Finding office space is one of the most important challenges any business faces. Not only will rent likely be your second largest expense (following payroll), but your office will also be your second home and becomes reflective of your company, team, and culture. Your office has a significant impact on hiring, retaining talent, and keeping employees engaged. For growing companies, price, location, size, and timing are all crucial to the search.

The right time

It’s time to consider an office when you are going from a team of five or six and plan on at least doubling within the next year (and have the cash to support it). Most landlords require at least a three-year lease, so you’ll need to have a good handle on your growth projections, accounting for any setbacks or breakthrough that may alter these projections. If you have fewer than five people and are unsure of your growth trajectory, coworking spaces like WeWork, are probably a better fit for you than a full blown office space.

Before we got our term sheet, we (the founders) just worked from spot to spot as office space was not necessary. Once we signed our term sheet, I knew it was time for our first office. We got about 2,000 square feet in Noho as we were hoping to grow to 15 to 20 people in 12 to 18 months. Little did I know, we would outgrow that headcount in less than a year. -- Philip Krim, CEO of Casper

The right size

High-growth startups should anticipate where they’re going to be in 18 months, with enough room for unexpected events. Generally, you should be looking for 100-150 square feet per person, and even though almost every company plans for hockey stick growth, a more realistic growth projection is essential. According to the Startup Genome Project, startups need 2–3 times longer to validate their market than most founders expect. This means most companies grow more slowly than they think.

Let’s suppose your team has 10 people and the plan (as outlined and approved during fundraise) is to be at 30 people in 18 months. You should be looking for 3,000 square foot office space on a three-year lease. Preferably, you want to outgrow your space towards the end of your lease. And as a young startup, you’d rather err on the side of not having enough space versus having too much.

In the early months before you fill the space with your own team members, you can use PivotDesk or Desk Zone to shore up costs. They both enable companies to rent out extra desks to others. If you end up growing quicker than expected and outgrow your space sooner than expected, many companies look for short-term leases and will happily take over your lease.

The right lease terms

How long should your lease be? As a growing business with a lot of moving pieces, signing a multi-year lease can be daunting. Most landlords are looking for a 3-4 year lease, and it can be difficult to find a shorter-term or flexible lease (especially in a hot market), but this need not frighten you.

Consider that the longer the lease term, the more willing the landlord will be to do additional work to the space. You’ll also be locking in a lease rate now, saving yourself from extra costs if lease rates climb. All leases should have sublease clauses allowing you to sublease your space should you outgrow it faster than anticipated. Shorter leases offer flexibility at a cost but come with more limited options because landlords are probably not going to pay to have any work done in a space. A tenant often has less leverage in a short -term lease so it often becomes a deal where you have to take the space "as is."

The right price

For young companies, a tight budget is inevitable, but there are a few things you can do to make sure to get the best price (commonly measured as price per square foot). First, you should always look into numerous properties so that you have some leverage when negotiating a deal. Having a second choice takes some pressure off of negotiating for your first choice. You also want to account for the total cost of renting a space. Total cost is more than just rent, often including maintenance, taxes, and other fees. Don’t forget to budget for utilities, office furniture, and cleaning as well. Finally, location and amenities will affect the price, so it’s important to analyze the costs versus the benefits of these factors.

The right look and feel

It might seem like a minor factor in the life of your business, but a great office space is critical to hiring great talent. According to Crain’s, the most important issue for HR professionals to focus on for 2015 is company culture and engagement, and one of the number one indicators of culture is the company’s space. Employees want a space that is both aesthetically pleasing and conducive to productive working hours. This is one reason that many companies choose to enlist the help of interior designers -- to convey a company’s desired tone and culture.

The look and feel of an office also extends to your office’s neighborhood, but not in the ways you might think. It’s more important to focus on being located in an easily accessible neighborhood, than it is to be located in a cooler neighborhood. According to Crain’s, an employee’s commute was considered the biggest workplace stressor -- tied with too little pay.

For our first NYC office, the right look and feel was important. That is easy to say, but much more difficult when it comes to weighing that against price, location, and other factors. In an ideal world, you get the right look and feel as well as a great price and an ideal location. But just like anything else in life, usually you need to figure out the right mix of each at your company. -- Alia Rafeh, Head of Business Development, Instacart.

Pulling it all together...

A few factors must align when looking for the perfect work space. Get in at the right time and have a plan that accommodates growth so that you neither waste space nor outgrow your office. Make sure to sign a lease that fits your company strategy and timeline so that you make the best use of your time in the space. And last but not least, your office must feel right. Its aesthetics and location must match up with and promote company culture. Be in a space that enables your employees to work hard and feel at home. Let’s make it great!

Jonathan Wasserstrum is CEO and cofounder of TheSquareFoot.