According to a research paper by Edmund Tie & Company, it is now estimated that by end of this year 2018, the total amount of co-working or flexible work spaces will hit around 1.4m sqft in Singapore, with a big part of this concentrated in the business district or CBD.  And as at May this year, there are approximately 110 serviced office cum co-working operators jostling for bigger shares in the Singapore office market. This comprises of both big brandname operators familiar to most from Justco (local), The Great Room (local), WeWork (USA), Campfire (Hongkong) to a whole plethora of local mid-sized operators making their presence felt here and in Asia.  What ensues is inadvertently a price war which can only be good news for those looking to rent.

In this article we will discuss the differences between renting a traditional office in Singapore versus that of taking up a private room in a service office, or that of a coworking space.  We will also discuss what we believe is the emergence of another hybrid office space category in what we call “co-location” office as Singapore landlords of traditional offices struggle to fill spaces in the face of this tsunami shift to flexible spaces over the next decade.

Table of Contents

1. Serviced Office Vs Traditional Office Rental In Singapore
1.1 What is traditional office rental?
1.2 What is the concept of serviced office?
1.3 Comparison between serviced office and traditional office
1.4 Cost differentials between serviced office and traditional office
2. Different Types Of Serviced Office Offerings In Singapore
2.1 Building type
2.2 Brand-name vs small operators
2.3 Comparison between serviced office and coworking space
3. Serviced Office Vs Co-location Office
3.1 What is co-location office?
3.2 Comparison between serviced office and co-location office
3.3 Cost differentials between serviced office and co-location office
4. Summary


1.1 What is traditional office rental?

Before this millennial workforce came about, most tenants be it SME or big corporates would lease a fixed square footage area of office spaces on typical a 3-year tenure for commercial leases.  This often requires careful planning and budgeting with 3-year forecast of all resources needed for business expansion in a specific country or location which is often difficult to do.  Once the space is commited, tenants would need to take over the space and spend on fitting out or renovation before moving in quickly and they need to see out the duration of the lease no matter what happens to the business environment.

1.2 What is the concept of serviced office?


Serviced office, on the other hand, requires much lower commitment both in terms of the duration of the lease as well as the costs required to fit out and even to maintain the business operations.  As the name implies, the office premise would be “serviced” by an experienced flexible space operator well adept to provide all kinds of business services needed from high-speed wifi, cleaning & washing, pantry supplies, printing solutions, office manager with a team of reception staff providing concierge services like phone answering, etc.

In fact, serviced office has been around for the longest time with very established players like Regus and ServCorp who used to command premium pricing with 2-pax private room going at above S$2,000 as recent as 2014.  It was only in the last two years when serviced office operators mushroomed in Singapore and the industry grew into a multi-billion dollar business globally as big corporates catch on to the trend of embedding coworking in their culture.

It is not difficult to understand why this is an attractive option not just for new startups and small businesses who may not afford the higher rentals in the CBD, but multi-national companies as well.  With fluid and ever-changing business environment as a result of technological disruptions and political upheavels in recent years, the flexibility of much shorter lease (often as short as 1 to 3 months) and not commiting on renovations and running costs is highly valued.  Enterprises could put in teams or whole departments and scale up or right-size at will, with no concern on lack of seats or over-commiting on a lease when business plans change.

