Once you have registered your business, the next thing you are probably thinking of is where you will work from. Heck, you are thinking of this long before you even register the business, and if you have a team, working from home will probably not be the best option.
Acquiring an office space in Nairobi or any other major city can be capital intensive and especially for small and medium-sized enterprises.
You will need to pay a security deposit (most of the time, a three-month deposit is required), pay the first quarter rent, register the lease, pay legal fees, furnish the office, install telephone, and internet services, among other things.
This is a big cash outlay for new businesses, and when starting the finances can probably be used for other expenses such as research and development, marketing or purchasing your raw materials, recruiting the right personnel, etc.
So what option does a business have apart from leasing office space on its own? In this article, we discuss the coworking option, which is currently gaining a lot of popularity here in Nairobi.
According to Wikipedia, coworking (without the hyphen) is a situation in which several workers from different companies share an office space, allowing cost savings and convenience through the use of common infrastructures, such as equipment, utilities, receptionist, and custodial services.
The coworking movement is believed to have started in San Francisco in the United States in 2005. Since then, the number of coworking spaces and available seats has doubled every year.
The growth of small and medium-sized enterprises has contributed to the growth of the coworking space. As more and more companies set up, the demand for working space goes up, and this has helped favor the industry.
The growth of SMEs is important for any country as they are one of the main economic drivers, especially in emerging markets. A coworking space does not only save you the setup cost and time but also gives you the benefit of working in a community.
Being a freelancer or small business can be difficult when you do not have a sense of community. With coworking spaces, you still work by yourself but not alone. You will be introduced to many individuals that serve as resources to your business. Some spaces also provide educational, partnership and networking platforms that help grow your business.
Other benefits of coworking spaces include:
With the popularity of the coworking space growing, the trend is not only recommended for startups but also corporates and other diverse businesses.
We have several companies here in Kenya that started in coworking spaces, and while others have grown in numbers to the point of moving to their own office spaces, some have increased their working area in the coworking spaces.
These companies include Uber (Kenya), which has since moved from the coworking space as their numbers increased, Fuzu, Mdundo, Swvl, Liquid Telecom, among others. Globally, companies that started in coworking spaces and have grown to become multimillion companies include Instagram, Spotify, Hootsuite, Uber, etc.
There are several coworking spaces in Nairobi with amazing interior designs that make them such ideal places to work from. Most spaces offer the same services with different products at different prices.
Other services you will enjoy from the coworking spaces apart from the space are:
The coworking spaces are increasing in number, and the global coworking growth study of 2019 estimates that by the end of 2019, we will have 18,287 coworking spaces worldwide and 25,968 by the end of 2022.
The industry will grow and bring with it fresh trends. So for any business, startup or existing business, small medium or big that may require office space and is not up for the traditional office space acquisition, look into the co-working spaces and get one that best suits you.
Companies also looking to expand into other regions can look into coworking spaces instead of the traditional office spaces as a way of saving and collaborating with other companies in the spaces. Ten spaces that come on top of my head when I think about coworking spaces in Nairobi in no particular order include;
And there are so many other spaces that you can choose from. So if that deposit payment or that long term lease was your reason for not starting that business, go for it. The supply in Nairobi is in excess compared to the demand. There is enough coworking space for all of us.
The more the spaces that exist in an area, the more profitable each space becomes. This is because more spaces can communicate the concept more widely. So hopefully, we can see more spaces coming up, more in Nairobi, and new ones across other towns in Kenya as this will help in startup creation around the country without the fear of thinking about the office set up cost. More startups will help with job creation, better provision of goods and services, adaptation of new technology trends in different industries and overall growth in the economy.
This article was written by Alice Chege, a Finance Consultant at Zenuha.