Before the corona-virus outbreak hit the economy around the world, one industry that has been growing at a great pace is the Co-working space companies. However, this is not the case post lockdown. Co-working companies are facing real financial challenges with operators and leasing agreement issues due to social distancing amid COVID-19 pandemic.
Most of the business experts believe that the impact will be short term and even if it is not, there are opportunities along with challenges that co-working spaces can utilize, in the time of uncertainties.
There is no doubt that co-working space providers are facing the issues already, and if you look closer, not only they have the future uncertainties, but the clients who have paid for the spaces are too taking a step back and asking for returns and contract hold during lockdown.
As per reports, some of the biggest co-working spaces companies have shut down in the past three weeks, in line with more and more businesses are switching to work from home amid COVID-19 situation.
The first and the most problematic scenario is to maintain the infrastructural changes occurred, due to lockdown. Most of the places are designed as per the previous co-working module, which used to be packed for professionals and designed for start-ups and freelance teams. Now, companies will have to reconfigure the workspace and rethink about the safety concerns, even if everything gets back to normal. Due to behavioural changes and health concerns, more and more businesses will demand bigger spaces at lower charges. Investing for better infrastructure in such critical times are a burden for co-working companies, which will negatively affect the business.
Due to the work from home and social distancing situation, more than 40% of the co-working companies have witnessed a negative impact on the business. As per, the latest survey of over 15000 co-working spaces around 170 counties by COWORKER, 72% of them has mentioned a significant drop in the number of people that used to share their workspaces.
Co-working businesses are also confronting a slowdown due to the economic dilemma as a consequence of the outbreak.
Managing a good occupancy percentage is getting a major problem for co-working office providers during the COVID 19 crisis. Hence, retaining the existing clients and fulfilling their requirements for waivers during lockdown brings more burden on the operators.
When it comes to working virtually, companies are now getting comfortable with work from home setting during the pandemic. Subsequently, co-working spaces now have to adjust and reshape their spaces with virtual office arrangements. In addition to this, demand for private rooms, conferences rooms and cost-effective arrangement will rise in the future. So, the real struggle would be to invest in virtual office settings without a stable cash flow.
There is no doubt that the impact of the corona virus outbreak will last longer than we can assume as people have accepted the ‘new normal’. This is the reason why health and safety concerns are the major reason why the co-working business is going down, and start-ups are asking for waivers and hold of agreement.
The measures for sanitation with minimal touch setting, screening machines, hygiene, and protective gears are required post lockdown. However, companies understand the changes in customer behavior, this could still take a lot of time and efforts to revamping the entire co-working culture from scratch.
Most of the co-working companies for start-ups have already started with their Business Continuity and Disaster Recovery plan, which can effectively help during the current situation. They can offer a space with limited staff solutions or alternative work culture, where most employees can operate from coworking office space on one day with other ones from home, and vice versa for the other day. Also, operators can utilize flexibility and discounts to at least recover from the loss.
Everyone expects to pay only for the services they are getting and these days, saving money is the best option for financial stability. Co-working Office spaces on rent can cater their existing clients with reasonable discounts and split pricing structure, where customers can avail cost per desk, and consider the prices to continue the agreement. Additionally, operators can offer special conveniences with all-inclusive agreement to attract more renewals for the eventuality.
Most of the start-ups, SMEs, and freelancers have demanded full waiver of rentals, which is the biggest problem for co-working businesses. Therefore, co-working companies are now coming together to help each other with their landlords and legal proceedings. Some of them are also finding short-term financing options for the community so that the operators can come up with an innovative plan to save the business, and pay all the bills within 3-5 months.
Regardless of whether the pandemic will really change the working culture permanently for the co-working communities or the drop in the business can be controlled with business continuity and disaster recovery plan, they play a huge role for the start-ups looking for affordable office spaces. Co-working companies are evolving as per the demands, and there are many reliable companies, providing the facilities with post lockdown requirements. Talking about Co-working spaces, Sky Space Co-Working Space is among the most reliable co-working spaces in Indore, taking all the necessary measures to redefine the working environment for start-ups and freelancers. located in the heart of the cleanest city in India, we assure you enhanced productivity, community building, hygienic environment, and a big space to maintain social distancing even while working within a team.