1.3 Comparison between serviced and traditional office

Serviced OfficeTraditional Office
Length of leaseTotally flexible which can start from as little as 1 to 3 months; tenants could also “swop” over to another bigger or smaller room, or add on rooms as business progressesCommercial lease usually at minimum of 2 to 3 years with handover of a fixed committed space
Fitting out & re-instatement costs at endMinimal as all renovations are done with offie tables, chairs, phone lines and wifi/lan cable point all provided.  There is usually just a basic reinstatement fee at end of the lease which is in the range of $300-500.Can range from $20,000 (with partition for managers’ rooms) for 500 sqft small offices to over $100,000 for large spaces. It is an often-overlooked cost item which can easily add 30-50% to rentals when amortized over duration of the lease, especially for shorter lease of 2 years.
Ambience and décorMost operators provide a swanky reception area for guests and big spacious “breakout” and coworking areas which boasts of modern contemporary “living room” décor.  Some may even come with seaview!Private office rooms usually come with window (for the bigger ones) and glass fittings to allow for natural light.Most traditional offices are fitted out with simple carpet flooring and individual workstations on colored-panel system furnitures unlike the “open concept” in most serviced offices.Private rooms are usually whole-glass partitions with old wooden furnitures and wall cabinets.
Monthly running costsMost basic running costs are covered like internet access, electricity power and pantry supplies. However, most serviced office operators would charge for usage costs from phone lines, printing, to meeting room.All services need to be applied and contracted for specific periods from business broadband, printing, pantry supplies, etc.
Office ManagementAll tenants big and small can leave all office management matters to dedicated team of “centre managers”Depending on the size of tenants’ operations, they will need to have person dedicated or oversee all office management issues from suppliers’ contract, fixing repairs of lights or IT infrastructure, VHR (video camera), M&E issues, etc
Networking and collaborationServiced office tenants could easily mingle in common areas and collaborate when opportunities arise. This process is precipitated by the many networking activities and regular talks organized by the operators who would invite tenants or outside experts to give talks on business topics of interest.Most of the time tenants would keep all interactions within the confines of the company, ie. colleagues and coworkers.  Depending on the size and scale of operations, there would be team-building activities but not on a weekly or monthly basis unlike in service offices where there are resources dedicated to such events.

1.4 Cost differentials between serviced office & traditional office

Based on small unit 400 sqft for 5 paxTraditional OfficeServiced Office
Fitting Out Costs
SCDF approval for fire water sprinkler
M&E works (mechanical & electrical)
IT infrastructure (Cat 6 lan cabling)
Paritition (rockwool sound-proofing)
Carpentry work for cabinets/storage
Carpet flooring
Office furnitures (5 workstations)
PABX phone system (setup)
VHR system (video camera recorder)
Security access system
Install own invertor airconTotal fitting-out cost
Included in rent
Included in rent
Included in rent
Included in rent
Included in rent
Included in rent
Included in rent
Included in rent
Included in rent
Included in rent
Included in rentZero
Re-instatement Costs
At end of 2-year lease (estimated)

Monthly Running Costs
Monthly rental to landlord (with GST)
Utilities (electricity & water)
Business broadband 400mbps
Phone usage charges
Pantry supplies
Cleaning services
Repairs & maintenance including aircon service
Furniture & equipment depreciation
(optional) Hire 1 office receptionistTotal monthly running costs
(we will exclude depreciation costs which is paid for under fit-out & hiring of receptionist)
Included in rent
Included in rent
Included in rent
Included in rent
Included in rent
Included in rent
Included in rent$4,100
True Total Monthly Cost
(amortized over 2-year period)
($40,000/24mths + $4200)
($1,000/24mths + $4100)

Although serviced office rental for 5 pax at $4,000 (~$3,800+GST) may seem to be higher than the rent of $3,200 paid (~$3,000+GST) to the landlord of a traditional office space of 400 sqft, when amortization costs for renovation and setup costs are factored in, it actually works out to be $1,725 ($5,866 less $4,141) less per month which saves the tenant a whopping $41,400 over the course of a 24-month lease!

And let us not forget management’s time involved to brief contractor, apply for permits, oversee renovation, requisite furnitures & fit-out items, contract for office supplies and services, etc.


2.1 Building type

As most of the serviced office operators are located in CBD area, and there are generally 3 types of office buildings within the CBD.  Take note there is no standard definition for commercial office buildings in Singapore other than the official URA’s definition of Category 1 & 2 office building with 1 being defined as those located in core business areas in Downtown Core and Orchard Planning Area which are relatively modern or recently refurbished, command relatively high rentals and have large floor plate size and gross floor area; and Catesgory 2 being defined as everything else other than 1.  Still the industry uses an average floor plate of around 10,000 sqft as the benchmark.


