associated services offered to members. These include rent and utilities, staff salaries, maintenance and cleaning, furnishing, software, supplies and consumables, insurance and legal fees.

Coworking Inventory

Coworking Inventory refers to the range of available workspaces and related amenities the coworking space offers its members.

This inventory includes all types of workspaces, such as desks, offices, meeting rooms, and shared areas, as well as the various services and resources that enhance the coworking experience. Effective management of this inventory is crucial for maximizing occupancy, optimizing revenue, and ensuring member satisfaction.

Coworking Location Type

Coworking spaces can be classified based on location, which can significantly influence their design, target audience, and amenities. The primary classifications are urban, suburban, rural, and other.

Each category caters to different needs and preferences shaped by their geographic and demographic context. 

Coworking Space Mood

Coworking spaces can be classified based on the mood and atmosphere they create, catering to different preferences and work styles, such as Essential, Luxurious, Professional, Unique, Lively, and Quiet.

Coworking Space Operator (Management Company)

A coworking (correct writing is a one-word and not co-working) space operator is a hospitality company or organization responsible for managing and overseeing the daily operations, services, and community within a coworking space.
The coworking operators (or management companies) are crucial in creating a workplace environment that focuses on productivity, collaboration, and innovation. Their responsibilities include facility management, member services, community building, marketing, and financial administration.

Coworking Space Size

Coworking Space Size is a primary classification driven by the location's size.

There are many ways to classify coworking locations by size. A straightforward way is to split them into four buckets: Small (<100 workstations), Medium (101-250), Large (251-500), and Extra Large (501+).

Customer

The customer of a coworking space is any individual or organization that utilizes the shared workspace and associated services provided by the coworking space operator.

These customers seek community, flexible, professional environments catering to various work styles and needs. The diverse nature of coworking spaces attracts a wide range of customers, each with unique requirements and goals.

Customer Acquisition Cost (CAC)

Customer Acquisition Cost (CAC) is the total expense incurred to acquire a new member or customer. It encompasses all the marketing and sales costs of attracting and converting prospective customers into paying members. Understanding and managing CAC is crucial for coworking space operators as it directly impacts profitability and growth.

Customers Churn Rate

Customer Churn Rate refers to the percentage of members who discontinue their membership with your coworking space within a specific time period.

This metric is crucial for coworking space operators as it helps you understand member retention, gauge customer satisfaction, and identify areas for improvement.

A high churn rate can indicate issues with the services or environment, while a low churn rate suggests strong member loyalty and satisfaction.

Flex Space Category (Coworking Category)

Coworking spaces can be classified into several categories based on the quality of amenities, services provided, and overall environment.
Here are the typical classifications: Premium, Upscale, Midscale, and Economy. 
These categories can also be assigned automatically based on their Average Revenue per Member (ARPM) relative to other spaces in their geographic proximity.

Membership Agreement (Coworking Membership)

Coworking membership is a subscription-based arrangement that grants individuals or businesses access (known as members) to a coworking space and its amenities.

It provides a flexible and cost-effective alternative to traditional office leases, catering to various professionals, including freelancers, remote workers, startups, and small to medium-sized enterprises (SMEs). 

The membership agreement is often a monthly recurring agreement for a type of desk (dedicated desk or hot desk) or private office.

Revenue Occupancy (Cash/Economic Occupancy)

Revenue Occupancy (Economic or Cash Occupancy) refers to the proportion of Actual Membership (or Desk) Revenue realized as a percentage of the Target (or Potential) Revenue.

Target or Potential Revenue represents the maximum possible income if all available desks and private offices (the entire coworking inventory) were fully occupied and utilized.

Membership Revenue is the current monthly recurring revenue generated from all occupied resources. 

Revenue Occupancy is calculated as (Membership Revenue / Target Revenue) x 100.

D

Daily Occupancy (Real-time Occupancy)

Daily Occupancy is the percentage of people being physically present in the coworking space for a day by the total number of seats.

Day Office

A coworking day office is a flexible, fully equipped private office within a coworking or flex space that can be rented daily.

This concept of Day offices has been on the rise in the post-COVID world. Many remote and hybrid teams need private space to work for a day every week, month, or irregularly. We're seeing an increased demand for such very flexible office products. 

