235. Your Coworking Scorecard Focus for Q1 2022

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235. Your Coworking Scorecard Focus for Q1 2022

00:00:01 Welcome to the Everything Coworking podcast, where you learn what you need to know about how the world wants to work. And now your host co-working space owner and trend expert. Jamie Russo. Welcome to the Everything Coworking podcast. This is your host, Jamie Russo. We are into 2022. I hope you enjoyed. Last week's podcast episode was a case study with Jim Hyde who owns a coworking space in Healdsburg,

00:00:44 California. It is a must. Listen, if you didn't get to that and we have some fantastic episodes that teed up for you for the next few weeks. So today we are talking about key performance indicators for the beginning of 2022 for your Coworking business. And then we have up next, I have an interview with feather, the furniture company that's partnered with WeWork to do on demand furniture for co-working spaces.

00:01:16 So I can't where to share, wait to share that one. We're doing some Q and a episodes, pulling questions from the Facebook group and a case study on a HubSpot implementation and a number of other marketing updates that 12 X, the incoming leads for a coworking space in Northern Virginia. So if you are not subscribed to the podcast, hit the subscribe button because you don't want to miss these.

00:01:45 And if you're a YouTube fan, we are putting these on YouTube. So you can also watch. And I have to confess if you watch this one, I'm a little casual tonight. I'm in my sweatshirt. I'm recording in the evening, which I usually don't do. And so my lighting is a little dark it's dark outside, and I have to pull out all the big fancy lights in order to offset the darkness,

00:02:09 which I have not done. So I decided done, wait, what did they say? Good and done is better than great and not done. So we are getting this rolling. I am trying to qualify for a CrossFit competition in the summer. So you have to go through six workouts in order to get a spot in this competition. And I will say that the workouts are a little out of my league,

00:02:37 which doesn't usually happen to me because I'm fairly competitive. So I, yeah, I felt over the weekend, like I had broken myself and I'm still recovering and I can't actually sit down very comfortable right now. So I'm standing, but anyway, okay. So beginning of 2022, it is a time to focus on planning for the year being intentional and being in touch with your numbers.

00:03:08 So for those of you that don't know what we get up to, and we're not doing the podcast, I run the Coworking Startup school. So I help folks start coworking spaces. And I can tell you, we spend a lot of time in the numbers in that program because the numbers matter a lot. When you're designing your business, that's super, super important to me.

00:03:28 And we just created a new forecasting model that I'm super excited about. I hired someone from Upwork to help me make it fancier and easier to use. And then I also run a mentorship program. So I do some one-on-one work. I run a Flight Group program, which is a mastermind for operators and I run Community Manager University. So I spent a lot of time with operators and community managers.

00:03:56 And one thing I note is that it can be hard to look at our numbers and hard to make time for that and hard to have a scorecard that we are happy with. So we're always kind of working on what that format is. If you have a scorecard that you use for your business, that you're willing to share, we don't need to see your numbers,

00:04:14 but the template that is in high demand. So send it over if you're willing to share that. So why are numbers so important? So in particular key performance indicators, by the way, we have done two episode onto key performance indicators. And I have the kind of personality I do not like to watch movies twice. I don't like to read books twice.

00:04:38 I'm sort of in that mode of like, look, there's so much good content out there. Why would you watch anything again? Why would you waste time on that? My husband on the other hand will watch anything over and over again. He loves, I'm trying to think of, let's see, it'll come to me. If he has a couple of series that he puts his watch endlessly,

00:04:57 and he's a very smart guy, but he just loves to relax with content that he loves. So I don't usually like to repeat things, except there are a few things that, you know, are super important, your Google business profile. I talk about that a lot and your numbers. So we've done a couple of other episodes on KPIs, which are key performance indicators,

00:05:18 which just like important numbers, scorecard. Those are some good synonyms for that term. If it's not something you are familiar with. So we'll link those up in the show notes. The last one was episode 181. So we're going to talk about it again, because I think it's, it's hard to get into the habit of looking at numbers and managing numbers and having your scorecard and integrating your team into the conversation.

