Many ills plague the Nigerian business sector. Top of the list is the high operational cost of doing business in the country caused by poor infrastructure, excessive levies, regulations, and many other factors.
Although the country ranked 131 on the latest Ease of Doing Business Ranking by the World Bank, moving up 15 places from their former position, the realities on the ground still differ from what's on paper.
Nigeria’s high operational cost of doing business has caused the fall of many startups, as they have to battle unstable power supply, limited access to credits, rigid rent payment system, multiple levies, and payment policies.
The Nigerian government has updated some reforms to ease the business climate for SMEs and MSMEs. However, its rigid rent payment system and unstable electricity, and high-cost internet still pose a problem for business owners.
According to PWC, electricity accounts for 21% of the costs of daily business operations in Nigeria. Rent also accounts for 17% of that effect.
Ada Osakwe, founder of Nuli Juice--- an indigenous food company that manufactures fresh foods and beverages, told PWC that Nigeria’s rigid rent system is one of her challenges. According to her, a property owner requested that she paid years of upfront rent for a physical space.
The request is highly unfavorable to a startup trying to get some footing. The good news is, the co-working space model is looking to bridge this gap in Nigeria.
Co-working space business model
Co-working spaces are shared office spaces that allow business owners and individuals to work independently in a workspace.
The spaces help businesses cut off overhead costs by providing them with affordable office spaces, flexibility, room for collaboration and networking.
It fixes the need for stable electricity, internet, and exorbitant rent system for SMEs and MSMEs while creating room for growth. Co-working space serves as a valuable alternative to traditional workspaces.
Since its entrance in Nigeria in 2011, through Co-Creation Hub (CcHub), the number of co-working spaces has risen. Startups like Wennovation, Venia Hub, CapitalSquare, Cre8 Space, Leadspace, Litcaf, Musterpoint, Ventures Park, and many others are launching to help businesses thrive in the face of rigid government policies.
While the benefits of co-working spaces are obvious, Nkechi Oguchi, CEO of Ventures Park highlighted the specific advantages co-working spaces have over traditional offices.
During my conversation with her, she recounted that co-working spaces are highly affordable. They offer startups cheaper rent models compared to the bulky and rigid rent models of the traditional office.
While startups can choose a subscription model that best suits their budget and cancel at any time they deem fit at a co-working space, traditional offices require upfront rent.
In a co-working space, subscription payment accounts for office infrastructure. Co-working as a service decentralizes the cost by spreading it across subscribers. But in a traditional workspace, business owners have to rent a space, furnish and cater for other infrastructure it requires.
Nkechi also mentioned structure as another benefit for co-working spaces. Although companies are increasingly adopting work-from-home, it comes with its downsides of distractions that affect output and productivity still abound. Co-working spaces, on the other hand, allow clients get their work done in a well-structured environment void of distractions.
Flexibility is another benefit the co-working space offers. Aside from the flexibility in subscription models, co-working spaces give startups the flexibility to grow their business effortlessly. With a traditional office setup, companies prefer to hire people within the same city as they need to maximize their infrastructural costs.
Nkechi opined that this is very limiting, as they lose out on great talents across the world. However, with co-working space, business owners can have their footprint across the globe, with their staff piloting the business from workspaces near them.
She also mentioned that traditional office spaces limit collaboration and interaction to people of the same workspace or similar mind-set. But co-working spaces give their subscribers access to talents that traditional workspaces will isolate from them.
With the Covid-19 pandemic still in town and business models evolving, SMEs and MSMEs are embracing co-working spaces. To meet the increasing demand flooding the industry, experts predict the number of co-working spaces worldwide to double to 40,000 by 2030.
Ventures Park and its co-working space journey
Ventures Park launched in June 2016 to create a space that inspires startups, creatives, and entrepreneurs to fulfill their dreams and build real solutions for Africa. They initially started as a ventures platform providing innovative Africans with funding to scale their businesses.
However, they soon realized that people needed more than just funding to pilot their businesses, they also need a conducive work environment and a community to help them grow. There is a deficit of enabling business infrastructure. To bridge this gap, Ventures Park launched to enable startups to build innovative solutions.
The Park provides startups and creatives alike access to enabling infrastructure, supporting communities, mentorship, and other support systems they need to build a flourishing business.
