- In order to secure their income, coworking spaces are trying to keep as many members as possible while resisting the requests for discounts
- Many coworking spaces have started providing information about external support services to their customers so the members can benefit from government aids
- As many long-term members ask coworking spaces for discounts or cancellation for their contracts during the pandemic, the coworking spaces are using the same negotiation tactics with their landlords.
The Covid19 situation has been affecting most businesses, and so far, there does not seem to be any end to the situation. Like most companies, coworking spaces are hit with the pandemic and are experiencing the same issues. While the situation is unpredictable and any kind of planning to curb the condition is not hugely impactful, quick solutions are needed to overcome the catastrophe. In this article, we will see how coworking spaces deal with the pandemic and what initial steps they are taking to restrain the situation.
Securing the source of income
As the social distancing norm continues, more and more people are working from their homes. This situation has raised a massive issue for coworking spaces, whose whole business model depends on people from different backgrounds coming together to work in a curated workspace.
In order to secure their income, coworking spaces are trying to keep as many members as possible while resisting the requests for discounts. As long as the coworking space’s own rental costs are maintained, they give some leeway to their customers.
Many coworking spaces have started providing information about external support services to their customers so the members can benefit from government aids. They are also offering rooms that have been canceled during the crisis to their members as an upgrade or downgrades, depending on their needs.
Some coworking spaces have paused contracts as long as the lockdown continues, so members are not urged to resort to cancellations. For the days, the workspaces are inaccessible; the coworking spaces offer free days or vouchers for the remaining days of the contract. These steps encourage members to come back once the pandemic is taken care of.
Additionally, many coworking spaces are offering “at home membership” or “virtual coworking” conferences in order for members to stay connected with each other and space. Office space in South Delhi is a good example to look at it.
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Almost two-thirds of coworking spaces rent their premise, with half of their monthly expenses going in as rent. Therefore, landlords are set to play an essential role in the future of this business. If lower rental prices are not met, insolvency risks are expected to rise, especially if the number of paying members reduces over time.
As many long-term members ask coworking spaces for discounts or cancellation for their contracts during the pandemic, the coworking spaces are using the same negotiation tactics with their landlords.
Since some countries have allowed the suspension of ren during the crisis, the coworking spaces are making good use of such legislation.
Some coworking spaces are also laying off their employees to cut their expenditures. In some countries like Germany and Austria, coworking spaces have sent their employees to government-paid work to avoid sudden layoffs.
Moreover, many office spaces in Delhi have stopped hiring new employees altogether.
Adapting business model
Usually, a business model is interrupted when the supply and demand chain is obstructed by some calamity. Shocks cause a disruption in supply or demand or both, and the new prices dictate a new balance.
While the prices are not the only governing factor in the market, the current crisis is much stricter due to the lockdown, where people are not allowed outside of their houses. Firstly, the supply chain has crumbled, and the following government measures caused the demands to dwindle as well.
Moreover, the restrictions are not the same at every place. Some places are offering the movement of the public in a restrained manner, others not at all. This level of uncertainty and ambiguousness has also been the cause of the decline in the economy.
The steps coworking spaces are taking in this scenario include:
- Desks being placed at a greater distance
- Installation of plexiglass sheets for partitioning
- The more frequent and thorough cleaning process
- Offering more online services such as virtual workspace and webinars
- Access ban to non-members