Remember the Hollywood screenwriter who opened a workspace for Hollywood screenwriters? Aleks Horvat’s still around, but the future of his Santa Monica, Calif., business is uncertain.
Toni Kistner is managing editor of Net.Worker. Contact her at tkistner@nww.com.
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Since Horvat opened theOffice in March 2004, he’s changed his fee per hour from $5 to $6 to $6.99, then down to $4.99, where it’s stuck. He’s increased his hours, cut back his hours, and now is considering increasing them again. The espresso and tea are still free.
Although his clients love the place, Horvat needs 30% more business to break even. He’s cut out all advertising, though he continues to get good media hits, and plans to raise prices “a little bit” in the coming months. He’ll give the business 18 months - until Labor Day - then decide whether to shutter.
During peak hours, theOffice’s capacity can reach 90% to 95%, and he still gets on average two new clients per day. “Despite what I’m saying, I’m pretty optimistic," he says.
He’s in a tough spot. Horvat can’t raise prices too much or “the place becomes a ghost town.” He can’t serve food (there’s no room and his lease doesn’t permit it). His “monthly nut” - four staff members, T-1 line ($800) month, rent, parking and utilities - are fixed. Although Horvat wants to expand - and clients are always asking when he will - he won’t accept outside financing and worries about diluting the brand. “There might be a finite clientele for this,” he says. “When I’m turning them away, I’ll think about opening a second one.”
Come the summer, if things don’t get better, he’ll send out a letter informing clients it’ll take a 30% price increase to stay open. “I have enough capital to bleed, the question is whether I choose to bleed in perpetuity. I don’t,” he says.
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