Day Pass (Daypass)

A day pass is a short-term, flexible option that allows individuals to access a coworking space and its amenities for a single day.

This option caters to professionals who need a productive and professional environment for temporary use without committing to a long-term membership. More often, the day pass is an allowance to book an unassigned desk known as a hotdesk. 

Dedicated Desk (Fixed or Permanent Desk)

A dedicated desk (or fixed desk) in a coworking space is a specific workstation reserved exclusively for one member.

Unlike hot desks (or flex desks), which are available on a first-come, first-served basis, a dedicated desk provides the security and stability of having a personal workspace that is consistently available to the member.

Permanent Desk refers to either a Dedicated Desk or a Private Office desk.

Desk Revenue (Membership Revenue)

Revenue for a specified period from all rentable and on-demand desks - dedicated desks, private offices and hot desks.

Drop-in

A drop-in or drop-in member refers to someone who uses a coworking or flex space occasionally or once without committing to a long-term membership plan.

This type of coworking product offers maximum flexibility and is ideal for those who need a professional workspace sporadically rather than regularly. Drop-ins often use day passes, day offices, meeting rooms, or event spaces.

Dynamic Pricing

A dynamic pricing strategy for coworking spaces involves adjusting the prices of memberships, desks, meeting rooms, and other products and services in real-time based on various factors such as demand, occupancy rates, time of day, seasonality, and the competitive landscape.

This flexible pricing model aims to maximize revenue, optimize space utilization, and attract a diverse customer base by offering prices that reflect current market conditions and customer needs.

Occupancy Rate (Desk Occupancy)

Coworking Desk Occupancy refers to the percentage of available desks in a coworking space currently used by members. This metric is crucial for understanding the workspace's utilization rate and is a key indicator of the coworking space’s operational efficiency, profitability, and overall demand.

Occupancy is calculated by dividing the number of partially and fully occupied permanent desks for the period by the number of permanent desks currently available for rent.

E

Business Center (Serviced Office, Executive Suite)

A business center, also known as a serviced office (more popular in the UK and Australia) or executive suite (more popular in the USA), is a facility that provides fully furnished and equipped office spaces for businesses on flexible terms. Regarding products and service offerings and, in many cases, the facilities and workplace environment, business centers are very similar to coworking spaces. Business centers are considered a type of flex space.

EBITDA

EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) is a financial metric that measures a coworking space's operating performance by focusing on its profitability from core business operations, excluding non-operational factors like interest, taxes, depreciation, and amortization.

This metric helps assess a coworking space's financial health and operational efficiency.

Event Space

An event space is a designated area within a coworking or flex space designed and equipped to host various events, such as workshops, seminars, networking gatherings, corporate meetings, product launches, and social activities.

Members of the coworking space, as well as external individuals or organizations, can rent this space, providing a versatile and professional environment for a wide range of events. Revenue generated from renting event spaces is considered On-demand Revenue.

Revenue Occupancy (Cash/Economic Occupancy)

Revenue Occupancy (Economic or Cash Occupancy) refers to the proportion of Actual Membership (or Desk) Revenue realized as a percentage of the Target (or Potential) Revenue.

Target or Potential Revenue represents the maximum possible income if all available desks and private offices (the entire coworking inventory) were fully occupied and utilized.

Membership Revenue is the current monthly recurring revenue generated from all occupied resources. 

Revenue Occupancy is calculated as (Membership Revenue / Target Revenue) x 100.

F

Dedicated Desk (Fixed or Permanent Desk)

A dedicated desk (or fixed desk) in a coworking space is a specific workstation reserved exclusively for one member.

Unlike hot desks (or flex desks), which are available on a first-come, first-served basis, a dedicated desk provides the security and stability of having a personal workspace that is consistently available to the member.

Permanent Desk refers to either a Dedicated Desk or a Private Office desk.

Flex Space (Shared Office)

Flex space, short for flexible space, refers to commercial real estate that can be easily adapted to suit various business needs and functions.

Unlike traditional office spaces, flex spaces offer short-term contract options, modular layouts, and a range of amenities to cater to diverse and dynamic business requirements. This flexibility makes them attractive for startups, growing businesses, and established companies looking for adaptable workspace solutions.

