In the process of writing a business plan, I did some cashflow vs.
utilization calculations that I thought I'd share. Below is an
excerpt from the business plan.
I'd love to see the numbers from established coworking spaces using
these formulas, if you are inclined to share, along with the space's
sq ft and if its run as non-profit or for profit.
Thoughts/Feedback/Criticism/Complaints are welcome. Sorry if the
table formatting gets destroyed.
[Start excerpt]
In order to cover the expenses at the break even point, one example
total monthly membership might look like:
Quantity Membership Type Total
2 Full
$300
3 Basic
$75
12 4 Additional days per basic member $180
3 Walk-in Day Passes $60
TOTAL
$615
At this level, you have five users that regularly use the space, plus
1 to 3 occasional users.
To calculate utilization, we will assume:
1. Full time members will be in attendance every open day
2. All users that are in attendance on any particular day utilize
the space for the full day
While neither of these assumptions will typically be true, we will err
on the side of caution.
To calculate Total Utilization, we use the following formula.
Days Open * Maximum Occupancy = Total Utilization
Therefore;
20 days * 11 people = 220 TU
To calculate utilization for this membership level;
2 full time members * 20 days = 40
3 basic members * 5 days = 15
3 Walk-ins = 3
40 + 15 + 3 = a utilization level of 58
58 UL / 220 TU = 26% utilization
The Phase 1 CollabLab:PHX space is large enough to handle this
membership level.
One example of the membership required to achieve 100% expense
coverage that we'd need to commence with Phase 2:
Quantity Membership Type
Total
3 Full
$450
6 Basic
$150
36 6 Additional days per basic member $540
5 Walk-in Day Passes
$60
TOTAL
$1240
3 Full Time Members * 20 days = 60
6 Basic members * 6 days = 36
5 Walk-ins = 5
60 + 36 + 5 = a utilization level of
101
101 UL / 220 TU = 46% utilization
The Phase 1 CollabLab:PHX space is large enough to handle this
membership level which would enable us to comfortably create a
cashflow level that would support the larger Phase 2 facility.
[End excerpt]
Thanks,
Mike Montalvo
http://www.collablab.net
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