Is Coworking Space A Profitable Franchise in 2023?
By Resham Daswani
This article is mainly to simplify our understanding of what a Coworking space is all about. Furthermore, we will also clear any of your doubts related to a common question “ Is Coworking Space a Profitable Franchise in 2023?” So, let's get started.
What does the future hold for the franchising industry? Now that the year 2023 has begun, most entrepreneurs and business owners, have a common thought, how bright will the future of the coworking franchise industry be in India in 2023? Well, not to forget, our earlier article did talk about the franchising industry being the Silver Lining of the Indian Economy. So, yes, there is a promising future for franchise businesses in India.
One such promising and profitable franchising opportunity in India is Co-working spaces. Wondering how is coworking space a profitable franchise in India in 2023? Read on to get more insights into how this franchise opportunity is quite promising in 2023.
Why Coworking Space is a Profitable Franchise in India today?
A coworking space is essentially a shared office with minimal operating amenities needed by freelancers, independent consultants, and business professionals.
Residents from the same or different industries can work alone and collaboratively in the shared space in exchange for membership fees.
These plug-and-play workplaces, however, are not your typical offices.
3 main reasons why coworking space is a profitable franchise in India today.
#1. Cost Effective & Most Appealing choice for property owners looking to rent out their vacant spaces
The affordability of co-working spaces is one of the main factors contributing to their growing popularity. These solutions have a better chance of succeeding in these areas. Additionally, it has opened options for the real estate industry and has become a popular option for owners of vacant land.
The degree of flexibility by the capabilities and quality of company needs is another factor in the popularity of co-working spaces. Flexibility can be found in rental contracts, better networking, the introduction of expandable teams, pay-as-you-go choices, etc.
#3. More Affordable
Co-working spaces provide a workable choice to scale the team as the businesses expand and give an advantage to firms with a central location at much more reasonable prices and cheap start-up costs. Additionally, because co-working spaces serve as the hub, businesses are no longer forced to compromise site quality to save money on monthly rent and utility bills.
Let's analyze how coworking spaces are influencing the nature of work in the future.
- Coworking Spaces Encourage a Collaborative Workplace - In contrast to typical offices and WFH, where you are enclosed in a box, coworking spaces are based on the collaborative working ethos. The high-octane and energetic environment fosters interpersonal relationships, skill development, and teamwork and presents a plethora of networking and collaborative opportunities that can be very advantageous for business expansion.
- Designs For The Workplace That Alter The Boring Mundanity - Leading coworking space providers to choose decor that is cosy, lovely, welcoming, and comfortable; decor that appeals to both extroverts and introverts; and decor that inspires people to want to return to a workplace.
- Including a Designated Recreational Area in the Workplace - People have the chance to stay involved, their minds are reset, they experience more job satisfaction, their attention is improved, their productivity is increased, and networking opportunities are made possible.
- Coworking Workplaces Create A Healthy Community Outside Of Work Meetings - Coworking is increasingly becoming a component of a business plan that enables both people and the organization to prosper in modern times. Many people find solace in coworking's open-mindedness and ability to provide the space, tools, and support needed to expand businesses. Additionally, it encourages businesses to recruit and keep international talent so they can easily change course during uncertain times.
Who are the ideal users of Coworking Spaces in India today?
Coworking facilities, which are rightfully regarded as a paradise for freelancers and budding start-ups, have recently provided independent employees with a break. They give you the freedom to work wherever and the convenience of skipping renting spaces.
Coworking spaces, however, were not made only for startups.
A wider spectrum of companies, such as SMEs, MNCs, and corporates, have begun to capitalise on the burgeoning trends in the coworking sector. Most of them see more benefits to adopting the agile workplace trend than just financial ones. Instead, they appear to like the benefits that coworking offices provide in terms of worker pleasure, flexibility, productivity, and innovation.
Why invest in Coworking Spaces?
Well, to start with, this is a franchise opportunity which is soon moving towards capturing the Indian market. But how?
The environment we live in and the place we desire to work in are both changing. Most independent business owners opt for a more professional workspace for meetings and to keep their personal and professional lives separate, even if many do so successfully from their homes, coffee shops, or other public places.
Herein lies the origin of the idea of co-working spaces.
Difference between Virtual Office Vs Coworking Space- Which is a better option for franchising?
More people than ever before work from home, but some have found the situation isn't always ideal. Coworkers lack the natural inspiration of conference room meetings and breakroom talks and are cut off from their teams. They frequently feel misinformed about the direction of their team.
Therefore, let us understand the difference between a virtual office and a coworking space. Looking at these differences can help you decide I coworking space is a better option in 2023.
1. A physical street address (separate from their residence) where mail and packages can be delivered. Members working at this address cannot use this address.
1. A physical area with meeting rooms and individual offices to reduce distractions
2. Serviceable Reception
2. equipment used by both offices, including phones and printers
3. Service Option of answering phone calls and voicemail service.
3. a location where one can connect with people in relevant or complementary professions
4. Limited number of conference rooms for in-person meetings.
4. communal spaces, such as a kitchenette or break room
Once we have observed the difference in a virtual office franchise and a coworking space franchise, now is the right time to move ahead.
Understanding the Coworking Space Business Model in India
The classic office practice paradigm of one company has been destroyed by the coworking space business model. Renting an office is a big obligation that comes with a monthly lump sum payment for rent and significant costs for the business owner just to keep the office maintained.
These issues have been resolved by the creative concept of coworking office space businesses. In short, this is known as a Coworking Space Business Model.
While operating independently, coworking spaces share the facilities and resources of the building. In addition to being a tool to create money, it also broadens the business community and sources of income.