Flex space (or Flex office) is often used as a broader term encompassing Coworking Spaces, Business Centers, Serviced Offices, Executive Suites, Accelerators, and other types of shared offices. 

Flex Space Category (Coworking Category)

Coworking spaces can be classified into several categories based on the quality of amenities, services provided, and overall environment.
Here are the typical classifications: Premium, Upscale, Midscale, and Economy. 
These categories can also be assigned automatically based on their Average Revenue per Member (ARPM) relative to other spaces in their geographic proximity.

Former Members (Alumni Members)

Alumni or Former Members refer to all people who are still part of the coworking space community but no longer have a recurring membership plan with the space.

Many coworking spaces manage their alumni network carefully and invest in maintaining these relationships. They also consider their alumni members part of the coworking space community.

Hot desk (Flex desk)

A hot desk (or flex desk) is a flexible, shared workspace arrangement within a coworking space where individuals or employees from different organizations can work on a first-come, first-served basis. Users of coworking hot desks are often called Drop-ins.

Unlike dedicated desks, hot desks are not assigned to any specific individual, allowing users to choose any available workstation each time they visit the coworking space. This model promotes flexibility, cost-efficiency, and a dynamic work environment.

Revenue Forecast (Projected Revenue)

A revenue forecast is a predictive analysis that estimates the future revenue (Projected Revenue) generated by the coworking or flex space over a specific period. This forecast helps operators plan strategically, manage resources efficiently, and make informed decisions to drive financial performance and business growth.

A very basic forecast can be based on extrapolating your existing memberships and contracts and assuming how much on-demand revenue you will bring in a particular month.

L

Coworking Location Type

Coworking spaces can be classified based on location, which can significantly influence their design, target audience, and amenities. The primary classifications are urban, suburban, rural, and other.

Each category caters to different needs and preferences shaped by their geographic and demographic context. 

Landlord (Building Owner)

A landlord or building owner is an individual or entity that owns or, in some cases, manages the property where coworking operations are housed for the owner's benefit.

These landlords lease their properties to coworking space operators. The Landlord's role is crucial as they provide the physical infrastructure necessary for the coworking model to function.

Lease Agreement (Tenant Agreement)

A lease agreement is a legally binding contract between a landlord (property owner) and a tenant (individual or business) that sets out the terms and conditions under which the tenant can occupy and use the office space owned by the landlord. This agreement ensures both parties understand their rights and responsibilities during the lease period. 

Most coworking spaces obtain their locations using lease agreements. Only in the last few years have we seen more management agreements between a coworking space and a landlord. 

Lease Rate

Lease Rate refers to the amount of money a coworking space operator agrees to pay to their landlord for leasing a specific property or portion of a property.

This rate is usually expressed as a cost per square foot or per square meter per year or month and forms a critical component of the coworking space's operating expenses.

Length of Stay (LOS)

Length of Stay (LOS or Average Length of Stay) refers to the average duration members remain subscribed to or actively use the coworking services (or are on a coworking space membership).

This metric is crucial for understanding member retention, satisfaction, and the overall stability of the coworking space’s revenue stream.

License Agreement

A license agreement is a legal contract that grants a licensee (the client or member) the right to use office space and associated services provided by a serviced office operator.

Unlike a traditional lease, a license agreement does not create an interest in the property. Still, it permits the licensee to use the premises and facilities on more flexible and shorter-term arrangements, usually one year.

Lifetime Value (LTV) of a Customer

Lifetime Value of a Customer (LTV) refers to the total revenue a coworking space can expect to earn from a customer over the entire duration (Length of Stay) of their membership.

This metric is crucial for understanding each customer's long-term financial value and helps make informed decisions regarding marketing, customer retention, and service improvements.

Location (Site)

A coworking location or site is a specific physical space or a building managed by a coworking space operator.
Coworking operators can manage single or multiple locations in different areas, cities, or countries. 

LTV to CAC

LTV to CAC Ratio measures the relationship between a customer's Lifetime Value (LTV) and the Customer Acquisition Cost (CAC). This ratio is crucial for understanding the efficiency and profitability of a coworking space's marketing and customer acquisition efforts.