00:05:44 And so it's one of those things it's good to repeat and sort of try to get that new habit for the new year of focusing on numbers. So what, why is it important to pay attention? I'm going to focus particularly on some key performance indicators that are probably shifting for folks. And we've talked about this a lot too, but you know who,

00:06:08 how many tours, what is your lead volume look like? So how many tours are getting booked? How many are showing up? So how many of them are serious and committed and how many are you closing? And then really important things like how are people finding you and what products are the leads interested in. These are really critical in terms of making decisions in our business.

00:06:30 So when we think about, you know, why are these things important? These are the only data points we can use to really predict the trajectory of our business. And as optimistic business owners, I fall into this category all the time. You know, I am not so interested in keeping the same growth pace, right? I want there to be an incremental growth pace.

00:06:56 So I want like the hockey stick of growth, but we don't know that that will happen, right? Sometimes it will happen. But the only data we can use is the trend that we have right now. And we have to track these numbers for our own location to understand this current location, to understand what the growth trajectory is going to look like and what pace we can expect.

00:07:18 And we absolutely need to document this journey. If we're thinking about doing additional locations in particular, if you need to get bank loans, investors, you're going to do a management agreement. Any of those external relationships, you will need to have a track record of numbers and show that you understand how to predict your Philip rate essentially, right? Because this model,

00:07:46 you got to get the lease, right. Or you got to own the building and then you need to fill up quickly or else you're burning capital waiting to fill up. So those two aspects, the, you know, the lease and then the Philip are critical to the success. And there's a lots of little details that, you know, are drivers for that success,

00:08:08 but it comes down to that, right? So you want to know what that pace looks like, and you want to be able to predict that and you want to document it so that you know what to expect the next time. Because if you don't, I think it's like childbirth, you'll forget all the pain or, you know, winter in Chicago.

00:08:27 I used to say, winter in Chicago is like childbirth. It's terrible. And then, you know, you completely forget it when the summer comes because you love the summer so much, but we forget the pain points, right? And as, as entrepreneurs, we have to be overly optimistic or else we won't survive. So tracking the numbers helps us to be a little more objective and a little more realistic and helps us with our external constituents.

00:08:54 And those external constituents, as I mentioned, might be investors. Bankers might be your spouse. Who wants to know, you know, Hey, when are you going to get back to paying half the mortgage? Or, you know, when are you going to get back to, you know, contributing to our retirement fund and for your own expectations? So I think as entrepreneurs,

00:09:15 sometimes we'd like to live in this optimistic, hopeful world where we just want to see what's next. Do we want to keep taking action? And we're not really interested in the trends. We just don't want to keep going and going, will help everything get better and will help us fill up faster. But it's good to know your numbers for these reasons.

00:09:34 Also the book, if you're watching on YouTube, I'll hold up. My traction book, the EOS system talks about using your scorecard to change the course before it's too late. So they talk in the book about how your scorecard is an indicator of what's to come on your P and L if you're using the P and L to tell the story of your business,

00:09:58 you are looking at historical numbers, right? So probably you're working with your bookkeeper like that has happened by the time you are looking at a P and L and you can't change that story, you can only look forward. And so if you're keeping a scorecard that is updated weekly and is tracking towards the goal for the month, and you know, if you're ahead or behind,

00:10:21 so this traction, scorecard, all these things are coming up a lot right now, because it's the beginning of the year. And also I mentioned, I run a Flight Group program. We're making some adjustments to that. So we will be opening the invitation for others to join in the next month or so. But we have a group that has committed to an EOS accountability group.

