How to Grow a Flex Space Operation

Thursday, March 28 , 2024

Key trends, including increasing transaction sizes, surging demand for flexible solutions, and the rise of hybrid work arrangements, underscore the glaring opportunity for workspace providers to grow their current flex operations.

In just a few years, the office sector has undergone a complete transformation, with doors closing on traditional ways of working and new ones opening to meet the needs of the modern worker. For flexible workspace providers, several trends have emerged in recent months that make a strong case for growing and expanding flex operations.  

Firstly, transaction sizes within the flexible workspace sector are on the rise worldwide, up 28% in 2023 compared to pre-pandemic, indicating the growing importance of flex offerings in the modern business ecosystem. Secondly, the demand for flexible workspace solutions has surged 16% since the pre-pandemic era, highlighting the resilience and adaptability of these types of spaces.  

Thirdly, as hybrid working becomes more entrenched in corporate strategies, the need for flexible and agile workspace solutions has never been greater. Nearly 63% of landlords globally believe that demand for traditional leases will decrease over the next two years as long lease lengths no longer match how work happens.

Lastly, with companies striving to meet their employees’ requests to work closer to home, flexible workspaces are uniquely positioned to fulfill this demand, leading 29% of operators in secondary towns to plan to increase their footprint over the next two years. 

What these trends make clear is that there is a major opportunity for workspace providers to take advantage of this landscape, which means offering more flexible solutions in convenient, cost-effective locations.  

To help capitalize on these trends, the following actionable strategies can enable flex operators to effectively grow their operation. 

GET TO KNOW YOUR MARKET


To truly understand and cater to your target customers, flexible workspace providers must first identify the demographic that aligns with your brand’s ethos and offerings. Whether it's startups seeking collaborative environments, remote workers craving flexibility, or established businesses in need of satellite offices, pinpointing the ideal customer base lays the foundation for tailored service provision. 

Expanding the range of flexible products is instrumental in both meeting customer expectations and driving revenue growth. By diversifying offerings beyond pure coworking space to include virtual offices, dedicated desks, private offices, or hybrid models, providers can cater to a broader spectrum of the market. This versatility not only enhances the appeal of the workspace but also maximizes revenue streams by accommodating various preferences and budgets. 

Creating a consistent customer experience across the entire flex portfolio is crucial for fostering trust and brand loyalty. No matter if people are accessing your coworking spaces, private offices, or virtual solutions, maintaining uniform standards of service, amenities, and ambiance reinforces your brand's reputation for reliability and quality. This will help to foster a sense of belonging and community — key drivers of long-term engagement and retention in the flexible workspace industry. 

USE MARKET DATA TO CHOOSE THE BEST LOCATIONS


Continuing with a people-centric approach, it’s critical to select optimal locations for each workspace, ensuring your choices are grounded in a deep understanding of the target market and its dynamics. Not all locations are created equal, even if one may seem like an ideal choice at the outset. To find lucrative opportunities for expansion, building and asset level market data should be used to mitigate risks and maximize returns.  

Factors such as demand for flex, supply, occupancy, and transactional pricing trends are critical at this level to identify where flex space is best positioned, to make more informed investment decisions. Additionally, foot traffic, transportation infrastructure, and local business ecosystems should all be evaluated to gauge where your model can support hybrid working trends and decentralized workforces, which are prime candidates for flexible office solutions.  

By leveraging accurate market data and insights you can strategically target these markets and grow sustainable where your products can appeal to a wider range of the market. 

BENCHMARK YOUR OPERATIONAL PERFORMANCE


One essential aspect of growing your business is to drive greater revenues and improve your margins. Benchmarking against the market can give you a clear idea of how your business is performing and identify where you can fine tune your offering and pricing strategies to stay competitive. Historically, data on the flex space sector has been difficult to come by and very opaque.  

Benchmarking tools like CoworkIntel now offer aggregated and anonymized market data that allows you to adjust your pricing models accordingly. By keeping a pulse on pricing trends, you can ensure that your offerings remain attractive and competitive in your markets. 

Tools like CoworkIntel also allow you to track and analyze space utilization across different product types, such as private offices, fixed desks, flex desks, and meeting rooms. Knowing how each product contributes to overall occupancy and revenue generation can inform areas for margin improvement and differentiation.

Additionally, it makes it possible to optimize your space allocation strategies based on how the rest of the market is performing. 

BOOST VISIBILITY OF YOUR SPACES THROUGH MARKETPLACE LISTINGS


Finally, a fourth actionable strategy providers can take to grow their flex operations is to maximize exposure to potential clients by prioritizing online listings. While sales teams are adept at selling the available space, ensuring that these listings reach a wide audience is key to tapping into the full potential of flex space demand. 

One effective way to do this is to leverage your marketing budget to boost your listings for greater visibility. Investing in targeted advertising and promotion can significantly enhance the exposure of your available workspaces across relevant platforms.

After all, you want to make sure your offerings are prominently featured to individuals and businesses actively seeking flexible options, which can be achieved by allocating more resources to sponsored listings. 

Partner with leading industry marketplaces to amplify the visibility of your listings. Can you also align with industry associations, business incubators, or networking groups to access an extended network of potential clients and enhance your brand exposure by forging connections within the flexible office ecosystem. 

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The rapid evolution of the flexible workspace industry, spurred by the shift to hybrid and flexible models, presents significant opportunities for growth and expansion for flexible office providers.

Key trends, including increasing transaction sizes, surging demand for flexible solutions, and the rise of hybrid work arrangements, underscore the importance of adapting and innovating around your growth plans in response to changing market dynamics. 

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