All you wanted to know about co-working

Co-working is the new buzz-word across start-ups and small businesses. The recent botched attempt to take WeWork, a co-working company, public only added to the popularity of the term. This global phenomenon has now reached Indian cities as well. A co-working environment offers savings on costs, reduces logistical hassles and allows flexible usage of space. It is available for established corporates, start-ups and freelancers.

Co-working is a shared workspace offered by a service provider, where an employee or a freelancer can ‘hire’ a seat, plug in their laptop and get the day’s work done. The workspace could be located in a commercial complex, a café or even a library. Apart from electricity and internet facilities that allow you to plug-and-play , co-working spaces usually come with amenities and services such as conference rooms, high-speed Wi-Fi connections, refreshments, recreation spaces and housekeeping facilities. Usually, start-ups, freelancers and independent professionals avail co-working facilities.

In India, co-working is at a nascent stage and has started making in-roads in cities like Bengaluru, Mumbai and Pune. Given that there is a robust demand for quality office space, co-working provides access to an office environment. Co-working companies in India (Awfis, Regus) provide not just flexible office spaces, but flexible leasing options as well. They offer co-working packages at affordable prices to attract large occupiers as well as solo workers, who are increasing in number with the rise of the gig economy.

Ample funding from private equity investors and the Centre’s push has given rise to burgeoning start-ups and SMEs in India. For new firms, office rental accommodation in the cities can be prohibitively expensive. The rise in co-working spaces helps fledgling companies save on rental costs by dividing them between many firms. For instance, even for established companies, fixed rental real estate costs form an estimated 9-12 per cent of operating costs. Indian cities — metros and Tier-II cities alike — have seen large investments in co-working in the last few years.

Co-working helps independent consultants and freelancers too. Instead of sitting in coffee shops or setting up offices in garages, start-ups and the self-employed can utilise co-working office spaces which they get to rent on a daily, monthly, yearly or pay-per-use basis. One can rent an entire private office space or use shared desks, depending on the requirement. Co-working also helps to brainstorm ideas and provides networking opportunities. Individuals can work from convenient locations close to their residences without having to travel much, thereby bringing down commuting expenses as well. Working in a collaborative environment, particularly if you are start-up, helps to grow your employee base or arrange meetings with investors.

Co-working offers flexibility without any liability to lock in your capital security deposit, as is the case with conventional office space. Co-working players in India are adopting aggressive pricing strategies to lure both companies and individuals. For instance, in Mumbai-BKC, as per a Knight Frank report, average occupancy cost for a traditional office works out to about ₹27,000 per seat per month. This includes office rent (₹240 per sq ft per month), common area maintenance (₹15 per sq ft per month) and operating expenses (₹15 per sq ft per month). But for a co-working space in the same location, the total cost works out to ₹23,800 per seat per month. Co-working helps you break away from the 9-to-5 work day to flexible work timings too. If you are a night-owl, then there is office space that can be booked only during night hours.

On the downside, co-working is not very cheap, you may not get the privacy you expect and you may have to jostle for co-working space with larger clients too.

Sharing is saving if you’re a small business.

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