What is the Cost of Running a Co-Working Space in India?

Shared workspaces are popular with young professionals and entrepreneurs these days, especially freelancers and startups. For anyone looking to tap into this market, a co-working space is an excellent business investment idea.

The co-working space business, like any other office space business is one that requires a good amount of investment up front but only minimal maintenance and costs subsequently. Read on to learn more about costs, investment requirements and business tips.

Costs of Setting up a Co-working Space Business

Since a co-working space business is essentially a property rental business, the first thing you will need is to find a property that is ideal. An office space close to or in the main corporate district of the city is a good choice. You could also look for a more suburban location, close to residential areas where young professionals live and where commercial property costs will be comparatively lower.

Your main costs will be:

• Buying or leasing an appropriate property
• Buying furniture like desks, chairs, loungers, etc
• Setting up a high speed internet connection for customers
• Electricity and back-up electricity connection charges
• Property managers/ caretakers
• Cleaning staff
• Miscellaneous

These are the main costs that you will have to incur. Exact costs will depend on the city or area you are setting up your co-working space business in. You will have to do your research by talking to real estate brokers in that area to figure out the best options.

What and Where to Invest in a Co-Working Space Business?

You would ideally want to keep costs low and therefore leasing instead of outright buying a property would be more ideal and cost-effective. While prime real estate locations in commercial districts may seem most lucrative for an office space business, they may also be more expensive. Some good business tips are to look for property in suburban areas and focusing on offering the best service and maintenance possible, which may not be possible in more expensive areas where high property prices leave little budget for other expenses.

Invest in some cheap but comfortable furniture. The way you furnish your co-working space should be practical but also appealing to the young workforce. Avoid furnishings that are typical in traditional office space businesses but instead go for loungers, bean bags, colourful and dynamic furnishing and decor to set yourself apart.

Invest in marketing your co-working space business directly to young professionals through targeted advertising and digital marketing. Marketing is essential for the success of any new business venture.

Finding Customers

To find customers for your co-working space business, you will first have to determine who you want to cater to. Younger independent and self-employed professionals are an obvious choice, but you can specialise to cater to more specific demographics although that may lead to a potentially smaller customer base.

A business tip is to invest in creating a brand image and ‘vibe’ for your co-working space business. The main selling point of a co-working space is that it is different from the dreary, traditional office spaces and provides a more flexible, dynamic and welcoming environment for professionals, especially freelancers and young entrepreneurs.

Once you have the first customers for your co-working space business, you must focus on creating a community. Since you will have a group of people from different backgrounds working together in one space, it is important that they feel part of a community. This will ensure that your customers remain loyal to your space. This can be done by organising small events to foster a sense of camaraderie. A good business investment idea in this regard can be investing in recreation facilities like a gaming room and coffee shop where your customers can take a break together. This will also set your co-working space business apart from traditional office space businesses.

Maximising Profits

Since initial costs of running a co-working space business are high, you would ideally want to maximise profits to recover starting costs as fast as possible. For this, you may need to get innovative.

An easy business tip to do this is to charge for extra facilities. For example, you can have a recreational area in your co-working space that you can charge an additional fee to access. This area can be separate from the main working area. You could integrate even more services like a gym or workout space, showers, a power napping room, etc. This way, you provide an experience for your customers and ensure they spend more time and money in your space, maximising your profits.

Holding events like movie nights, gaming or indoor sports tournaments, meet-ups etc, can be an interesting way of community building and maintaining the loyalty of your customers. These events can be held by charging a small participation fee to cover your costs.

Bundle these various services into subscription packages for your customers so that they get charged for it alongside their monthly or quarterly rent so that they don’t feel burdened by paying for these services individually each time.

Coffee, beverages and snacks are important for any office space. Instead of providing these services on your own dime, you can simply rent out a portion of the property to a coffee shop or some other similar business. Your customers can enjoy the benefits and instead of having to pay money for services like coffee machines, coffee, tea leaves and other staples, you can collect the rent from having outsourced the job to a third party vendor.

All of these added services may make accounting and ledger management a little complicated. Fortunately apps like OkCredit which are free to use can digitise your ledger and provide an easy and efficient way of account management for your co-working space business.

Recruiting Staff

You will need to hire some staff to look after your property and help your customers since it won’t be possible for you to spend all your time there.

A property manager and caretaker can look after the maintenance and wellbeing of your property and make sure everything is running and well. Receptionists and customer service staff can look after your customers’ needs and provide help and a mode of grievance redressal. Cleaning staff is also necessary as cleanliness and orderliness are important to maintain the function of a good office space. If you plan on maintaining a green space within your co-working space then employing a gardener would be advisable.

You can use employment agencies or websites to recruit appropriate staff. Staff management including keeping records of wages, leaves/absences etc can be done digitally through apps like OkStaff that digitise your ledgers and enable you to keep accurate records and pay your employees their wages transparently and on time.

Also Read:

1) What Businesses Can One Start Without a Shop?
2) How to Start a Balloon Decorator Business?
3) How to Start a Fertiliser Wholesale Business?
4) OkCredit: Simple, Paperless & Secure solution for businesses

FAQs

Q. What is a co-working space?

Ans. A co-working space is a shared, neutral space for professionals of different backgrounds to work independently on different projects or collaboratively together.

Q. How is a co-working space business different from a traditional office space business?

Ans. Professionals in a co-working space, unlike a traditional office space, are not necessarily working for the same company. Some of them may even be freelancers working contractually on independent projects and are not themselves employed full-time by any company. Co-working spaces aim to set themselves apart from traditional, dull, dreary and monotonous office spaces, by focusing on creating a space that is comfortable, welcoming and appealing.

Q. What is an ideal location for a co-working space?

Ans. An ideal location for a co-working space would be one that is easily accessible for professionals to reach and work in. A property in the heart of the commercial district with other office spaces can be a good choice. A property in suburban areas as long as it is accessible to your intended customer base and has all the necessary facilities can also be a good and economical choice.