Unbeknownst to us, it has been three years since the emergence of shared study rooms in China. In these three years, there are those who have left the scene in disgrace, those who are still holding on, and those who continue to enter the game.
The study rooms that thought they could follow the path of WeWork’s development did not end up on the road to capital. There is no capital to spread money, no stories that blow up to the sky, and only the logic of business as usual remains.
In the past three years, this “six-month payback” business has attracted many people to enter, some full-Time, some part-time, and even many students to start their own businesses. The progress of the study room bosses who have entered the game varies, some bosses have run ahead to unattended all intelligent, some bosses have just received a batch of used tables and chairs to study how to solicit customers.
Although there are only three years, the tone and reputation between the study room brands have been quietly shaped, whether it is a science and technology bookish or rich secondary yuan wind, the study room business can not be separated from the owner’s personal style preferences.
The PropTech Study Group talked to seven study room owners in Beijing, Shanghai, Guangzhou, Shenzhen and Chengdu and found that there are a lot of ways to make this seemingly small and beautiful business work, but it always comes down to operations and people.
Rong Guofu, the owner of the brand study room Feiyue Island, summed it up: the industry is making money for those who know how to operate full-time; those who don’t know how to operate full-time are losing money; those who do it part-time are not making money. But soon, those who don’t know how to operate full-time will start to make money.
The following is from the experience of the seven North, Guangzhou and Shenzhen study room bosses to share, but also a new study room to open a store to avoid the pit guide:.
01
The profit is very thin to make money is not easy, but I still want to acquire a study room
Brand: a study room
Location: Beijing
Founder: Ji Yang (90 years)
A Study Room opened on October 22, 2020, in Shuangjing, so we don’t have an advantage in terms of location, plus there are a lot of study rooms around, and we opened in the off-season, which led to our pricing being very low.
Cheap prices always attract some odd customers, cheap, wool-gathering, not only a lot of things, but also pretentious, sometimes really quite a lot of effort, feel that the pre-decoration are not so exhausted. But the good thing is that 99% of the students are very good, they just come to learn quietly, after learning to leave, nothing else.
On March 15, we are going to raise the price because the price is low at the beginning, if we don’t raise the price again, we may not be able to recover the cost of rent every month. So far, a study room has only been open for three months, but we are doing quite well. in December, the study room has already broken even, and the two months have been slightly profitable.
I expect that April and May will bring a small climax. On the one hand, the weather is getting warmer and people are willing to go out. On the other hand, if you have a study plan for this year, it’s time to put it on the agenda, and there will be a series of exams coming up, all of which will prompt students to get into the study room environment quickly. As a result, I think there will almost be some profitability starting in March.
Also, I’m currently considering acquiring another study room, but that’s a half and half idea. Why would you want to acquire a study room.
I think the study room being acquired is definitely well thought out in terms of location, and he has already hit the customers in the neighborhood, which saves a lot of time costs.
But on the other hand, since it is willing to be acquired, it means that there are problems in his operation, and it is difficult to break the deadlock and achieve profitability. Therefore, to acquire a study room is a big risk.
I have recently talked about a study room, but the costs are quite high, and the monthly rent is 40,000.
I think the study room is a high cost, but thin profit industry, so it is not easy to recover costs and profit, which is a test of the study room owners’ ability to control costs.
Some study rooms have a good location, and the rent and labor costs are about 40,000 a month, so it’s hard to recover the costs if it’s off-season.
The reason we haven’t lost any money since we opened is that we have very strict cost control, and there are some study rooms where it’s hard to make a profit if you can’t control the rent and costs.
One of the major problems with running a study room is that the business model is very homogeneous, relying only on the sale of seats. If you put some temporary sales in the study room, such as snacks, tea and beverages, or coffee, or books, the number of people who consume is basically very small. 10 customers inside may only two or three will consume.
This is the bottleneck of the entire study room industry, and how to break this bottleneck and achieve multiple revenues is now the biggest problem.
If I had someone around me now to open a study room I would advise him not to open it, because the income I have received from the study room since I opened it is not as high as my salary income. I’m not sure if it’s a good idea to go to a class and have an income, but I’m not sure if it’s a good idea to go to the trouble of having a study room and make myself tired every day.