00:10:47 EOS is the entrepreneurial operating system that's taught by traction and Gino Wickman. And that group has been meeting and trying to get good at setting goals, tracking those goals, making progress against those goals, putting numbers in their scorecard. So we use that group as an accountability group. We actually shout out to Felicia Rubinstein who recruited an EOS specialist she's to come support our group and to help us through the process a little bit,

00:11:20 which was a real treat. We did that right at the end of December. Hey, there, our next cohort for our management agreement course called the creative Coworking partnerships is starting on Monday, January 24th. If you are a landlord or a coworking space operator, looking to get into a creative partnership structure, to put a co-working flex office into the building that has the right upside for each party,

00:11:48 while being confident that you've covered all the who does what and what ifs before you commit, then you need to become an expert on how management agreements and other creative deal structures work. I've partnered with management agreement, expert and real estate expert Mike Abrams, to develop a course covering structuring and negotiating management agreements and other creative partnerships from a to Z. If you are a co-working space operator,

00:12:16 looking to expand through our creative deal structure, or you're a landlord looking to add Coworking or flex to your building, we designed this course for you. You can get all the details at Everything. Coworking dot com forward slash management agreements. The course is online and it's actually available anytime, but we like to run cohorts because we feel there's a ton of value in participating in the group calls.

00:12:43 So you can get your questions answered live, and you can learn from what others are up to. Because we have a lot of folks who are actively negotiating and jumping into their creative Coworking partnerships. Right now, we actually launched this course almost a year ago, which seems crazy. We invite any past students into our new cohort so that they can continue to learn,

00:13:05 continue to get questions asked because we know these deals can sometimes take a while to get done. So the next cohort starts on Monday, January 21st. So sign up now so that you can jump into that cohort. You can get all the details at Everything Coworking dot com forward slash management agreements. So here's what I would say about KPI's and scorecard. At the beginning of 2022,

00:13:33 you want to make sure you have a process in place for tracking them. So you may have your own kind of spreadsheet and track the things you want to track. We have a KPI document. Many of you've probably seen this document by now, but if you haven't, we'll link it up in the show notes. It is a key performance indicator for coworking spaces.

00:13:53 It is a lengthy and detailed. If it's like the kitchen sink, anything you might want to track in your business, it's probably in there. And if there's anything missing, please send us an email. So you can grab that. But like I said, I'm going to sort of focus on a little subset of that because what that, the KPI document will help you do is determine what you want to put in your scorecard.

00:14:14 And again, the scorecard is really an indicator of the health of your business. So it might track things like, you know, bank account balance. It might track cashflow. It might track tours, occupancy, things that really drive your business. And you want to look at those again, weekly, because if you only look at them monthly, the month has happened by the time you have that data.

00:14:38 So you want to look every week so that you can pull some levers. And I totally get, it's not that easy to find levers to pull in our business that quickly, but you still want to look and be really in tune. And I find it helpful to have accountability. So I mentioned our Flight Group is doing this EOS accountability group. We meet once a month and we post our seven day tasks in a slack group channel once a week.

00:15:04 So you might find some other accountability partners. So it might be someone on your team. It might be your Community Manager, your operations manager, someone on your leadership team. We have folks in our Flight Group that have leadership teams that do an EOS planning meeting once a quarter, which is fantastic. And they bring in a facilitator, someone external to help them through the process.

00:15:27 So you could do that. You can use your bookkeeper as an accountability partner. I met with my bookkeeper today to go through December again, already happened, but I've done my planning and my budgeting for 2022. And I was complaining about some of my expenses. We went through my software blind by line, you know, she's kind of, you know,

00:15:49 pushing me on, are you sure you really use this one? What do you use that for? Or are you sure you can't cancel it? So your bookkeeper might be a good person because you meet, you should meet with them once a month. Sometimes I feel like really, what do we need to talk about? And she, I think there's,

00:16:03 again, feels like she's my accountability partner likes to get in there, poke around, ask me about my goals. What's working. What's not working et cetera, and find an accountability partner for your goals. So I talked about to my bookkeeper about numbers because numbers are kind of personal. And so we like to keep those to ourselves. The bookkeeper sees all the numbers,

00:16:24 so no problem there. And then I have an accountability partner that I go through my EOS goals with. So my annual goals and my quarterly goals. And we do that every week or every couple of weeks, if our schedules get a little crazy. So find someone that you can do that with and just like bake it in. I've also joined a membership and they have like finance Coworking sessions every two times a week.