Premium Grade
Premium-grade office buildings are those located in Singapore’s CBD and with the following attributes:
– Usually newly-erected buildings, not just refurbished
– A grand and high-ceiling lobby reception area with state-of-the-art security access system
– Large floor plates of at least 10,000 sqft with no columns
– High total gross floor area with high occupancy
– Commands the top rental psf rate in Singapore and usually houses global MNCs and banks

Examples of serviced office operators located in premium-grade office buildings include:
One Marina – Justco
Marina Bay Financial Centre (MBFC) – Servcorp, Regus

Grade A
Grade A office buildings form the bulk of high-end office buildings in CBD as many building owners underwent extensive rebuilding or refurbishments in the last few years in Singapore.  These buildings are:
– Newly-erected or refurbished
– State-of-the-art security access system
– Large floor plates of at least 10,000 sqft

Almost all existing new or refurbished office buildings in the CBD fall into this category:
Suntec Tower – WeWork
Capital Tower – Collective Works

Grade B
Grade B office buildings are those older office buildings yet to undergo major extensive refurbishments however those floors occupied by serviced office operators would have been overhauled completely.  To draw an analogy, it is almost like one is walking into a “show room” unit within a block of old HDB flat:
– Older office buildings yet to undergo any or minimal refurbishments usually in the lift lobby area
– May or may not have security access control via entry passes
– Smaller floor plate sizes

Examples of serviced office operators located in grade B office buildings include:
71 Shenton Way – WeWork
139 Cecil St – Campfire

Shopping Malls
Besides office buildings, the trend of coworking operators entering retail malls have started overseas in markets like US and in Singapore local JustGroup started the ball rolling with its new premise this year 2018 opening in Marina Square mall.  The huge floor plate allows it to add on to its offerings by providing product showcase areas for its many new startups.  We expect this trend to further take root in Singapore especially in the upper floors of malls where there is getting harder for mall owners to fill the spaces.

2.2 Brand-name operators vs small operators

We have covered quite a number of top 10 brand names in serviced office and coworking operators by now.  Still, that is just 10-20% out of a total of some estimated 110 operators.  There are many other smaller serviced office and coworking operators and some with only single-location like us here at StartWise.

Smaller operators are unable to match the depth and width of the membership base and networking activities of the big boys.  Nor can we compete on the extensive interior design budget and big spacious floor plates offered by these Tier 1 and some global operators.

However, as in all trades of life, small has its advantages and besides pricing power, we are able to fulfil certain unmet niche in the market place and we will elaborate more in a later section on a new trend we believe will arise over the next few years.  Before we do that, we need to take a closer look at the difference between what is a serviced office and what is a coworking space.

2.3 Comparison between serviced office & coworking space

So far, we have used the term “serviced office” loosely in this article when we really mean “coworking space” at times.  It is important to note that the two terms refer to two different office products but is used interchangedly somewhat by the industry as almost all serviced office operators would also provide coworking solutions and vice versa.

As explained earlier, serviced office as a product has been around for ages and our guess is that is still going to be pretty much the preferred choice for all tenants when budget is not an issue.  Renting a serviced office means taking up a short lease of one or a few private rooms (usually with window) that could sit a few coworkers in each room. There is a sense of ownership of the space with private restricted access, soundproof glass partitions where conversations are conducted exclusively.  Customers or business partners who come down for quick short meetings can be hosted in the company’s exclusive area.

On the other hand, coworking spaces which is also known as hot-desking to some, are more suited for freelancers or those in creative and media industries where collaboration is valued more.  That is not to say that those in such trades will not take up private office rooms.  It depends.  For those who just started out and wish to keep their fixed costs down, coworking memberships where one is free to use any available open seats during business hours for a small fee per month or per day may work best in our opinion.  The only draw back is it is perceived as a less “corporate” or business setting for work and may not be suited for certain industries. Typically, tenants would request to have a fixed dedicated desk zones so as to enclose the whole team within the same area.

Media has propagated the term “coworking space operators” not only because it ties in with the whole concept of the sharing economy and the rising army of freelancing millennials which is all the buzz now; but it gives a sexy appeal to the whole idea of an office.  Still from evidence we see on the ground, serviced office continues to form the main bulk of businesses for most of these operators especially in the enterprise segment.  Perhaps a better word to describe both office space solution providers in the same breadth would be – flexible space operators, which would encapsulate both serviced office and coworking space rental.



3.1 What is co-location office?

With serviced office operators taking over commercial buildings in Singapore and with this growth rate projected to rise annually in double-digits 20-30%, traditional office landlords be it building owners or strata-office owners would find it more and more difficult to fill their spaces as millennials and even enterprise tenants take to such flexible spaces.  The demand for traditional offices has shrunk and will continue to be so.

Fortunately, we do see an unmet niche for traditional office owners who could lease out their premises as co-location office rental through management contracts with co-location office operators.  So, just what exactly is co-location office?

