Your Guide to Flex-space Operational Metrics

EXPERTS IDENTIFY THE TOP 5 OPERATIONAL METRICS

In a competitive market where the lines are blurred between traditional and flex space providers, having complete control and visibility over your operation is critical. Reporting on the right metrics helps you understand how effective your business and services are to your tenants and enables you to predict future performance. Here’s the top flex-space operational metrics you have to keep your eye on.

OCCUPANCY

Occupancy rate is your primary revenue driver and it’s evaluated by space and workstation. There isn’t one standard occupancy rate that can determine profitability for operators across the board. Every business model and workspace are different. It comes down to how your RSF (rentable square feet) are distributed across revenue generating spaces and non-revenue generating spaces.

REVENUE

Revenue calculations are based on your total square footage. This means that the price per square foot (or square meter) is the crux of your entire operation. To be profitable, optimize the revenue generating power behind each and every square foot.

Depending on your business model, a widely accepted benchmark for revenue is 80% monthly rent to 20% additional services such as meeting rooms, IT and telecoms services, events and café services.

RATE PER SQUARE FOOT

Your business model requires break-even and profitability numbers. Once you’ve established these in your budget, you can determine the price per square foot of your space and services. This metric allows your landlord to compare your space to other familiar asset classes, such as traditional long-term lease offices or hotels.

SERVICE REVENUE

Tracking supplemental services and amenities revenue is key. Extending additional services is an organic way of increasing wallet share and new revenue streams. A large portion will come from bespoke tech services, trainings and events, or food and beverage.

Because service revenues don’t exist in traditional office leases, they can boost your appeal to landlords as a flex-space operator. They benefit your bottom line and should be tracked.

CUSTOMER LIFETIME VALUE

By nature of occupier demand for shorter office leasing terms and flexibility your customer base may change more frequently. Combine this with more competition in the market and you’ll quickly realize it’s more essential than ever to keep tabs on customer value.

Understand your customers and their demographics to better position yourself to target the right market segments, grow your business and continue adding value.