02
Good decoration for the eyes, good chair to save lives
Brand: Neverland Weaving Dream Island
Location: Shenzhen
Founder: Gao Du (90 years)
Our first store was renovated before the Spring Festival in 2020, then it ran into the Epidemic, and officially started business in April of that year.
At present, we have five stores in business, one is being renovated, the average rent of study rooms 18,000, in terms of hardware, we use a unit price of one or two thousand engineering chairs, sitting and face value, suitable for all kinds of body.
Many study rooms are very expensive in terms of decoration, but very frugal in terms of chairs. But in fact, the good decoration of the eye, good chair to save lives ah.
Now, we do 24-hour business site without staff model, three small housekeepers to manage five stores, the total number of employees 6 people, has been working at full capacity.
The most worrying problem right now is to receive customers’ inquiries on WeChat, and it is very energy consuming to give timely and quality responses to various questions.
The good thing is that we are doing well, with a roughly 80% to 90% attendance rate, and we are profitable, and two of our stores are fully staffed on weekdays.
There is no secret to our study rooms, they are generally profitable in the second or third month after opening, and it is all the same, just good facilities, good service and affordable prices.
In the course of operation, there are many guests, friends, and students who want to open franchises in their cities in the form of franchises. They should feel that this kind of store to meet the advantages of less things and more money close to Home, and even do not have to go to guard the store, at home, you can lie to earn, not knowing that there may also lie to lose.
For how to cooperate in the field to open a store, we are still under careful consideration.
Now, Shenzhen is very competitive, the price is the same as Wuhan, Hangzhou, only 60% of Beijing, Shanghai. In terms of quantity, there is also a direct reflection of the fact that there are several places in Shenzhen where there are two or three study rooms in the same office building and four or five in the same metro station.
One building had four at the most, but the fourth one closed after six months.
We have a store is one upstairs, the former a metro station around three, the latter a metro station in the same building there are three, one of the price is a monthly card 200 yuan, has lasted a few months. The price of a monthly card is 200 yuan, and it has been going on for several months. The price is so high that it is not necessarily available in the county.
The biggest problem with the study room industry is that the threshold is not high, it seems to be renting an office and setting up tables and chairs to open. Many people are trying, but suffering from meager profits, a little inattentive to lose, such as house rent expensive point.
At present, the industry is in the expansion period, more new entrants, so some stores closed and not be concerned. We usually pay attention to the seat of each peer, the cost of our store experience conservative estimates that about 60% of the stores in Shenzhen is not yet profitable.
03
Many people want to join, we are politely refused
Brand: Crowd Learning Space
Location: Shanghai
Founder: Liu Kangcan (post 85)
We landed this study room project in the second half of 2018.
At that time, in terms of supply and demand, the number of public libraries in China was only more than 3,000 in 2018, and an average of more than 400,000 people could use such a public learning resource, which, coupled with the lack of management in most libraries and short business hours, led to an increasing demand for self-study resources, regardless of the yearly increase in the number of exam study parties, or the white-collar groups who took the exam for promotion and job-hopping.
I myself have always had the habit of reading and recharging, and I am one of the precise target groups of study rooms, so over time, it became natural to open a study room.
Currently, we have four directly operated stores, three franchised stores, and several new stores in the pipeline.
In 2020, due to the epidemic, we suspended expansion and only franchised stores opened, not directly operated stores. Currently, our study rooms all operate under the same business model, and in the future, we will try to diversify the operation of our space.
Our investment is different for each store, but the single store in Shanghai is basically 50W-100W, and the tables and chairs and lights are all customized, and will be fine-tuned according to the customers’ opinions during their use.
In terms of site selection, we mainly consider the convenience of transportation and the number of people nearby, mainly in the CBD area, the cost of this location is relatively high, the average monthly comprehensive cost between 50000-80000.
So far, the number of registrants at our stores has exceeded 20,000, all stores have achieved positive cash flow, and all early stores have become profitable.
To achieve rapid profitability in the study room, I think it is more important to pre-warm up.
For us, except for the first store, all the other locations have had a direct wave of customers from the old stores in terms of diversion. We also have an element of luck, such as taking advantage of the market dividend period, but I guess the new stores opened across provinces or cities this year may not be able to do so, after all, cross-town will not be able to do a good diversion, all over the past two years have also sprung up a number of self-study rooms.
Rationally speaking, positive cash flow for the month is not a constant.