Newcomers typically favour coworking spaces for startups. This post will assist you in comprehending how to profit from a business coworking space plan.
What makes the demand for Coworking Spaces continue to rise?
A tiny startup, an independent business owner, or a freelancer might obtain an affordable workspace with the assistance of a co-working company. With more businesses joining this market, we have seen a considerable rise in demand for co-working spaces in recent years.
More and more professionals are yearning for the power to pick when and how they can work, as well as the liberty to choose an atmosphere that motivates or encourages them, as the entrepreneurial spirit has rapidly increased.
Thus, with a monthly churn rate of about 5%, the majority of coworking spaces are profitable. The coworking space is more likely to be successful and has a larger membership because of having a greater member-to-staff ratio. Additionally, as compared to rent, personnel expenditures are rising more quickly.
Will Coworking Space Franchises Thrive in India in 2023?
Simple as it looks, there are a few elements which can be considered when investing in a coworking space business in India in 2023.
More than two years after the pandemic began, the tendency toward remote work has persisted, and with it, the requirements of professionals. While the advantages of remote work remain unmatched in terms of increased freedom, human interaction is a definite value that Zoom or any other online platform cannot offer.
In short, Working remotely reduces face-to-face interaction, which hinders networking opportunities and, in some situations, lowers productivity. Although coworking spaces are not a new thought, there has never been a greater need for them, making them an excellent area for investment.
4 Elements to consider while investing in Coworking Space Franchises in India
#1. Multiple Streams of Income
A coworking space franchise should have several sources of income. Many brands provide public cafes where customers can get a coffee or snack while they work. It's an additional source of revenue and a wonderful perk for visitors.
Other potential sources of income include rental venues for events and expert coaching services. These straightforward upgrades are advantageous to visitors and can boost revenue.
#2. Reduced Size, Better Profits
People's complaints about coworking spaces include their enormous sizes. Less overhead translates into lower costs, which results in a more lucrative enterprise.
Think of ideas with different build-out possibilities. Successful models will provide enough space for employees to work comfortably without adding more space that will drive up operating costs.
#3. A Competitive Advantage
Finding a market gap is one of the first steps in launching a business. What is the industry lacking, and how will your company satisfy that need?
Once that has been determined, think about how different coworking models will fare in your neighbourhood and consider how these models may differentiate your company with distinctive products or visual aspects.
Ideal models include amenities like food, networking opportunities, and expert coaching services to make your firm a fully remote working environment.
Bring in customers and distinguish your company from the competition in your neighbourhood.
#4. The Perfect Place
Location, location, location—as in real estate! Since most corporate office spaces are already located in urban areas, the majority of coworking spaces serve little value by being there.
By concentrating on an untouched market, you can meet individuals where they live, shop, and perform daily chores. Who wouldn't like to go five minutes instead of more than an hour to a designated workspace?
Consider models that will be a welcome addition to your local market and satisfy the needs of your professional community when looking into coworking investment prospects.
Once we have understood the benefits and key elements of coworking spaces in India, there is still a question we can’t miss out on.
How much does it cost to start a coworking space franchise in India?
Bigger businesses are operating in the co-working space using franchising models and are making more money in their industry. Due to its low cost, franchising increases the spread of these concepts.
The co-working franchises will eventually control the entire market. So now is the ideal time to invest in the co-working franchise if you want to make big profits.
The initial investment required to launch a co-working franchise starts at around Rs 20 lakhs and can go up to Rs 1 crore. The required space can be anything between 2500 and 10000 square feet.
How much do coworking spaces make in India?
In India, there are a lot of coworking spaces opening, therefore the question is: how much do coworking spaces make? They are. Given the coworking surge in India, how quickly these spaces are breaking even is more important right now.
In the industry, which is just about 2.5 years old in India, over 100 such venues have appeared. Most of them approach it more as a real estate gamble, usually with an eye toward how conventional business districts are operated.
The network the coworking space founder or owner has within the ecosystem is where the route to prosperity in the industry starts. And only a few of them understood it correctly.
Numerous elements affect a coworking space's success. One of these is operating the facility as a rental or on a revenue-sharing agreement with the owner until the space's founder or promoter purchases the property.
Simply put, if we observe, the shorter the time it takes to break even, the better the occupancy at the location. However, the idea of just packing a centre with coworkers will do nothing except destroy a business.
Frequently Asked Questions
Q.1. What is the future of coworking space in India in 2023?
Coworking is a fantastic option because it offers a group or lone worker all the advantages of coworking with minimal negatives. You won't have to worry about upkeep or utility costs if you rent.
Q.2. Is there a difference between a virtual office vs coworking space?
A coworking space offers a physical workplace and on-site amenities, but a virtual office gives your company a registered business address and remote services without the need for real space. This is the main distinction between the two types of offices.
Q.3. Why coworking spaces are better?
Coworking spaces assist businesses in filling a specific need as more choose remote and hybrid work options. In contrast to working only from home, coworking provides social activities, networking opportunities, and general human connection.
Work is evolving, and coworking spaces are becoming significant challenges. By promoting a flexible and collaborative work environment, they not only provide people plenty of freedom to flourish but also aid enterprises in taking a giant stride forward in terms of business expansion.
Get in touch with our consultants at FranchiseBazar to know about the top Coworking Space franchises in India. We keep ourselves updated with the latest franchise opportunities in India. We help entrepreneurs and business owners connect with prospective investors using our unique concepts.
Written By: Shivani Kumari
Written By: Yukta Palekar
Written By: Moni Evangilin
Written By: Nitika Jindal