Easy on pocket co-working spaces becoming hot sell amongst millennials
Most of the startups always have modest beginnings. There is always a story of an amazing founder who started his company in his house or a café, found a great team and went on to take over the entire globe. At the initial stage of a startup, working from home or a café is always fine. However, there comes a time when there needs to be a change. Café’s cannot be the places where client meetings can always be taken care of. In the same manner, productivity can surely be hampered with social distractions at home.
All such problems and distractions can be avoided by moving to a coworking space.
Coworking Spaces have become a popular trend in the recent past and a huge number of coworking spaces are springing all over the country and across the globe. While this is not a new trend, what they provide startups is improving with time.
Coworking Spaces in Mumbai are becoming more affordable & flexible for startups and are providing the perfect environment for them to flourish. Most coworking spaces are now providing numerous business solutions as well as flexible membership packages and options as per the needs of their members without burning a hole in their pockets. Coworking Spaces have made it possible for members to use the space for a period of time as required, be it an hour or a year. More and more startups & SME’s are switching to coworking spaces due to various economic & flexible benefits.
In the year of 2017, it was projected that more than 1.1 million people went to work, at a total of 13800 Coworking Spaces globally, according to the Global Coworking Survey 2017, to put the industry numbers in perspective, if each Coworking Space was owned by one enterprise, it would have more locations globally than Walmart.
Coworking Memberships have enjoyed steady growth since its ideation. As the nature of work evolves and the demand for better technology increases, the coworking industry would look much different in 2020 than it is today.
The Coworking trend in India has become increasingly popular in the two-major metro cities: Mumbai & Bengaluru, holding almost half of the coworking market size in the country. The same is said to grow immensely within the next five years. In an earlier report, Knight Frank mentioned that Coworking Spaces took up about 1.8 million square feet of commercial real estate space in 2017. But the increasing demand has led the same industry to take up more that 2 million square feet of commercial real estate space in the first quarter of 2018 alone.
There are numerous factors involved driving this demand, a major concern being affordability and flexibility of use of space. As the world moves towards a shared economy, most of the business models we see are based on shared consumption. In the same manner, coworking also works on the model of shared use of resources. Amenities and Equipment procured singularly would always be more expensive than the burden of such amenities and equipment being distributed among a larger group of members for shared usage.
Coworking spaces are fully fitted out spaces with adequate office infrastructure, hence minimizing the fixed cost for a member to almost nil as there is no need to invest in any office infrastructure. Using & renting coworking spaces means no long terms leases of property acquisitions. Most coworking spaces, now, have superior network & IT infrastructure as well minimizing ones needs. Moreover, members can also look forward to zero lock-in periods and large deposit payments making the entire process a whole lot economical & affordable.
Numerous startups have begun making the switch to coworking spaces not only because of flexibility, but as an easy on pocket solution to grow within the same physical space, without having to move from one location to another as and when they scale in number of members. It is one of the most cost-effective solution for any business. Neither does a business have to execute an additional lease, nor does it have to invest in new infrastructure, all one has to do is add a few more seats to their membership. Down-sizing the team also works in a similar manner without having to pay a fixed rent as per conventional commercial real estate leasing models. A company can save as much as 30% on the operational cost alone, according to some estimates.
Versatility & Pocket Friendly Memberships are the major expectations of the entire demand chain for the coworking segment in India. Coworking Space providers are devoting as much attention towards the pricing component of their business model, as much as their facilities to be provided. India being a price-sensitive market, needs every growing and emerging business segment to come at an affordable pricing with innovative facilities.
If viewed in terms of numbers, the monthly rent and operational costs of a 500 sq. ft. semi furnished office space in a metro city would cost approximately Rs. 70000/-. Whereas, a team room in a co-working space would cost anywhere around Rs. 35000/-, hence saving almost Rs. 35000/- per month equaling to Rs. 4.2 lakhs per year. This saving is equivalent to up to 50% expenses which would be made in the case of a traditional office space.
Coworking is proving to be one of the most ideal workspace solutions for all kinds of businesses ranging from freelancer to larger corporations. With the multitude of services and community driven ecosystems at affordable pricing and such flexibility, coworking spaces have given the service industry a whole new approach. From the looks of it, Coworking is powerful enough that I don’t see it as a dying industry. It is here to stay and to set a base for the future of work.