There are many smaller tenants or startups who may like the idea of renting a serviced office with prime business address in CBD but is sensitive to the steep pricing charged by major operators which range from $1,000 to $1,600 for a 2-pax private room.  They might like the idea of a hybrid concept between a small traditional office without all the “frills” of coworking bells and whistles, yet still enjoy the flexibility of a serviced office short-term lease rental with all basic business services provided.  Think of it like a budget airline without all the frills of a full-serviced carrier, but still get you from point to point safely and efficiently.

As the name implies, co-locating offices refers to the setup where the entire small office space is essentially occupied by just a few tenants (like 5 to 8) in non-conflicting businesses who decide to co-locate their operations and share out common resources.  There will be an operator who takes care of the basic services like mails, calls, internet access, small pantry supplies, cleaning etc.  Yes, there may not be that swanky reception area with free coffee and tea but if it helps to bring down overall rental costs by some 25-30% per month, that makes perfect sense for tenants who rather spend the money on marketing to get more new businesses.

For example, in the cost comparison given earlier in section 1.4, co-locating offices into 2 private rooms for 5 persons will cost only $3,000 all-in inclusive of gst at StartWise, which is at 27% lower cost from $4,100 monthly running costs.   And if your company needs only a 2-pax room with window, this all-inclusive cost is at just $1,360 per month and takes care of all your daily business needs from printing, meeting to phone usage.

3.2 Comparison between serviced office & co-location office

Co-location OfficeServiced Office
Length of leaseTotally flexible, but subject to availability of rooms and desks due to the smaller scale
Totally flexible
Fitting out & re-instatement costs at endNo fit-out costs. Only re-instatement fee as low as $100 per paxNo fit-out costs.  Only re-instatement fee usually $300-$500 per room
Branding & ambienceSimple reception area with no spacious feel but can come with modern contemporary look.With few tenants co-sharing the common space, corporate branding is much stronger with logo signages at entrance for guests. Tenants could also portay themselves as related or affiliate companies aligning for the same vision or purpose.Big swanky reception with modern contemporary look and feel.  Spacious coworking space.Due to the size of operations, it will be difficult not to be seen as one of the many tenants in a coworking setup. Corporate logo displays are chargeable by month and get overpowered by the distinctive brand of the service office itself.
Monthly running costs Depends. Operators could charge by usage of meeting rooms, printing, etc. but most would include all services in the rent so as to differentiate from service office.Smaller operators typically has no GST, or choose to absorb it as part of the all-inclusive rent.Most do charge by usage with the exception of a few players.  Charges will be levied for meeting room bookings (hourly rate), printing, displaying of logo, snacks and premium coffee like nespresso.  Some would even decouple business address as a service from basic rent and levy a fee for that.Rental price listed normally excludes GST. 
Office ManagementUsually small operators can only provide a single receptionist to take care of all day-to-day office admin matters.
All tenants big and small can leave all office management matters to dedicated team of “centre managers”.
Networking and collaborationNo regular hosting of events and talks.Regular talks and events from business seminars, workshops, after office hour parties to even yoga and dancing classes.

3.3 Cost differentials between serviced office and co-location office

The main cost differentials between serviced office and co-location office, other than the lower rent, is in the pricing for services by use.  As most co-location office operators are small setups with less than 10 tenants, it does not make economic sense to track and charge by use.  As highlighted, it makes more strategic sense to include all usage costs into the rent itself, be it phone calls to meeting room bookings.  It will difficult to breakdown and provide itemized charges to individual tenants, albeit there are solutions or platforms in the market that allows for it.

The other obvious cost advantage for co-location office over serviced office comes in the form of lower rent charged.  This is possible as co-location office operators keep all running costs down to the bare minimal by doing away with all the frills like free coffee and tea. They also do not need to breakeven on high fixed rental costs as there is no necessity to provide that spacious look and feel which means every sqft in the lettable space will be optimized. It will not take too long for them to fill the limited no. of rooms and seats.


In this article we have introduced you to the various types of flexible work spaces from serviced office, coworking or hotdesking, to co-location offices. The last of which is what we anticipate as a new hybrid category of office space that provides flexible solutions yet giving a stronger business identity and corporate look and feel. It would also target at the more budget-conscious segment of tenants out there with rents set at average of 25-30% lower than those of serviced offices.

