Coworking or an office lease: what a small team actually pays

When a team of five starts looking for an office, the first number everyone compares is rent. It is the wrong number to stop at. A leased office comes bare, and almost everything that turns it into a place where people can work is a separate bill.

This is a checklist, not a sales pitch. Fill it in with real quotes for your own case and see where you land.

What a lease costs beyond rent

• Security deposit. Commercial landlords usually ask for several months of rent up front. That money sits idle for the whole lease.
• Fit-out. Partitions, flooring, lighting, wiring, air-conditioning. Even a modest fit-out for a small office runs into lakhs, and you leave it behind when you move.
• Furniture. Desks, chairs, storage and a meeting table for every seat.
• Internet. A business connection, plus a second line if your work cannot stop when the first one does.
• Power backup. A UPS at the least, and a share of a generator if the building has one.
• Electricity and maintenance. The monthly bill and the building's maintenance charge.
• Housekeeping and pantry. Someone to clean every day, and the tea and coffee.
• Your own time. Someone on the team ends up dealing with the electrician, the internet provider and the landlord.

What a serviced cabin costs

A private cabin in a coworking space rolls most of that list into one monthly figure. At Offilounnge a cabin starts at ₹30,000 a month, and a hot desk is ₹6,000 a month. Internet, power backup, air-conditioning, reception, housekeeping and the pantry are in the price. GST is added to the invoice.

You do not pay for a fit-out, and you do not buy furniture.

When a lease still makes sense

A lease can work out cheaper per seat for a larger team that is sure of its headcount for three years or more, and that has the cash and the patience for a fit-out. If you need a specialised space, such as a lab or a workshop, you will also need your own premises.

When a cabin makes more sense

• You are between 2 and 10 people and may be a different size next year.
• You would rather keep your cash in the business than in a deposit and a fit-out.
• You want to start next week, not after two months of site work.
• Nobody on the team wants to manage an office.

How to compare fairly

Add up the first-year total for both options, not the monthly rent. For the lease, include the fit-out and furniture in year one. For the cabin, ask what the price includes, what the term is and what notice you must give. Then compare the two totals for the number of people you actually have.