How do you know when you’ve made it? When you have a fancy corner office and a flashy new car, right?

Not always. If your business has enough growth to provide you with a fantastic office, great—you likely don’t need this guide. But for the rest of us in the real world, your first office space can be a big-time commitment, fraught with a laundry list of caveats and challenges.

How do you know when your business is ready for its first office space? We have a few thoughts:

Why Rent an Office?

First things first: is an office really all it’s cracked up to be? In today’s digital world, fewer and fewer entrepreneurs find an office necessary. Here are a few things to consider when looking for reasons to rent an office for your business:

Some businesses can thrive without a large, dedicated office space to provide them with all of the above. Others need it. It’s

How to Tell When You’re Ready to Rent

If your home-based business has enough cash flow to justify an added expense like an office, then it’s time to ask The Big Question: are you ready to lease? Here are a few ways to tell:

On the other hand, not every company’s situation is defined by its limitations. If you find that your business is growing faster than you anticipated, it’s possible that you’ll need (at the very least) a new office space to make room for that growth. Just make sure that your company has the cash flow to support its ambitions, just as you would with any long-term financial commitment.

Budgeting for an Office

Have a look at the full lease agreement and multiply its monthly payments by twelve to get a better sense of what to expect an office might cost you across a fiscal year. Renting an office will give you the advantage of not worrying about property taxes and maintenance costs, which is good for businesses that require stable expenditure on a regular basis.

Are there any “Rules of thumb” for how much you should spend on an office? According to Priceonomics, which ran a survey of businesses, the average office uses about 233 square feet of space per employee—although you should allocate more space for any attempts at future growth.

The total amount you should spend on your first business office will depend on your type of business—according to some, a retail space should only try to pay about 5-to-10% of its budget on retail space while businesses like law firms might expect to pay as much as 15%.

In-Between Options—For When You’re Just Not Sure

What if you’ve considered all of the above, run through all your options, and simply still…aren’t quite sure?

There’s good news. There are plenty of “in-between options” for you to consider before making the leap to a full-on office lease:

Making the Leap to an Office

Moving from the proverbial business-in-the-garage to a bona fide office can be the single most important milestone of any young business’s life. But it’s not a milestone you need to force ahead of its time. Make sure that you use the appropriate space—both literally and in your budget—before you sign that lease.