00:16:52 So I don't usually make both of them, but at least one of them. And I have my little list of things that I have to get done that are finance related that I usually like put to the back burner and don't take care of. And then they sort of fester and become a problem and looking at my numbers for the, you know, for what's happening,

00:17:10 am I on target for where I want to be for the month? So that can be an accountability approach as well. Okay. So in terms of predicting your business's cadence, we talked about your scorecard being important and helping you to do that. And here's, I just want to come run through a couple of examples. So here are the core things that you want to be tracking in your business.

00:17:38 There are lots more that you can track, but in terms of sort of lead volume and the cadence of closing new members as an aside, Andrea Houle, I'm going to give her a quick shout out, posted, looking for software to help track member contributions to the community. And I was like, mind blown, you know, with that, I don't know anyone who does that.

00:18:02 That's a really special KPI that is not related to, you know, sort of filling up, maybe it's member retention, community health. So I'm not going to focus on those today, but I love those as well. And if anybody has a tracking tip for Andrea, I can't imagine how she could do without doing it manually. And we all get,

00:18:23 you know, question like, is it worth it? Should we be tracking all these things? But generally, yes. Okay. So you want to track the number of tours that get booked and the number of tours that show up if the number that showed percentage of tours that show up as below, about 80%, you want to work on your tour outreach,

00:18:41 or you want to figure out whether if those leads are not quality leads, like they're not showing up because something surprised them and it's not a fit. You want to kind of figure out where that gap is because nobody wants tours in Calendly or acuity that show up, right. That's really demoralizing. And it's just a waste of time. I have a coaching member that I work with who had a pretty low show up rate,

00:19:08 and they started making phone calls to con to confirm tours and their show up rate went up to like 90%. And that seems really simple and obvious, but probably a lot of people are not taking that step. Everything's automated, lots of emails. If you can send text reminders, I always think that's awesome. And we used to also make sure this might've been before Calendly.

00:19:30 We'd send a calendar invite to make sure that the person had it on their calendar versus just floating around in their brain entrepreneurs don't remember anything. So number the show up to where's that close. And then we've been talking about this and a couple of folks were talking about this in the Facebook group. Like, how do you actually track customer lifetime value? So Jeff Wood,

00:19:53 I think, had posted this. So Jeff super high five for you. Do you for trying to figure this out? I know it's not that easy. The GWA collects this data every couple of years, the global workspace association. And I remember doing it for my space and feeling like, okay, this is not perfect. And trying to figure out ways to track it.

00:20:14 It depends on what software you're using, Office RnD and proximity, and everybody else who's listening. If you could make this number, one of the metrics that gets reported, that would make a lot of people really happy, but you can get close. So Jeff's point was, well, it's hard to be perfect. Cause sometimes people upgrade and their membership dollars change and et cetera.

00:20:35 So totally get that. But you should get a sense of how long do your office members stay? How long do your flex desk members day? How often do your dedicated desk members stay in any permutations of those memberships that you have? Because that, again helps you predict your churn, which helps you predict your cadence. So for instance, if you are looking at a churn rate,

00:20:59 that means you're going to lose a member a month and you're only gaining a member a month. You're going to be working at a net zero membership gain every month, which doesn't work. The other couple of things. Again, this is like watching movies over again because I talk about it a lot, but lead sources, how are people finding you? You have to ask them because you know,

00:21:24 we talk a lot about where to spend your money, money and time, Google ads, social media, there's, you know, it's challenging to sort of have the patience to, to track and test, to know what works for you. But you want to know how people are finding you ask every single person that walks in the door. How did you find us?

00:21:44 I had to ask somebody today, I did a sort of a one-on-one call with somebody. And I said, Hey, how did you find me? So he found me through the podcast, which is how many of you have found me. So that helps, you know, what type of marketing should you do more of? Right. I can't stop doing the podcast because I would disappear basically from the face of the earth.