The general rule of thumb is that a ratio of more than 3x for LTV / CAC is good. This means you can scale your business and put more fuel into the engine.

M

Booking (Meeting Room Booking)

Booking (Meeting Room Booking) refers to a reservation for a meeting space done by a member, drop-in or external customer of the coworking space. 

Coworking Space Mood

Coworking spaces can be classified based on the mood and atmosphere they create, catering to different preferences and work styles, such as Essential, Luxurious, Professional, Unique, Lively, and Quiet.

Coworking Space Operator (Management Company)

A coworking (correct writing is a one-word and not co-working) space operator is a hospitality company or organization responsible for managing and overseeing the daily operations, services, and community within a coworking space.
The coworking operators (or management companies) are crucial in creating a workplace environment that focuses on productivity, collaboration, and innovation. Their responsibilities include facility management, member services, community building, marketing, and financial administration.

Desk Revenue (Membership Revenue)

Revenue for a specified period from all rentable and on-demand desks - dedicated desks, private offices and hot desks.

Managed Office

A managed office is a fully serviced and managed workspace provided by a third-party operator.

This office solution is designed to offer businesses a flexible, all-inclusive, and hassle-free office environment without the long-term commitments and responsibilities associated with traditional leases.

The managed office is neither a true flex space nor a traditional lease.

Management Agreement (Partnership Agreement)

A management agreement between a coworking space operator and a landlord is a contractual arrangement in which the operator manages the operation and administration of a coworking space within the landlord's property.

Unlike a traditional lease, where the operator rents the space, a management agreement involves the operator managing the coworking operations on behalf of the landlord, often sharing profits based on agreed-upon terms.
Management agreements are becoming very popular in the post-pandemic world.

Marketplace (Aggregator)

A coworking space marketplace (or aggregator or listing website) is an online platform that connects individuals and businesses seeking flexible workspaces with coworking space providers.

This digital marketplace aggregates listings from various coworking spaces, enabling users to search, compare, and book workspaces that meet their needs.

It serves as an intermediary that facilitates the discovery and reservation of coworking spaces, offering a streamlined and efficient way to find suitable workplace solutions.

Meeting Room

A meeting space or room in a coworking space is a designated area specifically designed for conducting meetings, presentations, conferences, and collaborative sessions.

These rooms are equipped with various amenities to facilitate effective communication and productivity, catering to the needs of individuals and businesses that utilize coworking spaces.

All coworking and flex spaces offer dedicated meeting spaces that are rentable by the hour or day. Depending on their purpose, meeting spaces may vary in size and shape. Meeting spaces are a key element of all coworking spaces, as they offer members a means to meet and engage.

Member (Resident)

A coworking space member (or resident) is an individual who has an active subscription or membership agreement with a coworking or flex space or an employee of a member company, granting them access to the shared workspaces, amenities, and community activities offered by the coworking space.

Memberships can vary widely, accommodating different needs and preferences, from freelancers seeking a flexible work environment to businesses requiring dedicated office spaces.

Member Retention Rate

Member retention is the percentage of members who continue their membership over a specific period, indicating satisfaction and loyalty among coworking or flex space members.

It is a critical metric for coworking space operators to understand the effectiveness of their services, community engagement efforts, and overall member experience.

Membership Agreement (Coworking Membership)

Coworking membership is a subscription-based arrangement that grants individuals or businesses access (known as members) to a coworking space and its amenities.

It provides a flexible and cost-effective alternative to traditional office leases, catering to various professionals, including freelancers, remote workers, startups, and small to medium-sized enterprises (SMEs). 

The membership agreement is often a monthly recurring agreement for a type of desk (dedicated desk or hot desk) or private office.

Membership Revenue (Monthly Recurring Revenue - MRR)

Membership Revenue (or Monthly recurring revenue) is the income generated from members who subscribe to various coworking space services.

This revenue stream is a critical component of a coworking space's financial model, providing a stable and predictable source of income. Membership revenue encompasses the periodic payments made by members for access to the coworking facilities and services over a specified duration, such as monthly or annually.

The Membership Revenue consists of all recurring revenue generated from subscriptions, such as hot desk, dedicated desk, private office, virtual office, and other recurring memberships. 

