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Home Business

Should Coworking Spaces Offer Virtual Office Memberships?

by Cecilia Amador de San José
May 21, 2018
in Business
Reading Time: 4 mins read
A A
aws virtual office

60% of coworking spaces aren’t profitable, yet their location and business mailing address could be one of their best assets.

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  • Coworking operators haven’t yet realized the full potential of their address
  • A coworking space’s address is as important as its community, and your address can help you generate new sources of revenue
  • Martin Senn from Davinci Virtual Office Solutions and Mike Sullivan from Alliance Virtual Offices explain the benefits of adding virtual office memberships to your coworking space

Last year (2017), during the unconference part of The Global Coworking Unconference Conference (GCUC), Frank Cottle of the Alliance Business Center Network and Felena Hanson from Hera Hub spoke about why a coworking space’s address is as important as its community.

According to Hanson and Cottle, the physical location of a coworking space can add value to the community, while also adding value to the business.

However, most coworking operators haven’t realized and embraced the full potential of their address, which means they are not as profitable as they can be.

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Of the core services coworking centers can offer, virtual memberships are without question the most profitable; meeting rooms are second, and desk space is least profitable. Ignoring this potential revenue stream will reduce your margins.

Allwork.Space spoke with Martin Senn from Davinci Virtual Office Solutions and Mike Sullivan from Alliance Virtual Offices to learn more about how operators can monetize and benefit from their address alone, specifically by adding virtual office services to their coworking offerings.

Allwork.Space: Why do you think coworking spaces should offer virtual offices?

Martin Senn: Coworking spaces have an opportunity to leverage their address and existing infrastructure and human resource to provide virtual address offerings at minimal to no extra cost. The offering can be very profitable for an operator and would represent a great additional high profit income stream while attracting qualified traffic to their location that eventually can upgrade to full time membership and use additional coworking services.

Mike Sullivan: Virtual offices offer clear benefits for coworking operators, especially if the space has a well-known or coveted address. When you look at the nature of virtual office services, people mostly use them for the premium address, and if an operator is able to market it successfully, then this particular offering can pay for a space’s rent. Moreover, virtual office users tend to stay on for years, so once you close a client the cost of keeping them around is fairly low.

Allwork.Space: What should a virtual office membership include?

Martin Senn: Address, mail receipt and forwarding, lobby directory listings (for spaces located in buildings), limited access to meeting space and desks, and live receptionist services.

Mike Sullivan: Mailing address, as well as mail pickup and forwarding options. We also encourage operators to allow virtual office members to access the space, whether it’s meeting rooms, hot desks or private offices.

*Both Senn and Sullivan recommend offering different virtual office plans. Some of the services that are typically associated with virtual offices should be offered for an additional fee, like VoIP services, live receptionist services, and access to your space.

Allwork.Space: What are some of the less obvious benefits of offering virtual offices?

Martin Senn: Most operators don’t realize that virtual office clients can lead qualified traffic to their space. Virtual office clients need meeting space once in a while, which means they bring in fresh eyes to your space. If handled and followed-up with correctly, these visitors can turn into members themselves. Additionally, like I mentioned before, virtual office clients can also turn into coworking members as well.

Mike Sullivan: Virtual office members often have different needs than typical coworking members, this means that they provide you with an opportunity to learn about more flexible ways to operate your business and profit from them. Additionally, while you may rarely see these members using your workspace, they do tend to bring their clients and colleagues into your space, as well as join some of the events that you host. In simple words, they bring traffic to your space and they add diversity to your community.

Allwork.Space: What are some key steps to successfully add virtual office services?

Martin Senn: Ensure you have the best practices in place and train your staff. I also suggest you work with established channels to help you get the service off the ground, and very importantly, make sure you are CMRA compliant.

Mike Sullivan: There are a number of key pieces you need to put the puzzle together. I would say make sure you take the time to figure out a reliable process for handling mail and, more importantly, of recognizing the names of your virtual office clients. I know this seems like a simple thing, but it is actually the #1 complaint among virtual office users: their mail gets returned to the sender because the staff doesn’t recognize the new member’s name. In order to have a reliable mail handling and forwarding process, you need to go through the CMRA notarization process.

*CMRA: Commercial Mail Receiving Agency.  

**Additional reading on mail handling and forwarding here

The argument for offering virtual offices as part of your coworking services is a strong one. Coworking’s predecessor, executive suites and business centers, have been offering virtual offices for decades, and they have generated significant revenue from them.

Deskmag’s 2017 Global Coworking Survey found that only 40% of coworking spaces are profitable, 35% have zero loss and zero profit, and the remaining are unprofitable. This means that 60% of coworking spaces aren’t profitable.

The opportunity to turn things around is ready for the taking. Virtual offices can help coworking operators increase their revenue, which might turn their business from unprofitable to profitable.

Although the coworking movement is very much about community, you won’t have a community if you aren’t able to make ends meet.

So, to answer the question: should coworking spaces offer virtual office memberships? The answer is yes.

Tags: CoworkingVirtual Office
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Cecilia Amador de San José

Cecilia Amador de San José

Cecilia Amador de San José, Senior Associate Editor of Allwork.Space, is based from wherever her laptop is. She enjoys traveling and visiting new flexible workspaces. If you'd like Ceci to check out your workspace, feel free to reach out to her at [email protected] (and send a plane ticket).

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