How A Shift In Focus Towards SMB's Led To Triple Digit Revenue Growth [$225K/Month]
This is a follow up story for The Office Pass (TOP). If you're interested in reading how they got started, published almost 3 years ago, check it out here.
Hello again! Remind us who you are and what business you started.
Hi there, I am Aditya Verma, Founder & CEO of The Office Pass (TOP) a Neighbourhood Coworking & Managed office company focussed on providing flexible office spaces to Small & Mid-sized Businesses (SMBs) in India. TOP offices are warm, friendly, ready to use & affordable.
TOP currently runs 14 Coworking & Managed offices in the New Delhi area. Over 200 SMBs are using TOP offices. The business is growing at a healthy rate of over 100% YoY. TOP will achieve a turnover of $ USD 2.7 Mil in the current financial year and target to reach $ USD 13 Mil over the next 24 months.
At TOP, I drive the company's vision, strategy, and growth. I enjoy creating workspaces that have energy, soul, and momentum. Workspaces that make “working” an enjoyable experience.
Tell us about what you’ve been up to. Has the business been growing?
We intend to open 8 new Coworking offices and add 200 new customers to our portfolio in the upcoming year
The Office Pass (TOP) Coworking business underwent a complete transformation post the CCOVID-19pandemic. At the peak of the pandemic when people were afraid of coming out of their homes, the business lost 73% of its customers and over 90% of its revenue. Employers also shifted to Work From Home (WFH) and it was all doom and gloom across.
But there was a sharp recovery around Oct-Dec 2021 period essentially aided by a highly successful vaccination drive run by the Indian government. Not only did the business recover but it started to attract lots of new customers as companies wanted to explore the flexible workspace model to reduce their office operational expenses. In a way, TOP business is living its second life.
We made two major strategic changes post pandemic. The business moved away from freelancers and micro enterprises and focused on Small and Mid sized organizations that are more stable. The business also increased its focus towards Managed Offices for long terms and a stable revenue stream. These two changes enabled us to achieve three big milestones in the post Covid world
- The current FY has seen a triple digit revenue growth (after degrowth during the Covid year)
- The business has turned EBITDA positive and is able to stand on its own feet
- Our CLTV reached 25x of our CAC, which is the best in the industry
We also increased our focus on PR. The brand received excellent coverage in category A business publications and magazines. A few stories are captured below.
What have been your biggest challenges in the last year?
Post pandemic revival in the Indian Coworking business has taken everyone by surprise. Many Coworking operators including The Office Pass (TOP) had not anticipated this pace of recovery. The biggest challenge over the past 12 months has been on the supply side i.e, getting the new properties at the price point that can meet the rising demand from the customers.
Over the past 12 months, we have opened 4 new Coworking offices although there was a scope to do at least 50% more. Our current focus is to streamline the supply aspect of the business. We hope to open 8 new offices in the coming financial year.
The Office Pass (TOP) has 200+ existing customers that were acquired over the past 5 years. We intend to double this count over the next 12 months i.e., 5x growth in new customer acquisition. Plans are in place to use FaceBook and Google more aggressively than we have in the past.
Once we achieve these targets, the business would be firmly on a high growth trajectory.
What have been your biggest lessons learned in the last year?
No two years are the same, especially for a startup. Business can surprise you positively and negatively. Let me elaborate on this with a live example.
Last year was full of positive surprises and a few missed opportunities for The Office Pass (TOP). We did not expect the Coworking industry to rebound so fast in the post-pandemic world. It took us by surprise. We started getting 35% more customer leads for the same amount of monthly marketing spend. Initially, it was great as the lead inflow conversion helped us improve our office occupancy from under 30% to over 80%.
The problem started when we were unable to add new capacity to match the growing lead volume. If we had anticipated the market revival and had planned our supply strategy properly we would have grown much faster during the year. We became conservative after a prolonged Covid period which led to the business going to some of our competitors. It took us 6 months to get our act together and we hope to reap the benefits in the coming year.
What’s in the plans for the upcoming year, and the next 5 years?
We intend to open 8 new Coworking offices and add 200 new customers to our portfolio in the upcoming year. We target to grow The Office Pass (TOP) business by over 100%.
Over the next 3-5 years, we will like to take this business outside of the New Delhi area and make it a pan India operation. We will target over 2000 companies as our customers. The biggest achievement over the next 3-5 years will be to list the business and make it a public company.
What’s the best thing you read in the last year?
Reading is not ry thing. I watch business news on CNBC and follow a few select business leaders on LinkedIn to keep myself updated on the world of business & finance.
Advice for other entrepreneurs who might be struggling to grow their business?
Every crisis brings its own set of learning and the COVID pandemic was no different. Here are my 2 key learning that young entrepreneurs can benefit from
Learning #1: There is no substitute for a scalable business model:
Short term momentum around an idea or concept has limited legs. Ultimately the business has to make economic sense to sustain and scale. It is difficult to scale a business whose cost of servicing the customer is more than the customer revenue. As an entrepreneur, you need to re-look at such business models or face an uncertain future.
Learning #2: Plan for the rainy day:
All entrepreneurs should plan a contingency fund. This can come in handy when the going gets tough or the business is faced with uncertain times (like a pandemic). Depending on the type of industry, this fund should help the business sustain for 6-12 months of uncertainty. Without this planning, you are putting your business at high risk.
Try and take care of your employees and vendors when the chips are down. This gesture always gets reciprocated. You will see employees staying longer and working more efficiently than otherwise. Vendors will also help in speeding goodwill in the market.
Are you looking to hire for certain positions right now?
Currently, we are looking to hire a General Manager - Managed Office Operations. This is a senior position and we are looking for a person with proven experience in Corporate Leasing. The position will report directly to one of the Co-founders.
The ideal candidate should have an MBA in Marketing with around 8-10 years of experience in a related field. The applicant should e-mail their CV to hello@theofficepass.com.
Where can we go to learn more?
If you have any questions or comments, drop a comment below!
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