Not sure how they make a lot of money on this. At $15/hr, and and average of 10 hours of booking, that's $150/day. 20 days a year (you can only book on weekdays), that's a total of $3k a month per space. In NYC, I've got to figure at least $1500 a month, probably higher. Furniture and app development is a relatively fixed cost (maintenance), cleaning after every appointment can add up if you've got a lot discontinuous, small appointments. Doesn't seem like there is a lot of margin - or margin for error if you don't fill the rooms. You've got a large fixed cost that's paid up-front on one side and no guarantee of selling that space - so the business has a lot of risk. Interesting but challenging.
Ah, yes, it was showing me Montreal - so $25 x 10 hrs x 20 days = $2500/month - better. In fact, my suggestion was going to be to double their rates! If I was them, I would be encouraging/exploring more hours per guest - so charge $30 for one hour and then drop it in blocks of 2 or 4 hours.
I still don't like taking on the inventory risk.
I think they limit it to 10-12 hours per day in their schedule (as they limit the days to during the week). I'm just making an assumption about their occupancy rate - could be higher or lower.
In the article they mention that the spaces are often small underused spaces in commercial buildings, and that they try to make revenue-sharing deals with landlords, rather than paying fixed rents.
Thanks for pointing that out - that makes it a lot more interesting. Basically they then become a marketing arm for temp space for the landlords - a much better business imho.
Comments
Not sure how they make a lot of money on this. At $15/hr, and and average of 10 hours of booking, that's $150/day. 20 days a year (you can only book on weekdays), that's a total of $3k a month per space. In NYC, I've got to figure at least $1500 a month, probably higher. Furniture and app development is a relatively fixed cost (maintenance), cleaning after every appointment can add up if you've got a lot discontinuous, small appointments. Doesn't seem like there is a lot of margin - or margin for error if you don't fill the rooms. You've got a large fixed cost that's paid up-front on one side and no guarantee of selling that space - so the business has a lot of risk. Interesting but challenging.
FWIW, it's $25 an hour in New York. Still challenging I but also perhaps not limited to 10 hours a day.
Ah, yes, it was showing me Montreal - so $25 x 10 hrs x 20 days = $2500/month - better. In fact, my suggestion was going to be to double their rates! If I was them, I would be encouraging/exploring more hours per guest - so charge $30 for one hour and then drop it in blocks of 2 or 4 hours.
I still don't like taking on the inventory risk.
I think they limit it to 10-12 hours per day in their schedule (as they limit the days to during the week). I'm just making an assumption about their occupancy rate - could be higher or lower.
In the article they mention that the spaces are often small underused spaces in commercial buildings, and that they try to make revenue-sharing deals with landlords, rather than paying fixed rents.
Thanks for pointing that out - that makes it a lot more interesting. Basically they then become a marketing arm for temp space for the landlords - a much better business imho.
You are off by a factor due to an error in your math
$25/h x 10h/d x 20d/mo = $5000/mo
Oops - you're right - shouldn't do math before coffee!
This.