As many of you know, Locus Workspace was put up for sale in March, partly due to the COVID-19 crisis, but largely due to my own decision to move on from the coworking industry.
As many of you also know, there was a buyer who made an offer that I accepted and showed enough interest to pay a non-refundable deposit.
Unfortunately after several months of mostly waiting for legal contracts, and for reasons I do not fully understand, the buyer pulled out and Locus is once again on the market.
Along with just announcing the unfortunate news, the purpose of this blog post is to give a brief overview of what’s next for Locus and Locus members and about what is for sale for those who might be interested in buying.
UPDATE FOR MEMBERS AND POTENTIAL MEMBERS: How will this affect your membership
For people who have been members of Locus since its early days, you’re likely aware that this may not affect your membership in a noticeable way at all, except for the unavoidable psychological uncertainty that comes from not being sure what will happen. That said, there is unavoidable uncertainty associated with not being sure who if anyone will buy Locus. If Locus doesn’t find a promising buyer by the end of September, we will begin a 3-month process of closing the space, so that Locus would be completely closed for business by the Christmas holiday. I do not expect that to happen, but it is a real possibility. If that did happen, all prepayments for long-term memberships would be pro-rated to the date Locus would no longer be usable and the remaining amounts returned to the members’ accounts. Ideally there will be at least 2.5 months from the time the closing is announced until the space would no longer be open for business. At minimum, there would be one month’s notice.
Information for Potential Buyers
Some Reasons to Buy
- It’s a great price (I’m leaving the business for personal reasons and believe it’s a great deal for the right kind of buyer). Don’t hesitate to ask about price and financials if you might be interested. But please only serious inquiries.
- It’s the longest-running coworking space in the Czech Republic with a stellar reputation and a broad online presence.
- I will transfer all domain names and social media pages and groups, including URLs. Some of the URLs have presumable value as the coworking concept has grown exponentially since I purchased them (coworkstation.com and coworkingplace.com among others, along with Locus’s own functional domain names). For social media groups, Locus manages several Prague Meetup Groups with more than 1,000 members.
- The sale includes extensive physical assets needed for running a coworking space: desks, chairs, lamps, data projectors, filing cabinets, etc.
- I will make every effort to transfer all knowledge and resources for running the space, including extensive protocols for managing the space (though after the sale I will expect reasonable remuneration for my time).
- There are currently two full-time interns with Erasmus fellowships and a part-time paid experienced community manager who are expected to remain at Locus during the transfer of ownership and into the first few months, assuming the sale process can proceed over a reasonable time period.
- While Locus was hard-hit by COVID-19, membership and net profits have increased monthly since the initial lock-down in March, despite the fact that summer months are traditionally the slowest of the year. I expect the positive trend to continue strongly in September and October, as there tends to be a large increase in membership after the summer holiday season.
- If you want to enter or expand in the coworking industry, Locus is a great way to get started.
- While I would expect the negative impact of COVID to continue for several months, I also expect improved long-term prospects for coworking in general as companies seek to promote remote work and flexible office space as a direct consequence of COVID.
- Locus is profitable and unless things change can pay a reasonable living wage for a working owner/manager.
- There is meaningful potential for increased net profits for an experienced event manager, sales person, or business manager without extensive change from the current model.
Some Reasons NOT to Buy
- COVID-19 remains impactful and unpredictable, and it’s difficult to know how the coworking business will be affected in the short-term and in the long-term future. If you are looking for an investment without any risk, this is not the investment for you.
- Unless you plan to be an owner manager for at least the first year, or to use this space as a springboard for learning or expansion without expectation of profit, the potential profit margin is not investment-grade, in my opinion: only people who want to be involved in running a community-oriented coworking space should see this as an opportunity.
Some Reasons to Buy or Not to Buy Depending on You
- I started a coworking business because I wanted to do something that had community value and not primarily for a social business (meaning one that adds value to the human condition and not just for profitability) and one of the main reasons I am selling rather than just closing down is because I do not want to see Locus die when it continues to have a lot of value for members. While I also believe it’s a good investment for the right buyer, I am not at all interested in selling it to the wrong buyer.
- With that in mind, if you are looking to immediately pivot to a different kind of business or even a different model of coworking so that current members will likely want to look elsewhere, you are not the right candidate.
- You’ll also be buying from a person who started a business with social good in mind and who continues to be committed to those values, which can be confirmed with inquiry from long-time members of the space, which means you can count on a kind of honesty and direct communication in the sales process that often would not be provided.
- Locus is an English language space with members from more than 20 countries, including about 35% Czech members. If you’re looking for a Czech-language-only space, you would not get the value from buying Locus that it mainly has to offer. If you’re looking for an international community with a strong Czech presence as well, Locus could be ideal.
If you are seriously interested in entering the community-oriented coworking industry and would like more information about financials or anything else, or just to have a conversation about the opportunity, do not hesitate to contact me:
Will Bennis, Ph.D.
Founder & CEO, Locus Workspace