That low percentage may be explainable based on the relative newness of many individual spaces, but it’s still not fabulous news for space owners, members and friends of the movement. So DeskMag isn’t just reporting the problem but offering solutions as well, recently listing 10 ways spaces can become more profitable. Some of their more original or more crowd-pleasing ideas include:

Rent your space to members and non-members.  The principle is simple: Use what you already have. Regardless of whether a coworker or not, allow ‘outsiders’– locals or city-based groups, for example – to rent out the whole or part of a space for private events, inviting them to become a member of the community. This would introduce the concept of coworking to a wider audience, increase the size of your community, and make good use of an existing space and infrastructure without adding any big red numbers to your monthly budget.

Initiate a credit system. Much like a pre-paid phone card, and possibly attached to a Visa card, coworkers can be given the option of purchasing credits in advance for future — though not necessarily time-specific — use. (One possible model could be 1 Credit = 1 desk-hour; 10 credits = 1 conference room hour). One advantage of a credit system is the ability to alter the price of credits quickly and easily, and being able to forecast a portion of your impermanent traffic.

Free beer. Free anything is a crowd-pleaser, free beer even more so. Providing beer, which could be donated by a producer, alongside coffee and other soft beverages would lubricate conversation and get creative juices flowing.

Work together with headhunters or human resource personnel of big companies. While this could be an effective way to help individuals or freelancers in a space to sell their skills, caution should be employed to refrain from ‘selling’ members. If referrals could be worked with on an operator’s own terms, the integrity of independent membership could be retained while the attractiveness of a space enhanced.

Work with the city council or state departments to create workshops.  The idea was offered in light of a coworking-government partnership in Bilbao, where the Department of Employment hosted workshops for unemployed individuals from creative industries. The program, lasting for six months, did not derive any profit, though did help to boost membership numbers.

Check out the complete list for the remaining ideas and more details on the suggestions above. Of course, DeskMag isn’t the only voice in the coworking community pondering how more spaces can break even. Space owners themselves are getting creative with ideas like regional passes and matching members with interns from local universities to drum up more interest.

The authors of Working in the UnOffice: A Guide to Coworking interviewed many owners about their experiences for their book, asking them about the finances of their spaces. As co-author Genevieve DeGuzman explained, “one in every five coworking spaces has closed its doors, according to studies done by Emergent Research,” but many owners told her about their innovative their efforts to avoid this fate.

“Some ideas touted around include everything from experimenting with membership models (testing the optimum ratio of open desks to private offices) as well as exploring more unconventional practices like private and public sponsorships and franchising,” she said, offering examples:

Gangplank in Arizona is doing interesting things. They are a no-fee model, meaning they don’t charge people to use the space. Instead they rely on “anchor companies” that take on operational responsibility — managing the space and making sure it keeps its doors open as a business. They shoulder the responsibility and the space doesn’t have to hire staff.

They also get sponsorships for internet access and work out contracts with local government for deals on real estate and electricity. At their two new locations in Avondale and Tucson they told us that the local government donated the use of buildings where the space will be housed.

Hive at 55, a space in NYC, is part of the city’s overall urban economic development program to promote its media and technology industries. It received a city grant from the New York City Economic Development Corporation, and partners with Pace University, the Freelancers Union, GuruLoft, Girl in Tech, the Hatchery, and others.

Will coworking spaces need to embrace partner- and sponsorships to become profitable?

Image courtesy of Flickr user Deborah Fitchett.

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The longer I continue this practice, the more I’m coming to appreciate it. Here’s why it pays to track.

#1: It helps with finding the “time sucks.”

You might realize after tracking your time for a while that certain types of projects are less profitable than others. For instance, if you’re a ghostwriter, you might make considerably more writing blog entries than in-depth white papers. If so, you can adjust your pricing or service offerings to compensate.

You might also find that a particular client is more demanding of your time than others, and as a result, you might decide to drop him, charge him more going forward, or change your work habits in order to be more efficient.

#2: It helps with staying on track.

I currently have a very specific goal to keep me on track — work four paid hours per day. I can quickly glance at my time sheet for a given day and see if I’m anywhere near that goal. If I’m not, I know I need to concentrate on acquiring new projects. The more consistent you can be about hitting your own daily goal, the more consistent your income and work load will be.

#3: It helps with being more realistic.

As I mentioned, my goal is four paid hours of work per day. I realized recently that reaching my much lofty income goal would take much more time. In reality, lead generation, administrative tasks, and communications make it impossible to focus exclusively on paid work, so I had to adjust my income goal to match my available time.

Also, you might estimate that you’re working much more or less than you really are. Having a detailed time log shows just how much you’re actually devoting to your business. If you left the corporate world in order to have more flexibility and free time, but you’re still putting in 70-hour weeks, then your reality is well out of line with your intentions, and you might want to rethink your workload.

#4: It helps with improving profitability.

The more you can arm yourself with information, the more accurate you can be when making projections, like giving clients quotes and estimating expenses, which in turn leads to increased profitability.

You can also learn a lot about what tasks are taking more than their fair share of your attention. You might have a “busy” month (one filled with things to do, communications, etc.) and not really have a “profitable” month, since much of your time was unpaid. Hopefully, you can then identify low-value unpaid tasks going forward, and weed them out of your to-do list.

So, although time tracking might seem like yet another demand on your already overtaxed schedule, give it a try for a few months and see if it doesn’t improve your business, and your bottom line.

How do you streamline the time-tracking process? Share your tips, as well as the ways time-tracking is helping your business.

Image by flickr user RBerteig

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