We have also provided realistic cost breakdowns to estimate the potential savings a small business tenant with less than five staff would reap if it opts for flexible office space (serviced office or co-location office) over that of a traditional office rental.  And this figure can be quite staggering over a period of 2-year lease.

We hope the information provided here will be of great relevance to your search process.  As this article is essentially an opinion-piece from an existing co-location office operator, we ask you to validate the figures and statements presented though every effort has been taken by us to ensure its accuracy and objectivity.  Please also do read our disclaimer clauses at the end of the article.

Speak to us today to find out more and to arrange for an obligation-free viewing of premises.  We look forward to welcoming you to the StartWise family.

Though every effort has been made to ensure the accuracy of our writing and analysis, we do not warrant that our research findings will be 100% true and unbiased as we are also in the business of operating a co-location office in Singapore ourselves.  We stand corrected and welcome any such feedback to  Through our blog, we aim to summarize useful information on office rental market in Singapore and to bring you coverage on interesting developments in the industry.  We also express our opinions in our writing which must not be taken as facts without validation or further checks.  Our sources of information will be limied to those from the authorities, and whatever that is published in the public domain as well as insights gathered from our day-to-day marketing and operations in our business.  You should not base any decision on any representations given in any of our blog articles without fully verifying the said information with the relevant parties concerned and we cannot be made liable for any losses suffered as a result.

It is now estimated that the number of serviced office cum coworking space operators in Singapore has mushroomed to more than 100 with the total floor area amounting to over 1m sqft and growing fast.

As competition rises and the going gets tough, we have noticed a drop in prices by some operators with many dangling a low base price but that comes with many additional “add-on” charges even for the most basic of all services – the use of the business address!  In the face of such cut-throat competition, more experienced and bigger operators have turned to being a differentiated niche player, in order to stand out and fill up all the spaces – a clever move.

In the past few years we have seen operators focused on various niche market themes from fitness industry (Core Collective), childcare (Trehaus), hospitality (The Great Room) to the ever-trending young tech startups (Hackerspace, Hubquarters, Carrot Patch).  Operators offer the usual hotdesks and coworking seats with monthly rate and rates for daily access pass.  What is unique is often the décor and fittings of the office space that plays to the profile of target market from fitness training facilities like gym & treatment rooms, children play room, to arcade games machines and console.

Young startups and small businesses are indeed spoilt for choice today with the diversity of offerings from various serviced office operators in Singpore, and at hugely affordable prices compared to five years ago when serviced office market in Singapore was dominatd by a few major players the likes of Regus and ServCorp with the typical corporate style office suites.

One of the key benefits advocated by many of these serviced office operaters in Singapore is the element of networking with like-minded entreprenuers in the same or related industries, and other founders in similar life stages for example new parents with young kids. Depending on the type of industry one is in, this networking opportunity may indeed bring about new businesses for some, though by and large many companies will still need to do their due diligence when sourcing for products and services. 

O.M.O or “one-man-operation” business owners renting hotdesk or coworking seats will clearly benefit from the camaraderie of working in such a vibrant environment with many other “colleagues”.

At StartWise, being a small setup with just two private suites and four dedicated desks, we may not be able to offer that extensive reach and network of the big boys.  However, we more than make up for it with our support services and features thrown in free of charge from the use of meeting room, printing, unlimited free calls from a dedicated phone line with free call transfer to mobile, display of corporate logo branding at the office reception, and so on.  Over time we do hope to expand our base of clients through our unique training programmes targeted at startups and new businesses which will help to expand our network.

Speak to us today to find out more and to arrange for an obligation-free viewing of premises.  We look forward to welcoming you to the StartWise family.

Though every effort has been made to ensure the accuracy of our writing and analysis, we do not warrant that our research findings will be 100% true and unbiased as we are also in the business of operating a co-location office in Singapore ourselves.  We stand corrected and welcome any such feedback to  Through our blog, we aim to summarize useful information on office rental market in Singapore and to bring you coverage on interesting developments in the industry.  We also express our opinions in our writing which must not be taken as facts without validation or further checks.  Our sources of information will be limied to those from the authorities, and whatever that is published in the public domain as well as insights gathered from our day-to-day marketing and operations in our business.  You should not base any decision on any representations given in any of our blog articles without fully verifying the said information with the relevant parties concerned and we cannot be made liable for any losses suffered as a result.