We have experienced the epidemic, and in February and March 2020, we were barely open, so there must have been a lot of impact, but because students could not come to school and International Students could not go abroad for classes, this brought more volume to the study rooms during the summer, and they were basically full at the end of June, so the overall impact did not seem particularly large throughout the year.
But the epidemic is also very stressful for some study rooms. Because their income will be low from December 2019 onwards, the epidemic in February and March is likely to cut off the cash flow of some study rooms, and those with a big impact may have to close down.
In fact, the feedback from the whole market demand is still higher than expected after more than two years of operation. For example, the number of study rooms in Shanghai in 2020 is more than three times that of 2019, but the number of our new customers has increased rather than decreased, which shows that the supply side of the market is still not growing as fast as the demand side.
In the process of operation, we have tried to cooperate with other industries. Because our study room is positioned for mid- to high-end customers, we have made some attempts in the fitness, beauty and training industries, and the basic logic is the import of customer traffic.
However, because the overall scale and number of members is still relatively small, the conversion effect is still relatively limited. However, this is not our focus at this stage, just an attempt to verify the feasibility.
As for joining, there are many people who want to join since 2018, we are politely refused, but these two years to see these people enter did not do well and exit the industry, I think it may be that they are not the right way, so I want to use some of their experience to do sharing, so that more people can participate in the industry, together to promote the construction and development of the industry. These few joined self-study rooms are all held by their city partners.
At the moment, there are no problems in the operation of the franchised study rooms, but of course, maybe there are not many of them and they have not been found for a long time, so maybe there will be in the future.
We will collect a small portion of the fees from the joined study rooms, they eat meat I drink a mouthful of Soup on it, after all, this industry is not a very high profit industry.
Now, the study room has completed the 0-1 stage of customer-led Education in the market. The authenticity of the market demand has been verified, and the business model of some brands has been verified to be feasible. For those who are ready to enter the study room industry, I think it’s good.
Perhaps some people are considering whether there is a lot of competition among peers and such issues, but which industry is not like this? Of course, not thinking about how to create differentiation in the low-threshold industry or think clearly first. After all, the low-threshold industry is easy to enter, but also easy to die.
04
Netflix store “card traffic”, not the real customers
Brand: Feiyue Island Study Room
Location: Beijing
Founder: Rong Fuguo (after 85)
Because of the epidemic in 2020, we closed the two stores in Zhongguancun and Sun Palace, and threw away all the tables, chairs and benches. Overall, it was a loss.
The previous study room in Sun Palace was a Netflix store, but then we found that the business was not really suitable for a Netflix store. Because the “card traffic” attracted by the online stores is not our demand, and not our real customers.
It’s a pity for us to close these two stores because of the capital investment and the time and energy investment.
At present, we only operate this study room in Wangjing, which opened on December 1, 2020, with an investment of 600,000 yuan.
The study room has an area of 230 square meters, 50 seats, and is generally full on weekends, with an attendance rate of 60-70% on weekdays. According to the data from the public review, Feiyue Island Study Room has become the industry’s top-selling study room in January and February 2021, and it is the only profitable study room.
The current study room is a big product upgrade from the previous two study rooms, with two completely different market users, customized tables, chairs and benches, well-designed tables and aisle widths, and some intelligent equipment.
For example, users can make reservations online through our small program, without which they cannot enter the study room. At the same time, students can only power up the corresponding seats if they have made a reservation, and cannot power up without a reservation. In addition, the applet automatically reminds users of the start time and end time.
We are now able to achieve unmanned management, and the system is intelligent and unmanned is a sure way to reduce costs and increase efficiency in the study room, so this is still something to explore before it’s too late.
Our current idea is to start with a single store that is consistently profitable. The products made this time have been completely standardized, and if we can achieve a single store that is consistently profitable as soon as possible, we will be able to replicate it soon.
However, although Feiyue Island Study Room has already achieved profitability, the whole operation cycle is still very short, so it doesn’t mean anything, at least we need to see more than half a year. Therefore we will run the current program for a while and will not have any improvement plans for the time being.
There is a lot of market space in the study room industry, and there is still a chance to make a big business, but the pain point right now is how to make the ping efficiency higher and increase revenue.
We are fine because we are doing it full time, but for most part-time store owners, this is a more serious problem.
The reason for this is that the industry is still partial to the operation, no operation how to spar with the operation, the general part-time boss, will hire part-time employees, or even do unmanned service.