Net Promoter Score (Member NPS)

Member Net Promoter Score (NPS) is a metric used to measure the loyalty and satisfaction of members within a coworking space.

It indicates how likely members are to recommend the coworking space to others, providing valuable insights into member satisfaction and overall service quality.

Your NPS score is measured with a single-question survey (“How likely is it to recommend our space to a friend?”) and reported with a number ranging from -100 to +100, where a higher score is desirable. Members are grouped into Promoters (10 or 9), Passives (8 or 7), and Detractors (6 - 0).

NPS is a leading indicator of Churn. Detractors are more likely to leave your space, while Promoters are more likely to stay and bring their friends.

Pro-Rata (Prorated Membership)

Pro rata is a Latin term used to describe a proportionate allocation. It essentially translates to "in proportion," which in the case of monthly memberships means proportionally distributing the days in a month that a membership was active. 

Prorated coworking membership refers to a membership fee adjusted proportionally based on the number of days a member uses the coworking space within a billing period rather than charging for the entire month.

This approach ensures that members only pay for the time they use the space, making it a fair and flexible option for those who may join mid-month or leave before the end of the billing cycle.

Resource Utilization (Meeting Space Utilization)

Meeting Room Utilization measures how effectively the available meeting rooms are being used. This metric assesses the frequency and duration for which meeting rooms are occupied relative to their total availability, providing insights into the efficiency of space management and potential revenue opportunities.

Similarly, you can measure the utilization of all bookable resources in your Coworking inventory, such as event spaces called Resource Utilization.

O

Cost of Service (Operating Costs)

Cost of Service, or Operating Costs, refers to the total expenses incurred in providing and maintaining the coworking environment and the associated services offered to members. These include rent and utilities, staff salaries, maintenance and cleaning, furnishing, software, supplies and consumables, insurance and legal fees.

Coworking Space Operator (Management Company)

A coworking (correct writing is a one-word and not co-working) space operator is a hospitality company or organization responsible for managing and overseeing the daily operations, services, and community within a coworking space.
The coworking operators (or management companies) are crucial in creating a workplace environment that focuses on productivity, collaboration, and innovation. Their responsibilities include facility management, member services, community building, marketing, and financial administration.

Occupancy Index

The Occupancy Index is a standardized measure used in the coworking industry to evaluate and compare the occupancy rates of coworking spaces.

It serves as a benchmark to gauge the efficiency and performance of these spaces by assessing how effectively they are utilizing their available workspaces. This index allows operators to measure their performance against industry standards and competitors, facilitating informed decision-making and strategic planning.

Occupancy Rate (Desk Occupancy)

Coworking Desk Occupancy refers to the percentage of available desks in a coworking space currently used by members. This metric is crucial for understanding the workspace's utilization rate and is a key indicator of the coworking space’s operational efficiency, profitability, and overall demand.

Occupancy is calculated by dividing the number of partially and fully occupied permanent desks for the period by the number of permanent desks currently available for rent.

On-demand Revenue (Bookings Revenue)

On-demand Revenue (or Bookings Revenue) is the income generated from services and amenities that members and non-members can access as needed without a membership.

This type of revenue is distinct from recurring membership revenue and provides coworking spaces with additional financial flexibility and the opportunity to cater to a broader range of clients.

Many coworking spaces can generate an additional 20-30% or even more on top of their Membership Revenue via on-demand services.

Meeting room bookings, day passes, event space rentals, and other additional services are the most popular sources of on-demand revenue.

Revenue Occupancy Index (CROI)

The Revenue Occupancy Index is a standardized measure used in the coworking industry to evaluate and compare the revenue occupancy rates of coworking spaces.

It serves as a benchmark to gauge the efficiency and performance of these spaces by assessing how effectively they are utilizing their available workspaces. This index allows operators to measure their performance against industry standards and competitors, facilitating informed decision-making and strategic planning.

P

Dedicated Desk (Fixed or Permanent Desk)

A dedicated desk (or fixed desk) in a coworking space is a specific workstation reserved exclusively for one member.

Unlike hot desks (or flex desks), which are available on a first-come, first-served basis, a dedicated desk provides the security and stability of having a personal workspace that is consistently available to the member.

Permanent Desk refers to either a Dedicated Desk or a Private Office desk.

