Q: I'd like to get office space for my new business but don't know whether I can afford to pay the rent. Do you think it makes sense to share office space with another company?

A: In today's recessionary economy, it's smart to keep your overhead low until you're sure that you can count on a steady stream of cash coming in the door. That's why sharing space with another company makes sense for startups that want to test the waters before signing a lease in their own name.

You'll not only pay less rent, but you'll also reduce the cost of utilities, office supplies, furniture, internet access and phone charges. You may even opt to split the cost of an administrative assistant or office manager. And because landlords are often leery of renting space to businesses with no operating history, sharing space with a more established business is an easy way to get in the door.

However, while sharing an office can be a cost-effective way to escape the distractions of your home office and allow you to present a more professional image, there are tradeoffs. Sharing an office works best "when business cultures are compatible," says Sanjyot Dunung, CEO of Atma Global Inc., a New York software company, and author of Straight Talk About Starting and Growing Your Own Business. For example, are your officemates loud or quiet? Can you agree on the décor and, if not, can you find some middle ground? Whose name goes on the plaque in the lobby? Most important, what happens if the company you're sharing space with runs out of cash to pay its bills? Advises Dunung: "It's best to have a direct lease with the landlord if you can, as well as separate accounts for the telephone and other services.

"This will help protect you in case you find your business having to cover both companies' obligations just to keep the doors open and the lights on." Be sure to get everything in writing to make sure you don't get stuck holding the bag.