To work with the like-minded and ambitious individuals in an atmosphere structured for this purpose defines a coworking space. It gives a perfect office environment.
Coworking Space Concept –
Coworking space makes a lot of sense for startups and freelancers and also for the established businesses. There are productivity and satisfaction in these collaborative environments which often creates inspiring ideas and networking opportunities.
The reason for this is that coworking space has become popular and especially in the past few years, it has taken a hold across industries. Coworking space holds a great collaboration and also the amenities which are provided at a convenience to the workers who expect this from a modern day workplace environment.
The entrepreneurs and freelancer are able to expand as their businesses grow. This is the kind of benefit a coworking space can provide.
Few facts on coworking space –
78% of people who work out a coworking space are in the age group of below 40 years.
72% of Indian entrepreneurs are in the age group of below 35 years.
The 5 major benefits of a coworking space:
In this competitive space, quite a few start-ups have started thinking of an alternative business model to compete against existing co-work businesses in India. Our analysis and experience suggest following key measures that need to be taken care to make a profitable co-working business:
- Cost saving
Setting up an office needs a certain amount of money for a fixed number of years and deposits towards the lease of the space, infrastructure and utilities, equipment and amenities in order to meet the daily requirements of the office. But with a coworking space, there are various options that can be explored so as to cut down on the cost. Working out a coworking space helps eliminate all these responsibilities and all you pay for is the space, already equipped with everything you might need, at a reasonable cost.
2. Structure and discipline
Flexibility is required to maintain a balance at the coworking space. Working in a coworking space eliminates all sorts of distractions which may be caused while working from your garage, home space, or a coffee shop. It is always a good idea to keep your personal life sperate from your work life.
3. Effectiveness and productivity
Coworking space with its environment motivates individuals working towards achieving their goals, and this inspires those around them to work harder and drives them to make their business a successful one. An office environment creates an energy and mindset that can only come from interacting with fellow workers. In a coworking space, where everyone is busy on their own passion projects, this buzz will drive you on to make your own business a success.
4. Networking and collaboration
Working alone places a barrier between you and people who could potentially help your business. Coworking puts you near people who might have vastly different skillsets or solutions to problems, allowing you to “pick their brains”. If you can find a coworking space that aligns with your field of work, it makes this benefit all the stronger.
With the concept of a hybrid between a big coffee shop and shared office space, individuals can choose the work environment they think would be best for them. They have more freedom to work in a quiet space to focus or in a shared space to allow collaboration and interaction.
– What to consider before planning to invest in a coworking space business model?
- Size matter – Size of the workspace is extremely crucial when measured against the occupancy rate. If the size of the coworking space is small it is extremely difficult to cover up all the cost. Whereas in a large size space the occupancy rate is comparatively higher and thus the chances of profits are higher. This is for the technology coworking business running during normal office hours.
- Location – It is the location and other facilities that the coworking space is dependent on. If space is not centrally located it is hard to attract a large number of tenants even if space is large. The occupancy rate should be at least 80% along with great location and great services.
- Competitive price model – It is important to keep a competitive price against your competitors in the local market. If the price goes high then people will not go there even in first place and if the price is set too low then people start doubting the offering. A workspace with great services and a competitive price works well in the market.
- Minimal operational cost – Keeping a check on the cost is a very important factor for the existence of the company. If there are too many managers, organizers or the maintenance guys to run the space the operational cost might go high. Therefore, offering good quality services at a minimal cost is very important.
- Upscaling business – A coworking space can’t grow larger than a certain size at one place, therefore, it is important to upscale the business by setting up different units in different locations in the same city or in different cities. Proper research and high measures should be taken to set up the new workspace.
It is advisable to rent an office rather than to purchase it. If the workspace unit is not working out or has gained any kind of success in a particular city then it will begin to create a financial burden. So, to start with a small workspace or to rent a workspace is a better decision during the period of upscaling.
– What kind of people work in coworking space?
Coworking spaces give people in the workforce an opportunity to be productive in a place other than their home or office. Coworking spaces are especially popular among remote workers who feel that they are lacking human interaction and want to work in a space where they can network and bounce ideas off of like-minded people. Freelancers and homeworkers, Employees and collaborators, Entrepreneurs and small businesses. Anybody can work in a coworking space doing a business.
– Revenue that can be earned with coworking space business?
Coworking space earns the majority of their revenue by renting out the desks. One in ten spaces earns all of their money from desk rental. The average space earns 10% of their revenue from renting out the meeting rooms and event space.
– What is the cost of running a coworking space in India?
The investment needed for running a coworking space greatly depends on the location of the space. Further, you can get a few details on this from the other article I wrote coworking space, financial model.
Future of Coworking spaces:
Coworking space is the future of business. 2018 saw a big range of coworking spaces in India, with a variety of benefits and facilities provided to the members. More and more people are going to turn to coworking spaces, especially once corporates start looking for new talent within their new workspaces.
The problem of increasing rents is growing by the day, which is bound to have startups, big and small, look for more effective and cost-saving methods to carry out their business. The demand for coworking spaces, therefore, is only going to increase with time.
In 2017, more than 1.1 million people went to work at 13,800 coworking spaces worldwide, according to the 2017 Global Coworking Survey. Coworking memberships have enjoyed steady growth since the idea became a reality. With the increasing demand, coworking will look different by the end of 2020.
By 2020 as per the estimates there will be about 65 million Americans will be freelancers, independent contractors or entrepreneurs and making up a full 40% of the workforce.
The coworking segment in India is expected to receive US$400 million in investments by 2018. Currently, there are around 200 premium business centres across the country that are set to double by 2020. Although there are less than 100 branded coworking spaces operating in India, this number is expected to expand by four times over a period of three years. Aggregated shared offices are set to reach approximately 500 centres by 2020 from their status of about 150 centres. At present, there are approximately 300 (branded and unbranded/organized) shared workplace operators in India, operating almost 720 centres across urban India.
Several players are emerging in the market with over 90% of India’s shared workplace operators starting their first coworking space in the last 12 months. With India becoming the third largest start-up hub in the world and the second largest freelancer workforce in the world, there is a potential demand for more than 3.5 to 4 million seats in the coworking space.