Management Agreement (Partnership Agreement)

A management agreement between a coworking space operator and a landlord is a contractual arrangement in which the operator manages the operation and administration of a coworking space within the landlord's property.

Unlike a traditional lease, where the operator rents the space, a management agreement involves the operator managing the coworking operations on behalf of the landlord, often sharing profits based on agreed-upon terms.
Management agreements are becoming very popular in the post-pandemic world.

Phone Booth

A Phone Booth is a small, private, soundproofed enclosure designed for making phone calls, conducting virtual meetings, or working in a quiet environment without distractions.

As a coworking space operator, understanding and offering well-designed phone booths can significantly enhance the appeal and functionality of your space.

We can confirm that phone booths are the most heavily utilized resource in most coworking and flex spaces

Podcast Room

A Podcast Room in a coworking space is a specialized, soundproofed area designed to meet the unique needs of podcasters and content creators. Equipped with professional-grade audio equipment and acoustic treatments, these rooms provide an ideal environment for recording high-quality audio content.

Podcast rooms can significantly increase your Booking Revenue and help you attract new types of members. 

Pricing Strategy

Pricing strategy for coworking and flex spaces involves setting prices for the various services and membership options to ensure profitability, attract and retain members, and stay competitive. This strategy requires careful consideration of several factors, including market demand, competitor pricing, operational costs, and the unique value propositions offered by the coworking space.

The flex space pricing strategy is a framework for determining the prices of all your products and services, such as fixed and flex desks, private offices, meeting spaces, event spaces, virtual office products, etc. (a.k.a. Coworking Inventory).

Private Office

A private office in a coworking or serviced office facility is a fully enclosed workplace reserved exclusively for a single individual or a team.

Private offices offer the privacy and security typically found in traditional office settings while providing the flexibility and community benefits associated with coworking and flex spaces.

Private offices usually contribute the largest amount to the total revenue of most coworking and flex spaces, while they are the predominant revenue source of Serviced Office businesses.

Pro-Rata (Prorated Membership)

Pro rata is a Latin term used to describe a proportionate allocation. It essentially translates to "in proportion," which in the case of monthly memberships means proportionally distributing the days in a month that a membership was active. 

Prorated coworking membership refers to a membership fee adjusted proportionally based on the number of days a member uses the coworking space within a billing period rather than charging for the entire month.

This approach ensures that members only pay for the time they use the space, making it a fair and flexible option for those who may join mid-month or leave before the end of the billing cycle.

Profit Margin

Profit Margin is a financial metric measuring the revenue percentage that exceeds the total costs associated with running the coworking space. It indicates the profitability and financial health of the coworking operation by showing how much profit is generated from each dollar of revenue.

A healthy profit margin for a coworking space business is between 10 and 30%. Most coworking spaces are not profitable in the first years until they build out their brand and reach the maturity of their space. However, as with any other business endeavor, it's important to reach healthy profits sooner rather than later.

Revenue Forecast (Projected Revenue)

A revenue forecast is a predictive analysis that estimates the future revenue (Projected Revenue) generated by the coworking or flex space over a specific period. This forecast helps operators plan strategically, manage resources efficiently, and make informed decisions to drive financial performance and business growth.

A very basic forecast can be based on extrapolating your existing memberships and contracts and assuming how much on-demand revenue you will bring in a particular month.

Target Revenue (Potential Revenue)

Target (or Potential) Revenue refers to the maximum possible income the space could generate if all available workspaces and services were fully utilized and occupied at their optimal pricing.

R

Churn Rate (Revenue Churn Rate)

The revenue churn rate for a coworking space is a key performance metric that measures the percentage of recurring revenue lost over a specific period due to cancellations, non-renewals, or downgrades by members.

This metric is crucial for understanding the financial health and stability of the coworking space, as it highlights the retention of revenue from existing members.

Daily Occupancy (Real-time Occupancy)

Daily Occupancy is the percentage of people being physically present in the coworking space for a day by the total number of seats.

Member (Resident)

A coworking space member (or resident) is an individual who has an active subscription or membership agreement with a coworking or flex space or an employee of a member company, granting them access to the shared workspaces, amenities, and community activities offered by the coworking space.

