Coronavirus Crisis Management at the Coworking Business Niche
Every pandemic disease like COVID-19 we are experiencing right now triggers a chain of economical downturns. Having originated in China it is spreading speedily across the continents.
Almost all business niches are affected by the economical crisis. You can view six charts vividly demonstrating the coronavirus impact on the global economy and markets.
Coworking business is one of the most sensitive to quarantine measures as it is connected with hospitality and people gatherings.
“From an economic perspective, the key issue is not just the number of cases of COVID-19, but the level of disruption to economies from containment measures,” Ben May, head of global macro research at Oxford Economics.
College basketball tournaments are canceled, professional sports are on indefinite hold, conferences, concerts, St. Patrick’s Day parades have been called off or postponed. Even Disneyland is shuttered🙀. Coworking spaces dried up nearly overnight.
It's not just the COVID-19 outbreak itself that is causing damage. The disease has triggered stock market chaos, which is now starting to spill over into the real economy. The stock has no purchasing power they used to have a couple of weeks ago.
A rare city can report that life remains relatively normal with open coworking hubs and restaurants albeit with fewer handshakes and more hand washing. In most of the places where the virus is already widespread the downturn is well underway.
We are witnessing a severe natural disaster that affects the most basic level of people. The pullback from public life as a part of the hospitality industry is sending shock waves beyond the coworking market. When coworking spaces close their doors, they no longer need beverages and beer from local brewers, the same goes for catering services, etc.
The threat is moving very fast, you had so many plans a few days ago and now they are invalid. The speed of the crisis outpaces economists’ ability to track it and coworking operators have to stand an hour-by-hour management challenge.
This is exactly what we want to help you with. In this article, I have compiled the most actionable advice following which you will safely lead your coworking business through the crisis🙏.
Tips to Manage a Coworking Business through the Coronavirus Crisis
Some countries, like the USA, for example, find themselves in the middle of the COVID-19 pandemic crisis these days, the others are in the very beginning, while China is finally in the end. Anyway, the coworking business community finds itself in a very uncertain environment.
However, this is not the first and the last crisis in your life. You have probably lived through economic recessions before. Face the storm prepared, weather it and you'll come out on the other side much stronger than before.
Proper crisis management can lessen the negative impact on your coworking business and provide confidence for members and managers.
Here is what you can do:
Be proactive. First of all, you need to be a leader to maintain confidence in your brand, you, and your mangers no matter what. Communicate with members, suppliers, partners, and all parties involved in your business. Inform them about your crisis management planning, recent and upcoming steps you are taking.
Create a safe (COVID-19 free) environment in your coworking center. From disinfection to events canceling, follow all recommendations to protect your members from coronavirus infection.
Extend membership validity for those who purchased but decided to stay home (have to stay home due to the quarantine restrictions). This is better than bleed your bank account with refunds. Besides, transferred memberships will help you keep the existing customers, which is crucial for putting your business back on rails after the crisis.
Be ready to offer flexible (discounted) membership plans to those entrepreneurs whose work is paralyzed by COVID-19.
Optimize the workspace. Close the spaces you don't use to reduce maintenance costs. The same goes for equipment and other supplies.
Negotiate rent price with the landlord. Try to decrease it by 50% for a couple of months or maybe reschedule the payments.
Stop paid ads. There is no sense in running PPC campaigns when your potential customers are physically unable to come to you. Nobody can feel safe at the moment, so people are reluctant to spend money on coworking membership plans.
Rearrange your marketing strategies and offer something timely to survive the crisis. Maybe you will not get revenue but you will boost brand awareness, which will result in higher income in the future.
Switch to cost-efficient software alternatives. There is no lack of software solutions in the current market. Coronavirus crisis is a good opportunity to reboot your business by optimizing all expenses. If you use something next to never, get rid of it. If something is not efficient enough, consider better options.
For instanсe, if your coworking software does not offer mobile apps for members with pre-packed community feed integration so vital to keep members together, migrate to a better option. This way you will be prepared for the next crisis should it occur.