00:22:04 Although we are going to start doing some live masterclasses. So we'll get to see you in person. So hang tight. We're going to announce that one other thing I forgot to announce. This will come up in a little promo, but I was mentioning why we want to track these numbers. If you're interested in management agreements, Michael and I are opening our management agreement program third week in January,

00:22:26 I think it's the 24th. So if you want to register and get in this new cohort, you can register at Everything. Coworking dot com forward slash management agreements and get all the details that we invite our students from all of our former cohorts to our Q and a calls, which is awesome because we have a bunch of folks working on active management agreements right now.

00:22:47 So you'll learn a ton. If you are working on one or getting ready to work on one, we hope that you will join us. Okay. So how are people finding you? What marketing should you do more of or less of what product are your leads interested in? You must track this. And I think this is a gap for a lot of folks.

00:23:07 You hopefully you have this in your CRM. When folks come in, are they interested in an office? Not like, what do they actually buy, but what did they tell you? You're in, they're interested in, you want that data, because again, that will help you predict your numbers and your cadence of filling up. So, and I run through a quick example.

00:23:36 Let's say that you typically get about 12 tours in a month. That may be higher, low for you. I just picked 12. For some reason, if you have an 83% show up rate, then you get 10 tours that show up. If you likely have a mix of roughly 60% of those one, an office, maybe 20% on a dedicated desk,

00:23:59 maybe 20% of them want flex seating. This will be individual to you. So you want to track these numbers and you want to be able to figure out what that typically looks like. And these numbers may fluctuate month to month. So kind of find an average so that you can do the prediction. So if you close half of the tours that show up,

00:24:19 you had tend to or show up, you close five of them. And again, you should know your conversion rates so that you can predict your tours. So if you close half of the tours that show up, but three of them probably will want offices. One dedicated desk, oh, sorry. You're closing. I did this math based on the fact that you're closing half of 50% of each lead type.

00:24:44 So you've closed 50% of the office of just three, one dedicated desk and one flex. And you can take a look at the revenue that you get from those memberships and you can project what your revenue will be. If you continue to close at that rate. So if your offices are 800 bucks a month and you close three of them a month, you're adding $2,400 in cashflow.

00:25:08 If you close one dedicated desk a month, that's 300 bucks a month that you're adding to your cashflow. If your flex desk is, you know, part-time flex, it's 150, then you're closing one of those a month. That's 150 bucks. You're contributing to your cashflow, which are your revenue. I shouldn't say cashflow to your revenue. So that will help you predict if you sell one flex desk desk a month and you extrapolate that out,

00:25:39 it will take you one year to sell 12 of them. Same with your dedicated desks. If it's one, then it'll take you one year to sell 12 of them. So if you don't change your conversion rate, and most people don't have a conversion rate higher than 50%. If you do, you are well above industry standard high five. So if this,

00:26:01 if you look at the numbers and you say, okay, this is what it is, then what you probably need to do is get more tours, right? And so your show up rate is 83%. You can increase that to 90 and that will help. But 83 is also great. So if you double your tours from 12 to 24, now you have 20 tours that are showing up.

00:26:22 You have 12 to one, an office for that one, a dedicated desk and four that want flex seating. So you're closing six offices a month, which will definitely help your monthly revenue numbers. You're closing two dedicated desks and two flex seating. So I want to draw your attention to the fact that if you are full, if your are full and what you're working on is selling dedicated desks and flex seating,

00:26:47 which is probably most of you. Then that's the cadence you really want to pay attention to. And you want to know, okay, what percentage of my leads every month want? Which so in this case, just an example, but 40% of the leads are for a dedicated desk or a flex. So you're already working on small numbers out of the number of tours.

00:27:11 So in this example, we had 24 tours, booked only eight of them wanted a dedicated desk or flex seating. And if we close half of them, that's for new members a month. So in order to increase that number, we either have to keep increasing the number of tours booked just to get the same percentage of people that want dedicated desk or flex seating,

00:27:35 or we have to figure out how do we just get more people in that want the dedicated desks or the flex seating. And this is why it helps to have that data. You can look at the lead and say, okay, what are some commonalities who's searching for dedicated desks? Where are they finding us? Are they looking for us on Google? Did they find us on social media?

