Shared office space is a relatively new concept in India which kicked off just around the time the Covid 19 pandemic stuck India and other global destinations and with a plethora of mobility restrictions, social distancing norms, and lockdowns the pandemic was in some ways a blessing in disguise of sorts, not only for the private cabins or small office but also for the user since the restrictions imposed in the wake of the pandemic applied to everyone uniformly.
For a business model that is less than 3 years of age, Coworking spaces across India are doing pretty well and we have more than 100 spaces of varying sizes and descriptions across the nation today. For most of these spaces, however, it is just a real estate play and the mindset is typically the way traditional business centers operate. In Coworking spaces, profitability comes from the owner’s ability to network effectively. Presently only a handful of them has got this angle correctly.
Reasons to choose Shared Office in Gurgaon
Community building is the key to breaking even shared office space in Gurgaon and other locations. This is true of private cabins and small offices. People joining small offices or Coworking spaces are freelancers, SMEs, designers, start-ups, and so forth. They are looking for more than just the physical space to work and it is the Coworking community that adds value. For instance, a start-up owner may be a designer, investor, or app developer in these spaces. Therefore, Coworking should be a value addition than mere real estate for people choosing these spaces.
Shared office space in Gurgaon and private cabins either lease out properties or get into a revenue share arrangement with the landlord till such time the promoter has adequate financial means to own the property. 100% or very close to 100% occupancy is essential for this arrangement to work without glitches. If the owner of the shared office space in Gurgaon fails to ramp up occupancy, he can use the exit clause in the revenue share arrangement or lease and minimize his own loss. But, when ramping up occupancy is done without an eye on the quality of professionals joining the facility, mere numbers may not contribute to the overall success of the space.
The location of private cabins and shared offices in Gurgaon should be easily accessible through public transport and the seating capacity should correspond to its size. Such space should also have decent interiors with quality furnishing and the distance between the residence of the members and the Coworking space should be minimal.
3 months should be a healthy break-even for Coworking spaces and shared offices in Gurgaon, though it may extend to 6 months in some cases depending on location and facilities offered. Beyond 6 months it could start hurting the bottom line. Another ingredient of the break-even is constant additions and perhaps some deletions happening across a given period. When you put in more money and enroll more members, the break-even points need to be reset. Ideally, the break-even point should assume 60 or at best 70% occupancy and understand how the numbers pan out.
Multiple revenue streams
Small offices and private cabins should also incorporate multiple revenue streams within the Coworking space to augment revenue. Facilities such as power backup, internet, pantry, and use of kitchen can all carry a price tag so that members can choose what they want instead of paying an all-inclusive price. Depending on how the business progresses, other amenities can also be added to shore up the revenue.
When shared offices spend on furnishing and interiors the expenses should be kept at a minimum. Once they start earning from the enterprise, they can always spend. However, when they spend before earning their first rupee, they should be extremely careful about what they spend and why.
Healthy road ahead
In the early days of Coworking in India, it took a lot of education to make people understand the value behind shared offices and private cabins. But, today it is a different scenario and people are flocking to these spaces having understood the value behind such spaces. Therefore, shared office space in Gurgaon and similar spaces elsewhere are on a healthy track to becoming profitable with short gestation periods.