 "Cost of a co-working space")
Catapoolt, a crowdfunding platform launched in 2013, works out of a co-working space in Mumbai. It has so far raised about Rs 1.5 crore for 70-odd projects. But, it still does not have a dedicated office. “The advantages of using a co-working space are cost saving, networking and flexibility of having physical office space, as per the size of my team,” says Satish Kataria, founder, Catapoolt.
A co-working space offers all the infrastructure required for an office such as high-speed internet, cubicles or cabins, housekeeping services, tea/coffee, space for meetings, and so on. It is also possible to customise the space based on the company’s requirement. For instance, the co-working space may have an arrangement of six-seater cubicles but if you want an arrangement of a four-seater cubicle with a managerial cabin, it can be customised, by demarcating the managerial space with a different wall colour, says Meenal Sinha, founder and chief executive officer, Meetingsandoffices.com which offers space in 12 cities across India.
Co-working spaces also organise community-building exercises such as team events or birthday parties, talks or lectures by experts on topics like marketing or finance. That is why a lot of start-ups and entrepreneurs prefer to work out of these.
Cost
For start-ups that are hard on cash, it is not viable to block capital for renting conventional office space, says Kataria. By opting for a co-working space, he has saved 25-30 per cent of the office cost. For his four-member team, he pays Rs 8,000 per month, per person. If he were to rent his own office, he would have to pay security deposit, rent, stamp duty, electricity, telephone, courier charges and so on.
Sinha says the cost saving can be 30-70 per cent, depending on team size and utilisation of space.
“Even if you have a four-member team, you will still need to rent about 1,000 sq ft space. Then, you need to make modifications as per your requirement and incur fixed and recurring costs. Often, you have to pay a security deposit for six to nine months in a conventional space. But, in a co-working space, even if you have to pay a security deposit, it is only one to three months and there are fewer administrative hassles,’’ she says.
Flexibility
In a co-working space, you can hire as much space as your team size. If your firm has four members but you need to hire two more for a six-month project, all you have to do is to pay for two more seats for that period. Later, you can go back to the four-member space. This is particularly helpful for start-ups in the initial period, when the business is dynamic, says Kataria.
You can hire space per month or per hour. The average rate is about Rs 5,000 per month per person, whereas premium rates can go up to Rs 50,000 per month per person. The average rate per hour is Rs 500-800, so it can also work for freelancers seeking a professional environment instead of feeling cocooned at home.
Even small and medium enterprises (SMEs) are seeking these. “SMEs may scale up on the back of a good order but also want to scale down later. We have 50-55 per cent start-ups and the rest are freelancers and SMEs,’’ says Priyatosh Ranjan, founder of Incubex, which operates in six locations across Bengaluru.
Similarly, multi-national companies and corporates, offering the option of working from close to office, also prefer such places. The company knows when their staff come and leave. It also ensures data security. “Co-working spaces also offer individual cabins with access from the common area, which offers privacy. Demands of office space being vastu-complaint can also be met,” says Ranjan.
A place where many companies are sharing space also offers opportunity for networking. Catapoolt, for instance, used the services of a public relations’ firm working out of the same co-working space it was using.
Economy of scale
A co-working space might not work if your team is large, say, 10 members or more. “Currently, I pay Rs 32,000 per month for my four-member team. But, if my team expands to say, 10 members, my cost will go up to about Rs 80,000 a month. For that amount, I can easily get my own office and better infrastructure,” Kataria says. Companies that have clear visibility of their business for the next three-to-five years could also be better off renting their own space than working out of a co-working space, says Ranjan.
