Smart Answers

Q: I'd like to rent space to expand my home-based engineering consultancy, but I'm worried about cash flow. --T.M., Randburg, South Africa

A: Try this experiment: Charge yourself rent for six months. Put the money in the bank and don't touch it. You'll see clearly how the added expense affects cash flow.

If you think you can handle it, have your accountant prepare a cash-flow analysis to determine how much new business you'll need to make it worth your while. Then, consider a sublet or share to keep down up-front costs, or think about an office suite, which typically provides secretarial support, furniture, and Web connections.

Finally, be sure you really need an office. With virtual-office software and teleconferencing, clients don't have to know how small your firm really is.

By Karen E. Klein

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