Thinking of starting a business to build passive income but are not quite sure what to do and how to go about it?  This article may help give you some framework or train of thoughts on this topic, which is becoming more important in an age of tecnnological disruptions where many middle-aged professionals and executives might be displaced from the workforce in the next 10 years, as we move into more and morea gig economy.

In Singapore, you have often heard of businesses complaining of rising costs of doing business here which can come in many forms – shortage of workers. difficulties in meeting quota to hire more foreign workers, rising levies, utilities hike, rents going up, etc.  This problem is especially acute in retail with the perfect storm of rising e-commerce trends and escalating rents thanks in no small way to REITs which has been blamed by many as a culprit why many mom-and-pop stores are fast disappearing both in Hong Kong and Singapore and indeed everywhere else.  The trend is global in nature.

The point here is this – unless you are big brand company with deep pockets, it is going to be very costly to have a brick-and-mortar presence in any major cities especially in an area with high footfall.  So much for the “I want to start a café business”, an almost universal theme people almost romanticizes.  In fact, more practical business ideas could come in the online world where the internet has opened up many more possibilities in the new millennium.

In our Top 10 list of the most cited business ideas in Singapore by middle-aged executives, many are web-related:

  1. Retail shop selling products/services or Café/F&B
  2. Professional services like accountants, clinics, etc.
  3. App creation or some technical product/solution like an IT/web design vendor
  4. Blogger
  5. Events management
  6. Consultancy (in business, marketing, analytics, etc)
  7. Network marketing (or MLM) as a business
  8. Training and coaching business
  9. Online shop selling products: e-commerce store, baking cakes/tarts, etc
  10. Online shop selling services: curtain, courses, training, google adsense, etc

(Note: A business is defined as what generates a cashflow through a set of activities and which the business owner need not trade his time for money, hence the following common jobs are not considered businesses: grab driver, stock/forex trading, property agent, fitness trainer, freelancer, etc)

We believe that anyone can start a business today with the power of internet.  Of course, as you can see from the list above, there are many popular traditional businesses which may not require much internet knowledge like retailing, consultancy, etc.  Still, almost every business needs a website.  And business owners who knows a thing or two about digital marketing tend to have greater success in getting clients.

With that, let us give you our basic framework for how to start a business which comprises of 6 steps:

1. Business Idea Generation

At StartWise, one key factor why we love internet-related businesses so much is that it allows anyone to monetize his or her area of interest and knowledge from cupcakes to big data.

If you have a specialised skill or knowledge like coding, data analytics, accounting or marketing success, your business idea may be quite obvious than most, or if you have a specific product or passion like art classes or a secret recipe.  But let’s face it.  Most people who like to start a business may not have a unique skill sets or product, neither do they have the capital or knowledge how to start.  Some will take real action and convince some friends to start something new, others may shop around for an existing business for sale.  But most would just talk about it without taking real action.

We think it is better to start a business in a niche that you are most passionate about, naturally.  Where you like to read up or stay abreast of the latest news and developments in that specific niche of knowledge.  Where you can call youself an expert!  There is no boundary here and everyone’s interest is different.  It can be as cliché as baking or gaming to idiosynchatic pursuits like figurines or bungee-jumping.

2. Demand Analysis

Most people would have more than one area of interest in life.  Next step is to do a demand analysis and the amazing thing about the internet is that it can give you instant answers how many people are there in Singapore (or for that matter any specified location in the world) searching for the solutions in that area of your interest.  You can do that via Google keyword planner.

Bettter yet go through some of the seach results page and see who are your likely competitors.  Are their anyone already offering what you intend to offer.  Fret not even if they do, it can be a good thing as it shows healthy demand.  How much will someone pay for your product or service, and how do you intend to differentiate yourself from competiton.  Many a times, it is better to enter a market where there is real demand (people already paying) than unchartered territory for a totally new product or offering.

3. Do you want to be a service provider or a service intermediary?

Now that you have ascertained there is real demand for your product or service.  The next important question to ask is – do you want to be service provider or a service intermediary?  Most people will just jump right into providing the service, for example starting baking cakes, coding for games, or organizing bungee-jumping trips around the world.

