The greatest impact of globalization is that it has given room for businesses to enhance their operations in the global dimension. Numerous business opportunities are emerging as a result of the robust influence of globalization. In this case, one of the major business opportunities available in the global market today is the co-working space. Recent studies show that the demand for co-working space is rising drastically globally (Pacchi, 2017). The popularity of the business as an alternative to traditional office spaces is also on a huge rise due to its cost-effectiveness, flexibility, and networking opportunity. This paper contains in-depth research that focuses on the approach of opening a co-working space in Dubai. The key parts of the research include; market analysis, location, business model, facility design and Amenities, financial projection, and marketing and branding.
Market Analysis
Dubai has witnessed a significant rise in the demand for co-working spaces in recent years. The city has become a hub for innovation and entrepreneurship, with an increasing number of freelancers, startups, and small companies looking for affordable and flexible workspace solutions (Yasin et al., 2021). There are countless related businesses in the region. However, Dubai remains one of the most strategic regions for setting up a co-working space business. This is because of the high occupancy rate and well-organized pricing structure in the market. According to Ismail et al. (2018), the occupancy rate for the business is approximately 80% as per the 2019 statistics, with a pricing structure of about AED 3,500 to AED 20,000 for private amenities per month. The data is greatly promising for any investor worldwide because it guarantees the business’s profitability.
The targeted audience for a co-working business in Dubai will include freelancers, startups, and small companies that are plenty located in the region. The business also targets the increasing number of technology, finance, logistics, and tourism companies that increase the demand for affordable co-working spaces for their operations. The unique selling point for the business in Dubai is quality and affordability. The company provides high-end and affordable services to local and international investors.
Location Analysis
The most appropriate location for setting up the business is in Downtown Dubai. Ideally, this popular area is best known for its central proximity and location near major business districts. It is also the best location because of its connectivity to other cities and parts of the world. For instance, its proximity to major airports like the Dubai (DXB) Airport, Sharjah (SHJ), and Ras al Khaimah (RKT) and also being the home to major landmarks like the Dubai Mall and Burj Khalifa makes the location the best for our business.
Most entrepreneurs, both from local and international origins, look for co-working spaces that are well connected to the outside world, which makes Downtown Dubai a priority to us. Most importantly, Dubai is governed by several zoning laws regulating business operations within the city. However, the laws that will affect our operations will be the residential zoning law which regulates the functionality of residential and commercial businesses.
Analysis of the Business Model
According to research, the business model to apply while operating a co-working business in Dubai varies significantly depending on the location, targeted audience, and the specific additional services the company offers (Roth & Mirchandani, 2016). Nevertheless, some common aspects are consistent in the business plan. Key examples include the flexibility of the pricing structure, strategic partnership, and additional services.
The prevailing market rates for a co-working business are guided by a flexible pricing approach that applies to an hourly, daily, or monthly rate. In regards, we can structure our pricing strategy on a monthly rate to be consistent with the country’s business model. Membership options for the business provide different membership options that cater to the needs of different operators (Roth & Mirchandani, 2016). The options range from a basic plan providing access to a shared workspace to a premium option comprising a private office and additional services.
Additionally, services to offer can include interior designing options. Due to the city’s booming construction and real estate companies, Dubai is popularly known for its increasing number of world-class luxurious and innovative architecture (Alawadi et al., 2018). As such, this is a great opportunity for us to invest in a bid to boost our financial revenue in the marketplace. There are also opportunities for mergers and acquisitions in the Dubai market. For instance, companies such as Modern Working, WeWork, and LetsWork have established their operations in the city, and they can be a great aid for the business’s success.
Facility Design and Amenities
In order to have a successful co-working space in Dubai, it is essential to consider the affordability, flexibility, and quality aspects. A standard co-working space needs to have the following design. First and foremost, the design should have a flexible workspace (Qaed & Almurbati, 2021). This should contain comfortable and conducive rooms like remote private offices for the executives, shared desks for the staff, and meeting rooms for conferences and meetings.
