Own business: coworking center business plan
Coworking centers are a new phenomenon in the business environment, which is based on trends in the labor market. It is expected that by 2020 the share of professionals working at the “remote” will increase to 20%.
1. PROJECT SUMMARY
The goal of the project is to open a coworking center for the implementation of a range of services in the field of coworking (organizing the work of various specialists in one area, which is a “joint office”). This coworking center positions itself as a unique creative space that unites people of creative professions and inspires work.
The target audience of the co-working center consists of various groups, which include freelancers, start-ups, self-employed people, as well as people seeking self-development.
To implement the project, a commercial area of 160 sq.m in the central part of the city is leased.
Coworking centers are a new phenomenon in the business environment of Russia. The first such institution opened in Russia in 2008. To date, about 300 coworking centers have been registered throughout the country, 1/3 of them are located in Moscow. For other large cities, this niche is freer and offers many perspectives.
The co-working center is a relatively long-term investment that does not pay off immediately. The payback period for coworking centers is 1-2 years, which may scare away some entrepreneurs. Another problem is the requirement of a significant amount of initial costs. This type of business is more suitable for those investors who are focused on the implementation of a long-term project that takes into account the trends of the modern economy. The main advantage of co-working center as a business direction is orientation to economic trends. Every year the number of specialists working on the system of distance employment increases. It is expected that in Russia by 2020 the share of specialists working at the “remote” will increase to 20%. Therefore, the opening of co-working centers will now allow to occupy a free and promising niche, the popularity of which in a couple of years will increase significantly.
The volume of initial investment is 1 020 000 rubles. Investment costs are directed to the repair of premises, the purchase of furniture and equipment, advertising and the formation of working capital, which will cover the losses of the initial periods. The main part of the required investments is accounted for the purchase of furniture and equipment –44.1%. To implement the project will use its own funds.
Financial calculations cover the five-year period of the project. In accordance with the calculations, the initial investment will pay off after fifteen months of work. The net profit at an exit on the planned sales volume will make 86000 rubles / month. The yield on the planned sales is expected on the 4th month of work.
Key performance indicators of the project
Payback period (PP), month 15
Discounted payback period (DPP), month 15
Net present value (NPV), rub.241 495
Return on investment (ARR),% 8.36
Internal rate of return (IRR),% 7.36
2. DESCRIPTION OF INDUSTRY AND COMPANY
The development of the economy and entrepreneurship is very dynamic. Changes affect all organizational business processes, which contributes to the expansion of the spectrum of outsourcing and freelancing. Modern business is adapting to the new requirements and needs of the subjects of economic relations. Individual experts and professional groups are looking for alternative options for organizing the working space. Habitual offices, for the rental of which substantial sums are spent, are being replaced by so-called co-working centers – a place where you can work, hold business meetings, use Wi-Fi and have a rest.
In recent years, co-working centers are gaining popularity, since there is a tendency for specialists to move to remote work. Photographers, designers, IT-specialists, writers, lawyers – representatives of completely different professions come to the conclusion that using co-working centers is much more convenient and cheaper than renting expensive offices in the city center.
The idea of co-working centers appeared in the USA in 2005, and is relatively new for Russia. The first co-working center in Russia was opened in Chelyabinsk in 2008. To date, about 300 coworking centers have been registered in Russia, of which more than 100 are located in Moscow. However, it is still early to talk about market saturation.
This format has got along well in many countries, but in Russia it is still at the initial stage of its development and has not acquired such a scale as in some states. The reason for this lies in the specifics of the domestic economy: first, the distance employment of specialists in Russia does not exceed 5% of the total active economically active population (for comparison, in the USA 45% of employees work on “remote” or have such an opportunity); secondly, tenants are reluctant to rent rooms intended for co-working centers.