A service provider runs the actual business, which comes with the full works of hiring staff, running the operations, marketing for leads, and inventory management if you have goods. Not to mention paying for overheads from rent, utilities to transport and shipping costs.  If the business idea is spot on with red-hot demand, the business owner laughs all the way to the bank especially when there is huge profit margin to be made.  To be successful as a service provider, one often needs to decide if he wants to compete on margin (sell fewer items but with high gross margin) with differentiation or compete on volume (sell many items with low margin per sale) with cost competitiveness.

A service intermediary, on the other hand, does not run or provide the service.  In simple analogy, think of it as a broker or a referral platform. In the internet age, the website that best organizes the information buyers are searching for, and continuously provide new information in that product category, and positions itself successfully as the domain expert or “go to person” in that niche, will command the highest traffic.  What you do next is to establish a network of service providers who would want to pay you a small referral fee which can range from 10% to as much as 50% depending on your niche.  And which business owner would not want to pay you upon confirmation of an order?  If there is, just refer to his closest competitor.

Even though this referral fee could be just 10%, but because there is little inventory, manpower or overheads involved, it can be construed as a high product margin business! And guess what? It can also be a high-volume business.  Yes, you can have the cake and eat it.

4. What is the differentiator? How can you succeed when others fail?

If you choose to become a service intermediary, you will still face immense competition.  First you have competition at the primary level where the service providers themselves would be marketing aggressively both online and offline.  Bewarned, some can come with huge marketing war chest. Next you also have to compete at the secondary level with other service intermediaries in your niche.  And you can bet there will be many if this is a very profitable niche.

So as in all businesses be it a service provider or service intermediary, you will need to differentiate yourself which means you need to answer the question “Why should I choose you over the rest?”

5. Financial plan – how soon can you breakeven and start to generate a profit?

This step needs no elaboration as it is covered in almost all entrepreneurship readings on how to start a business.  You will need to know your investment budget, your breakeven period, break up annual target into meaningful and achievable milestones, track the sales funnel and conversion rate, etc.

When it comes to financial planning for starting a business, the old adage of “over-budget and under-spend” would still be useful.  If you think you will breakeven in 6 months, double that.  And if you think you can tide over 12 months without drawing a salary, double that too.

The good news here is – if you are starting out on becoming an intermediary first, there may be no need for you to quit your full-time work.  You just have to work extra hard after office hours.  It is always a more prudent path to start off first as an intermediary, and when business becomes so good and overwhelming, take that plunge then to assume the service provider role where you would have gone up the learning curve in the industry and be in a better position to compete.

6. How to increase your chances of success?

The is the last step in our framework for starting a business, nonetheless an important one.  There are of course many things you can do to increase your chances of success in startups, for example rope in a partner or hire someone who comes from the industry to give you an edge.  To this end, there will be many advice from people close to you.

We will just add what we know from our own experience starting two successful businesses in Singapore, and we believe these same qualities will benefit those looking to take some serious action:

(a) Learn to build your own website

If you need to pay someone $5,000 to build a website for you and pay another few thousands a year on retainer fee just to maintain and update the website, you may not go that far.  Chances are you will be too slow to respond to changing needs and demands of businesses today.

It also means most likely you have not heard of WordPress or CMS (content management system) which is what even mid-sized companies use to build their websites today, running on open source.  That would also most likely be what your web design firm will be using – pre-built WordPress themes and templates, to build that professionally-looking website with all the bells and whistles you asked for.  You can actually D-I-Y and pay yourself.

(b) Learn the vital skills of digital marketing and lead generation online

Cashflow is lifeblood of a business, hence traffic and conversion is everything in business!  Your ability to genenerate an endless flow of quality leads online, and your ability to convert them will be crucial.  The same goes for offline retail store where it is about creating awareness and getting people to take action to visit your stores and make those purchases!

If you want to succeed as a service intermediary online, you need to become a savvy digital marketer deploying a combination of both paid media and organic search (SEO) strategies for optimal results.

(c) Acquire copywriting skills or hire those who are good at it

Even if you can get a tonne of traffic to throng your online store, if your website copy (plus all elements of user experience) does not convert them, your customers will just go somewhere else. 

The same goes for a retail store or service organization.  If you have sales force is unable to persuade prospects to commit, there will be no business.

A business owner with strong copywriting skills will have an advantage, otherwise paying for good copywriting that converts is absolutely non-negotiable.  Of course, the pre-text in all this is that you must first have a good product, or some great content to share as an intermediary.