Memberships can vary widely, accommodating different needs and preferences, from freelancers seeking a flexible work environment to businesses requiring dedicated office spaces.

Rent Roll Report

A Rent Roll Report of coworking spaces is a detailed report that lists all members and their respective membership or license agreements.

It plays a vital role in financial tracking, occupancy management, revenue forecasting, investor reporting, and lease management, providing a clear and detailed overview of the rental income and agreements within the coworking space.

Resource Utilization (Meeting Space Utilization)

Meeting Room Utilization measures how effectively the available meeting rooms are being used. This metric assesses the frequency and duration for which meeting rooms are occupied relative to their total availability, providing insights into the efficiency of space management and potential revenue opportunities.

Similarly, you can measure the utilization of all bookable resources in your Coworking inventory, such as event spaces called Resource Utilization.

Revenue (Total Revenue)

Revenue or Total Revenue is the comprehensive sum of all income generated from various sources within the coworking operation over a specific period.

This metric is crucial for assessing the coworking business's financial health, sustainability, and growth potential. Total revenue includes multiple streams, reflecting the diverse nature of services and offerings within a coworking space.

Total Revenue = Membership Revenue + On-Demand Revenue + Additional Revenue

Revenue Forecast (Projected Revenue)

A revenue forecast is a predictive analysis that estimates the future revenue (Projected Revenue) generated by the coworking or flex space over a specific period. This forecast helps operators plan strategically, manage resources efficiently, and make informed decisions to drive financial performance and business growth.

A very basic forecast can be based on extrapolating your existing memberships and contracts and assuming how much on-demand revenue you will bring in a particular month.

Revenue Occupancy (Cash/Economic Occupancy)

Revenue Occupancy (Economic or Cash Occupancy) refers to the proportion of Actual Membership (or Desk) Revenue realized as a percentage of the Target (or Potential) Revenue.

Target or Potential Revenue represents the maximum possible income if all available desks and private offices (the entire coworking inventory) were fully occupied and utilized.

Membership Revenue is the current monthly recurring revenue generated from all occupied resources. 

Revenue Occupancy is calculated as (Membership Revenue / Target Revenue) x 100.

Revenue per Available Desk (RevPAD/TrevPAD)

Revenue per Available Desk (RevPAD) is a key performance metric in the coworking space industry that measures the average income generated by each desk within a coworking facility.

It provides insight into the space's financial efficiency and profitability by quantifying the revenue each available desk contributes over a specific period.

Revenue per Occupied Desk (RevPOD, TrevPOD)

Revenue per Occupied Desk (RevPOD) is a key performance metric in the coworking space industry that measures the average income generated by each occupied desk within a coworking facility.

It provides insight into the space's financial efficiency and profitability by quantifying the revenue each occupied desk contributes over a specific period.

Revenue per Square Foot / Square Meter

Revenue per Square Foot or Meter is a key performance metric used in the coworking space industry to measure the financial efficiency and profitability of the space based on the revenue generated relative to the physical size of the coworking location.

This metric provides insight into how effectively the available space is being monetized.

RevPAD Index

The Revenue Per Available Desk (RevPAD) Index is a standard measure used to evaluate and compare the revenue-generating efficiency of coworking spaces.

This index helps operators understand how well their spaces perform regarding Revenue per Available Desk, allowing them to benchmark against industry standards and competitors.

S

Business Center (Serviced Office, Executive Suite)

A business center, also known as a serviced office (more popular in the UK and Australia) or executive suite (more popular in the USA), is a facility that provides fully furnished and equipped office spaces for businesses on flexible terms. Regarding products and service offerings and, in many cases, the facilities and workplace environment, business centers are very similar to coworking spaces. Business centers are considered a type of flex space.

Coworking Space Size

Coworking Space Size is a primary classification driven by the location's size.

There are many ways to classify coworking locations by size. A straightforward way is to split them into four buckets: Small (<100 workstations), Medium (101-250), Large (251-500), and Extra Large (501+).

Flex Space (Shared Office)

Flex space, short for flexible space, refers to commercial real estate that can be easily adapted to suit various business needs and functions.

