The concept of co-working started as an economical alternative to leasing an office space for freelancers, entrepreneurs and start-ups. However, it is common knowledge that the concept has now gained popularity not only among the start-ups but also the SMEs and larger enterprises. It has especially been a boon for the SME sector. Let’s delve a little deeper.
Demand for co-working spaces increased on the back of multiple advantages offered by it which suited not just the start-up community but also the larger companies. These advantages included cost reduction, flexibility in terms of lease period and number of seats, freedom from operational and administrative load, enhanced networking opportunities etc.
Now, one of the key factors that determines the selection and finalising of an office property is the size of the office and the number of seats. From this perspective, start-ups are on one extreme of the spectrum while enterprises are on the other extreme. SMEs fall somewhere in the middle as their size/seats requirements are neither too large nor too small. Thus, it has usually been a challenge for SMEs to find a suitable office space. For instance, if an SME approached an established builder for space, usually the floor plates would be to the tune of approximately 10,000 sq ft or even larger. Even if they did find, they would usually have to settle for Grade B or C buildings as Grade A buildings rarely had smaller floor plates.
Thus, there was a clear demand and supply mismatch as far as the office space requirement for start-ups were concerned. There were more number of 10,000-25,000 sq ft floor plates being offered as compared to say a 3000-7000 sq ft area. Thus, in such a scenario, more often than not, SMEs ended up compromising either on the location or the facilities offered by the buildings.
However, with the advent of the co-working culture, you could get the desired sized office space in the best of the locations and buildings. An SME could actually now imagine being stationed in the best of the locations and buildings if they took up space through a co-working operator. Not only did this provide them with space flexibility but gave them freedom from administration and operational hassles.
In fact, it has been a symbiotic relationship between the co-working community and SMEs. While the the whole concept of a co-working model was intended for freelancers and start-ups, it has been the SMEs that has come out as the surprise element. A lot of co-working operators, who themselves claim to be somewhere in the middle of the entire co-working pyramid with respect to size, have gained from the SME demand. As mentioned above, these operators bridge the the supply-demand gap that existed in the market.
Thus, it is safe to say that the co-working phenomenon has managed to bridge a grave gap that existed in the commercial market segment-that of quality office spaces for the SMEs.