00:27:57 Did they get at where they from a referral? You know, how did they get to us so that we know where to invest our marketing time and money? When it's those folks that were focused on findings, same with the flex desk, the part-time folks, and those that's a hard lever to pull, right? We hear that often. It's well,

00:28:15 my offices are full and now I'm focused on selling the open space and open space churns faster. We can, we can have unexpected losses. So that's a caveat too, right? B track our numbers that we can make some predictions, but sometimes it's hard to predict when somebody is going to leave, especially if we have, anyway, I was just going to use the example of having a large office tied up.

00:28:41 So you've got a large office of six people or 10 people. It can be painful when they leave. But again, if we know what our average turn rate is, if we don't have a contract, you do. And even if you do have one year agreements, you need to know once you get that past that one year, mark, what percentage of folks are going to flip over and renew for the next year?

00:29:02 And what percentage are not because that'll help you plan your marketing spend. It'll help you plan for openings that you're going to have. So there's the first round of fill up, right? And then there's what do we do when those folks churn, which will happen every single month? What percentage of them are going to renew, which are not? And what are the levers that we pull?

00:29:23 Are we Google ads? Are we looking for, are we hosting more events? Are we writing referral programs? What are, you know, broker programs? What are the levers that we're pulling to get the folks in that we need to get in? So you want to know what the numbers are. So how quickly do the leads come in? So I had a question the other day from someone about,

00:29:50 you know, worrying about filling up their flex seating. And I think this is very common for new operators, right? They assume they're going to run out of flex seating. Unfortunately, this is almost never the case. It's harder to sell flex seating and it takes a long time to sell it. And so if you know your numbers and how many you're converting every month and what the churn rate is,

00:30:10 you can then predict when you'll sell out of it. You can also look at those numbers and say, you know what? I still dedicated desk a lot faster. It makes more sense for me to convert some of my flex desks to dedicated desks because those close, you know, I'm closing four of those a month and I'm only closing two flex seats a month.

00:30:30 So I'm going to run out a dedicated desk. I should flip over to flex. And again, I know some of you were saying, I can't sell dedicated desks. I have a Flight Group member. Who's like, yeah, it's all dedicated desk. She happens to be very, very good at spreadsheets. That's not helping her sell the dedicated desks.

00:30:46 And so whatever the equation is for you, it's good to, if you look at the numbers, you can make decisions about marketing and about product. So that's it. I'm going to wrap here. So my reminder sort of takeaways for the episode are track your numbers. I'm going to put a sample scorecard. The scorecard for my traction friends is on page one 18.

00:31:12 That's the book open. I always have to, you know, look, everything up for us process takes time to learn. And this woman, Mary who facilitated some sessions for us kept reminding us, look, it takes companies months and months to get better at this to get really comfortable with running their quarterly process with running their L 10 meetings, which is an EOS format for a meeting.

00:31:35 It takes practice for big companies and small companies alike. So if you're newer to tracking numbers, it might take you some time to get used to it. And if you are old hat at tracking numbers, then awesome. And I hope it is working for your business. We would love to hear any tips that you have that everyone else might learn from.

00:31:57 So finding an accountability partner, find a system. I love traction and EOS. You can order the book on Amazon. I'll link to it in the show notes, get a system that works for you and block some time out in your calendar every week to look at those numbers and predict how your business is going to continue to evolve. Okay. We will see you next week for our interview,

00:32:21 with the founder of feather who does on-demand furniture. So for those of you thinking about starting a space or adding a new space, this one will be a hot topic for you. I'll see you then. Hey there, thanks for sticking with us through the end of the episode, don't forget to subscribe on your favorite podcast player. And if you were enjoying the podcast,

00:32:45 please go leave us a review. It helps other folks find the podcast who are thinking about starting a coworking space or already operating a coworking space and are looking to stay up to speed on tips and trends. And we started a YouTube channel. We'd love to have you catch us on video. You can join us for podcast, videos, and Q and a videos and other things that we post to the channel.

00:33:12 We'd love to see you.

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