We do it full time, we must be hiring full time employees, so the results are definitely not the same.
There is a characteristic in this industry now: those who know how to operate full-time are making money; those who don’t know how to operate full-time are losing money; those who do it part-time are not making money. However, soon the full-time do not know how to operate will begin to make money.
Now more and more self-study rooms are opened, the product is getting better and better, the industry is becoming more and more formal, no longer speculation to earn a quick buck industry.
If someone does self-study room, it is recommended to do long-term planning, good market research and product positioning, short-term cost budget, return on investment calculations before entering.
05
After breaking up with the first partner, understand that the control should be in your own hands
Brand: A4 Study Room
Location: Beijing
Founder: Mr. Yang (89 years old)
I’m an IT techie myself, but after opening a party hall in college and a bed and breakfast, I naturally became interested in study rooms.
On January 6, 2020, my first study room was launched, and the partners were found by me in my circle of friends, with a total of 6 people.
On January 4, 2021, my second study room went online, called A4 Study Room, with four partners, but after the first study room, I also learned my lesson and took control in my own hands from the beginning.
The A4 study room is located in Jianwai SOHO West of China World Trade Center, with 166 square feet and 51 seats, and costs about 21,000 yuan per month.
Compared to the first study room, A4 Study Room has made some changes.
For example, the previous study room was decorated in a shared office environment, without differentiating the study room scene, and the environment was monotonous and stereotypical. At the same time, it expands incremental demand, providing the best quality bestsellers and magazines to meet the immersive reading needs of some people.
For example, the study room was not lighted in the past, resulting in a dim and dull study room and a poor learning environment. The overall effect is that the occupancy rate in the better-lit areas of the study rooms is much higher than the occupancy rate in the shaded areas.
At present, I think the biggest difficulty of the study room operation is the single scene, which leads to a single clientele and an obvious off-peak season. Therefore, we are learning from the composite business Netflix bookstores and are ready to integrate more book elements and regularly purchase best-seller list books. I think the immersive learning environment and the immersive reading environment are a natural fit.
Right now, we hold a reading season every two weeks, where users can sign up with a $1 experience card and specify books that we purchase. This both fills our books and acquires incremental customers.
User satisfaction is our main concern. Now there are too many study rooms and users have a wide range of choices, and they are all very similar in nature.
Users may be dissatisfied and lose, so we care a lot about user feedback, collecting feedback one-on-one and preparing tweetbooks for users to scribble. We also strive to respond to users’ suggestions within a week to avoid users feeling that we don’t care.
Now there are more and more people opening self-study rooms, but I would say be cautious, now the general environment of the industry is not good. Some time ago, the head of the industry several closed down, perhaps for a variety of reasons, but I think the essence of the business situation is not very good. If it is very good, in fact, can not go to close this step.
06
If you only want to collect seat rent as a side business, it is recommended to enter carefully
Brand: VLoft concept self-study & office
Location: Chengdu
Founder: Bill (98 years old)
V-loft Study Room started its business in November 2020. The space is self-owned because it happens to be vacant, and individuals also have a demand for self-study, plus they want to do a social practice and opened it.
Now, there are many study spaces in the market, but most of them are low-end, crowded and depressing environment. So I wanted to create a self-study office space more suitable for high-end social people, as well as study abroad groups, on the scale of an office. This also led to the study room being more expensive and most students not wanting to come.
I didn’t make any special visits before making the study room. My study room is located in Chengdu’s top financial city. We have a large number of mobile students and about 30 regular members.
In terms of study room decoration, our interior incorporates minimalist elements from designers and contains a global smart home system overlay for easy remote management. The lobby has a total of 24 tables, which are huge in size, but are not cubicles, so they are not as private as regular study rooms. The overall interior configuration is actually more suitable for co-working, as it includes one large and one small private room, as well as a multi-functional room for meetings and meals.
V-loft did not have a cubicle at the beginning, but considering that some people do not like to study with strangers and do not like to be disturbed, so later partitions were added in both directions, but in fact there are still many students who like this oversized table experience.
Currently, V-loft’s monthly revenue is around 20,000 yuan, and it is losing money when rent costs are taken into account.
I think the study room itself is not a good business model, so there is really no way to make a profit for the absolute purpose, and my goal now is to earn enough rent to consider maintaining long-term operations.
