How To Start A Coworking Space Business In The Philippines: If you were thinking about starting a coworking space business in the Philippines, let me tell you directly just how smart I think you are! I say this because, in our modern world, coworking space businesses in the Philippines can be very profitable if managed correctly; however, similar to other businesses, there are many pros and cons for starting a coworking space business in the Philippines.
Today’s article will explore all you need to know about how to open and start a coworking space business in the Philippines. We will cover each step, look into the pros and cons of starting this kind of business, and ultimately answer the question of whether a coworking space business in the Philippines is profitable?
How To Start A Coworking Space Business In The Philippines
1. Design Your Coworking Space Business Plan
The most important factor in starting any business is the initial plan. This can be complex or straightforward, and it’s OK if you change ideas along the way, but when starting a coworking space business in the Philippines, it is key to create some plans and stages for the business.
Filipino wealth has a free downloadable business plan template that can be downloaded by clicking on the business plan tab at the top of this page.
This is also an important stage where market research will need to be conducted. If you are planning to start a business in the Philippines, it’s best to focus on the market research early, including the demand and opportunities for a new coworking space business in your area.
One last area you may wish to add when designing a business plan is the element of differentiation. In other words, how will you be different from your competition? Even if there is very little competition in your area, it’s still very important to stand out and manage a business that customers are always looking forward to visiting again.
For example, you may wish to install comfortable furniture, private rooms where the customers can control the temperature, or any other comforts that will result in a more pleasurable experience. It was once said that the key to a successful business was making customers happy.
2. Build Your Foundations
The next stage when starting a coworking space business in the Philippines is to build the essential foundations of the business.
The essential foundations can fall under several categories. The foundations are slightly more in-depth and cover more subjects.
For example, if you are located in Manila, you may wish to start a coworking space in the financial center of one of the cities, such as Makati. Therefore when building your foundations, you may wish to contact local building owners or contractors and get the process moving.
In other words, building foundations is more action rather than planning. In the beginning stages of starting a coworking space business in the Philippines, there are several topics that you may need to investigate further. Some of these may result in you slightly changing your ideas of the direction of the business. This is why building the foundations can sometimes be a lengthy process.
3. Raise Business Capital
So how much does it cost to start a coworking space business in the Philippines? The total cost to start a coworking space business in the Philippines is very similar to that of a call center. Still, ultimately this would depend on several factors, including the size, location, facilities, etc.
However, considering the movable components of starting a coworking space business, it is estimated that the total amount you will need will be approximately 500,000 pesos for a small center within the city.
However, starting a coworking space business can be much lower (or higher) depending on the factors mentioned above. It is possible to start a coworking space business for as low as 200K pesos, but this will not allow you much of a survival budget. You may need to become profitable very quickly to avoid going into debt.
Therefore at this stage, you will first need to find out exactly how much you need and then take the steps needed to raise the capital.
There are several ways to raise capital as a new business in the Philippines. One of the most popular is Angel investing. This is a great way for businesses to advertise their business idea to investors. In return, investors will receive a small percentage of the business and potential future profits (depending on the business arrangements).
Alternatively, business loans are also a great option. It’s always recommended to speak to an independent financial advisor before starting any business or applying for any loan.
4. Complete Legal Registration
Previously we’ve spoken about the stage is to register a business in the Philippines and also the steps to take if you are a foreigner and wish to start a business in the Philippines… Therefore, we will not go into too much detail today; however, registering a business in the Philippines is an important step and can take several weeks or months depending on the current demand.
When setting up a brand new coworking space business in the Philippines, there are several key elements that you will need to focus on, and these will be mentioned throughout this article. However, you may wish to postpone registering your business until you have all the requirements.
For instance, when starting a coworking space, the physical location is important for the business’s success and registration. This is why extra care and consideration should always be made at this stage.
5. Network With The Local Community
If you have ever researched the 80/20 principle, you’ll know that 20% of your customers are responsible for 80% of your profits. This theory has been criticized, while others suggest that the 80/20 principle is closer to 90/10 or 99/1.
What is true is that networking with the community and building those VIPs are important to any business.
As a coworking space owner, you know that not all professionals will require the services of a coworking space. In other words, it’s a very particular type of customer interested in your business. This is why it’s important to satisfy every customer and treat them like VIPs ..because they are.
Word of mouth, especially with this kind of business, travels fast. Suppose you can provide a fun, relaxed, and comfortable environment for different customers. In that case, you will have a much easier time building a coworking space business in the Philippines.