Nkechi recounts that the Ventures Park journey has been challenging, but the firm pushes on as it aims to build the future of Africa. According to her, “Ventures Park is catalyzing entrepreneurship and innovation to provide people access to infrastructure.” It is this vision to build the future of Africa that made Ventures Park launch in Abuja.
This was despite most co-working spaces being in Lagos due to the high number of tech-focused businesses in the city. As the team at Ventures Park saw it, concentrating all the support systems in one city was resulting in a deficit in other regions.
The need to strike a balance and carry other regions along spurred Ventures Park launch in Abuja. The firm saw the need to build an ecosystem for the northern region, providing an enabling environment for founders and entrepreneurs to thrive.
Launching in Abuja had its challenges but the firm's influence in the growth of Abuja’s tech ecosystem and entrepreneurship cannot be over-emphasized. The influence extends to other parts of northern Nigeria.
Building a design that will present Ventures Park as a human-centric firm was a top priority. Nkechi revealed that design was a critical part of Ventures Park’s offerings. According to her, they wanted a design that spurs people's creativity and also makes them forget their limitations.
Ventures Park impacts the way co-working is seen even in the design concept. According to Nkechi, Ventures Park were the first company to use shipping containers in their co-working spaces. With its unique design concept, Ventures Park allows for some level of customization. They allow subscribers access to customize in a way that replicates the language of the space.
With a hardworking team that works tirelessly to get the Park working, Ventures Park has grown to about 150 co-workers and over 30,000 virtual subscribers. Sometimes, the Park gets up to 3000 visitors in a month. According to Nkechi, the Park serves up to 75 cups of coffee in a day.
To replicate work-life-balance, Ventures Park devotes its time to create a TGIF experience for its subscribers. Nkechi reveals that they have streamed few movies at the Park. The Park has also held events that spurred interaction and networking opportunities for subscribers.
Ventures Park has also hosted top tech and government personalities like; Jack Dorsey, the CEO of Twitter, Vice President Yemi Osibanjo, various foreign Ministers and Ambassadors.
The Ventures Park model is not just about stable electricity and internet connectivity. It is more about experience and value. “We craft an experience that inspires our community to engage, think outside the box, and build great businesses. Our design is human-centric to encourage engagement and productivity,” Nkechi Oguchi, CEO of Ventures Park.
How Ventures Park is surviving Covid-19
The lockdown that accompanied the Covid-19 pandemic resulted in the shutdown of many industries. Ventures Park and other similar companies had to shutdown their spaces as people moved to work from home.
Working from home can be challenging as it has distractions that affect productivity. Aside from unstable power supply or internet, working from home is not conducive for meeting clients. During the lockdown, people experienced these challenges and the need to embrace co-working spaces.
Although the company suffered a drop in revenue during the lockdown, once it ended, business picked up at a faster rate. Subscription grew as new clients signed up while old clients were all too happy to return to work.
Before the pandemic, the Park had two communities; physical and virtual. Although the physical community was more vibrant than the virtual, the pandemic opened a window for Ventures Park to jump on the virtual to support the community.
Ventures Park understood their community was also going through a rough patch due to the pandemic, so they created virtual sessions dubbed “Business Unusual” to support them. The session aimed to teach their clients possible ways to navigate through the crisis.
Through these sessions, the Park replicated some of the physical events they used to have at the space. They also conducted mental health sessions to help their clients stay mentally fit throughout the pandemic. Ventures Park further deepened their relationship with their communities’ through virtual parties and games conducted to boost their spirit.
"This system included a health check to establish a baseline for every person working out of the Park. The second phase was an establishment of a health screening point that was manned by a nurse, who conducted daily temperature check, oxygen level screenings, and sanitization. An app supports Sentinel X which allowed us to see how many people were screened daily and how many flags were raised", Nkechi said.
The Park also put in place routines that allowed constant sanitization of surfaces and high touchpoints in the space. They also conducted deep sanitization weekly and provided sanitizers at visible points for self sanitization.
They also instituted a no masks, no entry policy, adequate social distancing, and a cap on the number of people who accessed the Park daily.
The co-working space industry is revolutionizing the way we work and giving businesses reasons to decentralize and embrace remote work.