Co-working firms see dip amid COVID-19 crisis
This is not the best of times for operators of co-working spaces, as their business have seen a drop in footfalls, following the outbreak of coronavirus pandemic in Nigeria’s major cities.
With almost 100 per cent loss of customers and property portfolio investments Findings by The Guardian indicated that many of the clients have resolved to working from home as against the shared spaces with impact of the pandemic growing more in the urban centres of the country.
COVID-19, a pandemic that has gone from one city in China to almost 115 countries of the world, including Nigeria. Shared spaces are service provision model that involves individuals working independently or collaboratively in shared workplace or office but with independent activities. Essentially, users of such facilities are the self-employed, entrepreneurs, international corporations with subdivisions across countries, or company workers in private and public sectors.
It enables users to work in strategic locations without breaking a bank to pay for the costs of rents which could be weekly or monthly depending on owners’ choice and offers benefits such as constant power supply, 24 hours internet, furniture and other generation operational overheads among other enticing packages.
According to investigations, with the evolving culture of social distancing been advanced, the impact of coronavirus pandemic on the business is fast creating more void than anticipated in that segment of real estate market.
The Chief Executive Officer, Workbay Executive International Ltd, Mr Gbenga Aiyeremi told The Guardian that operators were not able to weather the storm because shared spaces is a location-based transactional business, adding, CoVID-19 has brought about massive loss to operators.
He explained, “Unfortunately ones the facility is down, everything is down too and because of the value proportion of co-working that comes with flexibility thereby attracting more entrepreneurs instead of dealing with landlords who pays yearly rent, co-working paves way for weekly and monthly rent payment. But now, because the customers who need the spaces are not coming, you can’t charge them.”
He stated that it was quite unfortunate for the operators also that some of their overheads like rents are static.
“ You pay rent to landlord yearly and some operators sometimes pay a lease of five years ahead and so it would be difficult to tell your landlord to surcharge the period when there were downturns in the business. So it’s about running at a loss and revenues are nose-diving to zero. Everybody is working from home and we are really feeling the brunt.”
According to him, the reality of the situation was that to keep the business afloat, operators shouldn’t focus on selling space alone but include some additional services as a value addition to existing model deploy for the business.
Aiyeremi who operates shared spaces in Lekki, Ikeja and Maryland areas of Lagos said, “operators are thinking of rendering some value added services that entrepreneurs could pay for whether they are coming to location to use their facilities or not. We added some of these initiatives, called ‘resource centres’ before whereby you could join a community on our platform, network and collaborate online to get things done but unfortunately, we haven’t been able to monetise such initiatives. We are trying to re-strategise since CoVID-19 is an eye opener that something could shock the business.”
He said, “We are thinking in the line of APIs that will enable us to run Digital Virtual Office via some of our APIs and so whether you are coming to our facility or not, we will be charging you for subscription using the package and some other resource centre.”
We have two categories of clients, resident and virtual. For resident category, we have lost nothing less than 10 per cent. Although, when the CoVID-19 is over, they are still coming back to use their space but for virtual we lost them 100 per cent because the category are non-residential, they alone come to your facility to hold meetings and meet with clients. Yet, they still use our addresses for their businesses, letterhead, correspondence and website but for this period of the pandemic, you can’t hold them for any kind of payment”.
The Chief Executive Officer, LeadSpace Yaba, Nonyelim Okolie told The Guardian that before the lockdown, all the chains of locations were closed because the virus was spreading rapidly and extra precautionary measures were needed to be taken.
“In as much as we want entrepreneurs to collaborate, their health also was very important. We had to encourage our community members to work remotely and be able to utilise digital tools to grow their business. We advised them on the digital tools they could use like flack, zoom and other online collaboration platforms for their meetings with their clients. The urged them to maximise the tools and gave them tips on how to stay productive.
“In as much as our locations weren’t in operation, we constantly follow up on our members and most importantly sending them opportunities that could grow their businesses”, she said.
Okolie said the whole essence of the business is to ensure that entrepreneurs collaborate and it doesn’t necessarily mean that it must be physical collaboration. She stated that through online forum, community members were also constantly engaged on the need to stay connected to their clients despite the lockdown.
‘’Because of the nature of the business, people must come to the facility, during this ongoing crisis there was no patronage. People work from home, the operators have to work from home and we advise people to work from home. There was no patronage because we had to adhere to the government guidelines and directives on staying safe, staying at home and social distancing”.
Okolie hoped that when the pandemic ends soon, businesses that hasn’t explore digital platforms should utilise them to grow their business and think of innovative solutions to proffer to current situation.
According to her, the biggest lesson learnt from the whole situation, was the fact that every business has to be conscious of business continuity measures and how to prepare for crisis by having needed structures in place.
She said, “You realise that there are certain numbers of tech companies that has emerged as a result of pandemics that had happened in the past. This is also an opportunity for businesses to be innovative enough, and create new products rather than holding unto when the crisis will end.”
In his contributions, Wole Odetayo of Wennovation, a co-working space disclosed that before the lockdown, the culture adopted was to reduce the number of people in the spaces. For instance, he said a boardroom that could accommodate 12 people was pruned down to accommodate three people were allowed to use the space.
“Since the lockdown started, we have been bleeding on room charges and other charges. The loss of revenue came from the fact that our boardroom and meeting room couldn’t be given out for special meetings. The moment social distancing came up as recommendation, space businesses slowed down and people naturally held less meetings and subscriber growth dropped and people were more conscious.” Odetayo posited that post-CoVID-19, there would be some impact as the crisis might affect a lot of things especially how people will be using co-working businesses and congregating to work.
“I suspect that post COVID, more and more businesses will adopt working from home even when some people have complained that it’s not productive because of distractions from family and not being mindful that you are met to be online and not responding to messages timely. Non essential services of every office especially those that are around product development will probably congregate in the office ones or twice a week. Except for the physical job, that requires physical manufacturing. CoVID will leave us with the culture of working from home and that will impact on co-working spaces business”, he said.