Networking does take time, and you may need to speak to many different types of people before building relationships. But do not feel disheartened at this time as this is a normal networking process. In time, professional relationships will be built.
6. Marketing And Awareness
Another consideration is your new business’s early marketing and awareness. This is not always carried out, and there are pros and cons to marketing naturally.
If you are in a fantastic location or have the right strategy, you may be able to gain a great deal of free marketing without spending any money whatsoever. However, if you are in a remote location or feel marketing would be beneficial, you may wish to start a marketing campaign with the local community.
Awareness marketing is often applied at the early stages of a new business or product. Awareness marketing is a way new businesses can advertise their services and build awareness with the local community. This type of marketing aims to attract those early customers, or in some cases, it is used only to build awareness.
As we discovered earlier, there are particular types of customers interested in your business. Those who work remotely are often the key customers, so marketing is best performed when targeted.
Finding out your ideal customer is very important if you have a slightly different business model. This will help you in the early stages of marketing.
7. Open Your Coworking Space Business
One of the final steps of starting a coworking space business in the Philippines is to open up the doors and begin business officially.
If you are running a membership option, you may wish to start accepting memberships before officially launching your business. Some business owners also decided to operate a soft launch, a method used to test business operations before fully opening their services.
Soft launches can be very useful as they allow a business owner to see any problems, risks, or opportunities in the early stages of business. For example, as a physical business, you will need to ensure that there is business safety within your establishment. This may be picked up in the early stages but will need to be fixed as soon as possible.
Bonus: Coworking Space Equipment
This is a bonus step as this may be completed at the beginning stages of the business or towards the end. However, this stage is one of the most significant steps as it is one of the most costly.
You may work with businesses that can provide equipment in return for a higher rental price (if you are renting instead of buying). On the other hand, you may find some coworking space facilities that will require you to purchase or equipment, including air conditioning units and fiber optic cables.
Depending on your business vision, there may also be some extra equipment such as tables, dividers, conference call phones, furniture, decorations, etc. These will all impact the overall cost of starting your coworking space, and this is why extra care should be taken during the planning and development stages.
Is A Coworking Space Business Profitable In The Philippines
Coworking space businesses can be very profitable, but this depends on how well the business is managed. A coworking space can easily become unprofitable if the overall expenses are high, but memberships/income are low. But if managed well and the demand is high, a coworking space can be a profitable business in the Philippines.
How much a coworking space business can earn does fluctuate. There is no fixed price. Some areas in the Philippines are known to have higher than average electricity prices, which can eat up your profits.
In addition, if you are in a metropolitan area such as Manila, you will likely be able to charge a higher amount per customer and therefore earn a higher profit. But again, the business expenses may be high, so these are all areas to investigate when starting a coworking space business in the Philippines.
Pros And Cons Of Starting A Coworking Space Business
There are many pros and cons when starting a coworking space business in the Philippines. Common benefits include flexible business models, opportunities for several income streams, and scalability. Disadvantages include lockdowns and pandemic restrictions, emerging markets, and high electricity prices.
Depending on your location, there may also be several advantages and disadvantages of starting a coworking space business in the Philippines. There are also some risks and opportunities you may wish to dive into further to fully prepare yourself to succeed when opening a coworking space business.
For example, the recent pandemic challenges of starting a coworking space business. Even though there are great opportunities within this industry, several developments are out of our hands, such as continuous lockdowns.
Things To Consider When Starting A Coworking Business
Today’s article explained starting a coworking business in the Philippines and included some important areas. If you are looking for the highlights, here are some important areas when starting your own coworking business in the Philippines.
- Additional Incomes
- Business Capital
- Business Growth And Scalability
- Customer Membership
- Electricity Usage And Price
- Equipment And Facilities
- List Of Expenses
- Networking And Marketing
- Private Offices / Public Offices
One last area of consideration is the overall experience. When starting a business such as a coworking space in the Philippines, many business owners focus on the business side, such as the calculations and processes. Focusing on these areas is essential, but it’s also important not to neglect the overall feel of your business.
The atmosphere of a business such as a coworking space is commonly ignored. Some businesses have everything they need to be successful, but there is something wrong with the vibe. Maybe you have experienced a business like this…. you can’t say exactly what it is, but something doesn’t feel right, and the vibe is not right.
I’ve experienced this as an entrepreneur several times. Most customers, whether they know it or not, act on feelings. Therefore if you can provide an environment that they enjoy and are excited to come back to, then you have won half of the battle.