Another essential feature is a high-speed internet facility. It is nearly impossible to design a co-working business without a high-speed and stable internet connection; thus, this is a top priority because it helps the users to experience uninterrupted connection at work (Qaed & Almurbati, 2021). Scanning and printing facility also make one of the most important parts of the design. The facility allows users to print, scan, and process files and documents easily.
Moreover, event space is vital in any co-working space in Dubai. The busy and operational businesses in the city need the space to freely engage in meetings, seminars, networking, events, and workshops within their co-working spaces. The lounge area should also be included in this structural design. It basically involves a special place where the users can socialize and relax during breaks. A kitchen and pantry facility to offer food and beverages is needed in the facility. Above all, eco-friendly initiatives like security programs need to be perfectly incorporated into the structural design. This includes both cyber security and human resource security personnel. Examples of eco-friendly initiatives include fire safety gargets, hiring Security companies, developing cybersecurity measures, and implementing access control systems.
Financial projection
Starting the business is quite expensive in Dubai compared to other regions like Uganda. However, depending on numerous factors, the cost varies significantly. Some key factors that influence the cost include; location, size of the facility, and ultimately the type of the facility in terms of the quality of services they offer. Based on the local business market search, the general estimated cost might range from AED 150,000 to AED 450,000, and it can even go past the mark. The occupancy rate is high at about 80%, which also makes the return on investment high. With a target of AED 75,000 per month, it means that it will take no more than six months to reach breakeven and achieve profitability.
The following are the areas to be included in the budget; staffing costs, furniture and equipment, legal administration fee in terms of tax and licenses, technology and infrastructure, marketing and advertisement cost, and other miscellaneous expenses. All of these expenses also vary depending on the factors mentioned above.
Marketing and Branding
Reaching the audience requires a robust marketing and branding strategy. Several strategies are popular in Dubai. The first is influencer marketing, where the company incorporates social media influencers to market the business. According to Sameh et al. (2018), other strategies include using SEO to market the company’s blogs on the Internet, referral marketing, TV and radio advertising, and Email marketing.
The brand identity should be SkyWorking space and the website SkyWorking.com. The logo needs to contain a dove flying in the sky. The estimated marketing budget should be approximately AED 10,000.
In conclusion, opening a co-working space is one of the top business ideas in the city of Dubai today. The in-depth research shows a huge entry, growth, and expansion opportunity in this marketplace. For instance, with about an 80% occupancy rate, the return on investments in the market is so high, and therefore, profit is a guaranteed outcome. Moreover, having the business in Downtown Dubai will be a great advantage to the business. The location is strategic due to its proximity to the major airports and popular landmarks like the Dubai Mall. With that being said, the cost of starting a co-working space in Dubai is high, but it is worth it because of the huge opportunities in the market.
References
Alawadi, K., Khanal, A., & Almulla, A. (2018). Land, urban form, and politics: a study on Dubai’s housing landscape and rental affordability. Cities, 81, 115-130.
Ismail, A., Schøtt, T., Bazargan, A., Salaytah, B., Al Kubaisi, H., Hassen, M., … & Kew, P. (2018). The MENA region national entrepreneurial framework conditions. Entrepreneurship Education and Research in the Middle East and North Africa (MENA) Perspectives on Trends, Policy, and Educational Environment, 73-102.
Pacchi, C. (2017). Sharing economy: Makerspaces, co-working spaces, hybrid workplaces, and new social practices. In Milan (pp. 73–83). Routledge.
Qaed, F., & Almurbati, N. (2021, November). Resilience in design: Using user persona to enhance co-working spaces design. In 2021 Third International Sustainability and Resilience Conference: Climate Change (pp. 410–415). IEEE.
Roth, K., & Mirchandani, N. (2016). The rise of co-working: A growing workplace movement. Corporate Real Estate Journal, 5(4), 314-328.
Sameh, H., El-Aziz, A., Mohamed, H., & Hefnawy, N. H. (2018). Building a successful City branding case study: Dubai. Journal of Al-Azhar University Engineering Sector, 13(48), 1058–1065.
Yasin, N., Khansari, Z., & Tirmizi, K. (2021). Exploring the challenges for entrepreneurship business incubator hubs in the United Arab Emirates. International Journal of Globalisation and Small Business, 12(2), 190-212.
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