We hope you find our framework on “how to start a business” useful and beneficial.

At StartWise, besides offering office spaces that give businesses what they really need, we extend our mission of helping new businesses thrive and succeed by offering a basic 1-day Wordpress course on website creation.  The course is created specially for novice in the internet business who has neither any programming knowledge nor any slightest idea how does WordPress work.

For a very affordable price equivalent to attending a 1-day talk/workshop where you may learn something new for a day or two only to throw away everything after a while, participants of our Wordpress training will walk away with a fully-functional website at the end of the class, ready for them to be launched as a part-time service intermediary business online!

Speak to us today if you are keen to find out more details and we look forward to welcome you to the StartWise family.

Coworking space needs no introduction in Singapore.  From big international players like WeWork from California to home-grown big boys like Justco to smaller setups sprouting up all over Singapore, it is taking over office rentals by storm.  But is this growth sustainable and the trend here to stay?

In this article, we will summarize the key advantages and negatives of both as there are businesses that still prefer the merits of a traditional office:

Coworking Space
  • Flexibility in terms of length of lease and incremental spaces as a business expands
  • No need to worry about office renovation and ongoing repairs and maintenance
  • No need to worry about general office management & services like meeting room bookings, wifi connection, utilities, drinking water, etc.
  • Opportunities to network across companies and industries
  • Working in a hip, open and fun environment that fosters creativity and where work becomes play
  • Lack of privacy for business operations with communal setup
  • Lack of privacy also relates to the constant distractions with need to network and small talk.
  • Lack of exclusivity and branding factor when clients or business partners come down for meetings
  • Paying a perceived higher psf compared to traditional office rental
Traditional Office
  • Design of office space entirely for one company’s operational needs
  • Strong branding and exclusive factor where clients/business partners perceive the business to be sustainable in paying rental for whole office
  • Full privacy with no risk of information leaks to external parties in the same office
  • Paying a lower psf rent based purely on area of lease not including the frills
  • Need to commit to minimum of 2 years or even 3 years for commercial lease and to make the renovation costs “worth the while”
  • Renovation costs often translate to a higher amortization figure per month, especially for smaller space where there is no “economies of scale” or savings in renovation projects
  • Need to pay for and manage all ongoing office services from wifi, utilities, telephony system, drinking water to cleaning etc. and very often a need to commit to contractual periods for certain services

We see more office landlords having a harder time filling up empty spaces compared to 5 years ago.  Indeed, the flexibility of coworking spaces attact even multi-nationals (MNCs) these days when setting up sales offices in a new market, as no longer do they need to commit themselves into a lease yet they retain the ability to attract talent in global markets with a big swanky offices.  Therefore it comes as no surprise that commercial building owners including REITS and listed developers have started their own coworking concepts to fill up floors which might otherwise be vacant for quite a while as the entire work space goes through some kind of structural shift in the coming years.

However, we do believe that there is still a market for traditional office rentals even as the coworking trends take root in Singapore over the next few years.  For all the reasons we have highlighted in our analysis earlier (table above), we know there are still many mid-sized companies who believe in having a stronger brand prescence in a fully-owned office for their business.  They see it as a necessary investment especially when they grow to a certain size in business operations or attain certain staff strength where economies of scale justify investing in office overheads.

With the exception of MNCs who tend to swoop in on coworking spaces or serviced office in a big way like taking up half of the available private rooms in any new centre, but often only for a transient period before they finalize their operational requirements or awaiting renovation for their new final offices, tenants in coworking centre tend to be smaller setups with less than 10 staff.  This is where it makes a good fit for a tenant company to save on office resources and renovation costs via a coworking space operator.

At StartWise, we offer what we believe is a great “middle-of-the-road” proposition for such smaller businesses where one can have the cake and also eat it.

What do we mean?  Well, StartWise offers what most coworking operators would offer – private office suites (with window) as well as dedicated work desks.  Yet, because we are not the size of big coworking operators with too many rooms and tables to fill, tenants get the exclusivity factor in operations as well as the option to put up their corporate logo at the office reception, thus giving that proprietary branding needed.  Essentially we are like a group of related companies or sister companies who choose to co-locate their offices for cost efficiency.

Contact us for a no-obligations viewing if you like to explore taking up spaces with us and join the StartWise family.