Find alternative suppliers. Crisis affected supply chains which resulted in delays or even cancellations of goods deliveries. The situation forces businessmen to enlarge their contacts and partnerships to minimize this vulnerability.
Stay connected with your coworking community. The avalanche of information that descends on people every day does not create informedness. What you need to do is create and share a regularly updated summary of facts and implications for the team and members to avoid debating and making different assumptions.
Transfer community activities online — arrange online training, classes, meetups and webinars instead of regular events. This is a safe way to show your members how much you care about them that will keep all parties busy and in touch.
Offer lists of recommended movies, books, educational programs, in a word, everything that can help your residents survive the isolation and even acquire new skills and knowledge. You can even schedule discussion clubs where everyone can share their impressions, thoughts, and observations.
Train your employees. As managers engage in their daily activities, they should have the training and background required to not only perform their jobs but to identify potential issues. They should also be empowered to bring issues to your attention. Analysis and a corrective course of action early on often keep crisis situations from arising.
Arrange remote work. Be clear on your remote work policies for community managers and other employees. Explain how they will work, how they will report, and how you will review the results. Be transparent with your work style and share successful practices with members that struggle to reorganize their enterprises.
Run your blog/website. Your coworking space website and blog are perfect places to communicate your message and your side of the story without losing something in the translation. Use it wisely to address members, tenants, and partners' concerns, and enhance brand positions as well.
Track the slightest fluctuations of your business. At this moment the coronavirus crisis is kind of unpredictable. Thus, you need to monitor rapid-reporting cycles to understand how your business is being affected, where mitigation is required, and how quickly operations are recovering. Masterful performance management is extremely important for guiding your coworking business through the crisis. Soon, when the market will stop fevering, it will become obvious which coworking brands managed the challenge most effectively.
Learn your lessons. As I have already said at the beginning of the article, COVID-19 is not a one-off challenge. Learn from your mistakes to be prepared for the next crisis/epidemic that might wait for us in the future. Sooner or later the coronavirus crisis will subside and most of the coworking spaces will return to normal routines. However, efforts should be made not to squander a valuable learning opportunity.
Even while the crisis is unfolding, document responses and impacts to review later and distil lessons. Critical situations that evolve rapidly expose existing organizational weaknesses, like an inability to make hard decisions or an excessive bias towards consensus, which constitute opportunities for improvement.
Create a crisis management handbook for your coworking space. Stress and uncertainty cloud judgment. That’s why it's better to develop a plan before a crisis strikes. How to do it? Envision several of the most likely disruptions to your business and think what you will need to do if they occur. Write down clear action steps into a crisis handbook to guide you in a crisis.
Secure a credit line. No matter how tough is the crisis that hits your coworking business, it is not necessarily the end. You still have your community, employees, partners, etc. You might just need a little help to get past a rough patch before things turn around. Secure a line of credit to have extra working capital in reserve when unexpected events hit.
Perform Your Social Mission
Coworking brands not only provide affordable office space, but they also support entrepreneurs on their way to success and encourage to participate in social and charity projects. The coronavirus crisis reveals lots of opportunities to become a part of something big and essential.
Consider how you can contribute to stabilizing the situation and discuss the possibilities with tenants. Figure out the ways to match the social needs and specific capabilities of your brand and active residents. Live your purpose.
COVID-19 crisis is a dynamic one, which puts a premium on evolvability. Nobody has the right answers at the moment. Moreover, any predetermined answer is likely to become obsolete over time. Thus, you can iterate and learn towards more effective solutions.
Remember that solutions resolving the problems of a coworking business neglecting the interests of people will create mistrust and damage the brand image in the longer term. Conversely, support to customers, partners, employees, health care, and social systems in a time of adversity can potentially create lasting goodwill and trust.
Thus, the key element of dealing with coronavirus coworking economic stress is to live your values precisely when everyone around is most likely to forget them.
If you agree with my anti-crisis points, drop me a line in the comments. Do you feel like contributing with your own advice? You are more than welcome to go ahead.