The best time to do business on our side seems to be during the epidemic, the last six months many study rooms closed, students can’t get out of school, and after the resumption of work, people do not come out during the week.
2020 The second half of the study room that is a miserable, the industry average income of one or two hundred a day, many peers have collapsed, the daily attendance of single digits.
Now slightly better than before, but also recently just started, the specific how will have to be seen next month. We are in the top 10% of sales in all of Chengdu, and this is backed up by data, so if we don’t have many people, it’s harder for the rest of the world to suffer.
For my study room, one of the two biggest problems, besides the flawed business model of the study room itself, is that the service is not as good as it could be.
Since we are mainly a high-end, high-priced company, we must make our scholars feel different from other ordinary study rooms through various value-added services, so that they get their money’s worth. But at present, not only do we not provide enough value-added services, even the infrastructure is still in the process of being added, which makes some customers feel that the room is empty and they cannot find some items they want to use.
Second, marketing is not done to the extreme. Practitioners lack marketing awareness, do not know the initiative to spread information by way of the network, kick a foot to move a little. The overall circle of friends, public numbers, social groups are not yet dished out well enough. The specific solution still needs to be pushed forward from me personally, spending more time on more systematic task layout, promotion, and implementation.
I am ready to create a unique community activity within the study room circle, through the examination of the operation of the activity, the organization of some small capital, small team type of social activities to attract more customers. Now I have already organized two sessions, one per week. Of course, I also hope that the events themselves will be profitable later on.
In the process of running a study room, there is no greater difficulty than the lack of talent. Most of the people working in study rooms want to find an easy job and study at the same time, so their service, marketing awareness, and overall ability are generally poor. For study rooms, it is too expensive to find capable operators, and they are not necessarily retained in the long term.
After the study room opened, I found that the traffic was far from what I thought it would be and the operation was far from easy, but this may also be related to the timing. Work resumed after the epidemic and students returned to school under closed management.
For those who want to open a study room at this point in time, I suggest not choosing to enter the business so easily. This is a cyclical, low-threshold, competitive, energy-intensive industry, and for the majority of the population is still a low-consumption group, the pursuit of price over quality. The long-term result has caused the study rooms to play low price war with each other, making each owner damaged, such as a variety of 1 yuan purchase activities.
In the post-epidemic era, the flow of people has greatly decreased, and the supply of study rooms has exceeded the demand. The average daily income of the study room industry in Chengdu is only about 200 yuan, which is a loss for most businesses.
If you want to do a really good job with your study room, you need to put in a lot of effort to do a good job with your service and marketing. If you just want to open a study room as a side business to collect the rent of seats, it is recommended to consider carefully.
07
If I were given another chance, I would still open a study room
Brand: Title Study Room
Location: Guangzhou
Founder: Yang Qiming (99 years old)
I opened the study room at the beginning of February this year, because I was a year-round candidate in the first two years, and I felt that the environment I needed to study was still relatively important.
My study room is located near the Tianhe passenger station in the Tianhe district of Guangzhou, with a monthly rent of 2W. It has just started operating for less than a month, and there are not many members in reserve.
Now for me, publicity is a big problem, because the study room is in a new business park, basically 0 passers-by 0 foot traffic. At the beginning, the property said that there would be an additional entrance on our side, but now it is not yet open, I also expressed my helplessness. Therefore, now we can only rely on online publicity, and students can only learn about us on the Meituan platform.
The main business is to do auto repair, the money to open the store rent is out of their own pocket, profit for me in a short time is difficult.
The competition in this industry is quite fierce, there are two or three study rooms within 3 kilometers of me, and there is a chain of them, and the surrounding study rooms will also fight for prices, and those study rooms with high brand awareness have an impact on our small study rooms.
However, if I were given another chance, I would still open a study room.
I heard that there are many study rooms in other provinces, their rental stores are cheap, it seems that the monthly card is only three to four hundred, and the environment is very general, but then there are many members to study, I feel that in comparison, our side of this pay to spend the concept of learning is not so strong.
I saw a lot of study rooms on the platform, some businesses directly use the abandoned office area renamed study rooms, the result is that many students have a very bad experience. It feels like the threshold for opening a study room is quite low.
Personally, I think that since we really decided to open a study room, we should really give the students a learning environment, not just move a few tables there and be done with it.
(Note: Some of the study room owners in this article are pseudonyms)
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