Unlike traditional office spaces, flex spaces offer short-term contract options, modular layouts, and a range of amenities to cater to diverse and dynamic business requirements. This flexibility makes them attractive for startups, growing businesses, and established companies looking for adaptable workspace solutions.

Flex space (or Flex office) is often used as a broader term encompassing Coworking Spaces, Business Centers, Serviced Offices, Executive Suites, Accelerators, and other types of shared offices. 

Location (Site)

A coworking location or site is a specific physical space or a building managed by a coworking space operator.
Coworking operators can manage single or multiple locations in different areas, cities, or countries. 

Seat (Workstation, Workspace)

Workspaces or seats are the core offerings of a coworking space, driving membership and usage. They cater to the diverse needs of freelancers, remote workers, startups, and small businesses by providing flexible and cost-effective alternatives to traditional office spaces.

By offering various workspace options, coworking spaces can attract a broad range of members, enhancing community and collaboration while maximizing space utilization and revenue potential.

Seats per Square Foot (Square Meter)

Seats per Square Foot is a metric used in coworking spaces to measure the density of seating arrangements within a given location.

It indicates how many workstations or seats are available per space unit, typically one square foot or meter. This metric helps assess space utilization efficiency and plan the layout to balance comfort, productivity, and capacity.

Space-as-a-Service

Space as a Service (SPaaS) is a business model in office real estate that provides flexible, on-demand access to workspaces and a range of services and amenities designed to enhance the user experience. It is an alternative term to the Coworking space movement or the broader Flex Space industry.

This model shifts the focus from traditional long-term leases to a service-oriented approach, offering agility and convenience to businesses of all sizes.

Subleased Office

A subleased office is commercial office space rented out by a tenant (the original lessee) to a third party (the sublessee) for a period typically shorter than the original lease term.  The arrangement allows the original tenant to mitigate their financial responsibilities if they no longer need the entire space or vacate the premises before the lease term expires.

Subleased offices are arguably the biggest competitor to most coworking spaces worldwide. 

T

Lease Agreement (Tenant Agreement)

A lease agreement is a legally binding contract between a landlord (property owner) and a tenant (individual or business) that sets out the terms and conditions under which the tenant can occupy and use the office space owned by the landlord. This agreement ensures both parties understand their rights and responsibilities during the lease period. 

Most coworking spaces obtain their locations using lease agreements. Only in the last few years have we seen more management agreements between a coworking space and a landlord. 

Revenue (Total Revenue)

Revenue or Total Revenue is the comprehensive sum of all income generated from various sources within the coworking operation over a specific period.

This metric is crucial for assessing the coworking business's financial health, sustainability, and growth potential. Total revenue includes multiple streams, reflecting the diverse nature of services and offerings within a coworking space.

Total Revenue = Membership Revenue + On-Demand Revenue + Additional Revenue

Revenue per Available Desk (RevPAD/TrevPAD)

Revenue per Available Desk (RevPAD) is a key performance metric in the coworking space industry that measures the average income generated by each desk within a coworking facility.

It provides insight into the space's financial efficiency and profitability by quantifying the revenue each available desk contributes over a specific period.

Revenue per Occupied Desk (RevPOD, TrevPOD)

Revenue per Occupied Desk (RevPOD) is a key performance metric in the coworking space industry that measures the average income generated by each occupied desk within a coworking facility.

It provides insight into the space's financial efficiency and profitability by quantifying the revenue each occupied desk contributes over a specific period.

Target Revenue (Potential Revenue)

Target (or Potential) Revenue refers to the maximum possible income the space could generate if all available workspaces and services were fully utilized and occupied at their optimal pricing.

Tenant

Tenant is often referred to as a company that’s leasing space on a long-term basis from a Landlord. 

Tour (Tour Booking)

A coworking space tour is a guided walkthrough of a coworking or flex space designed to showcase its amenities, features, and working environment to potential members or customers. The tour aims to provide an in-depth understanding of the space's offerings and community and how it can meet prospective members' needs.

Tours are usually free and booked online. They can be done virtually using specialized VR software or in person with the amazing community manager. 

Traditional Office Space

Traditional office space (or leased office space) is typically rented directly from a landlord, normally on a per-square-foot-per-year basis, for a fixed length of time, usually between 3 and 10 years or more.

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