Hiring out office space can be a costly proposition. If you're just setting out in business ask yourself if you really need an office at all.
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If you can allocate an area of your home to work from then all the better, as there are tax benefits associated with doing so. But let's assume that space is at a real premium, can you really run a business effectively from a broom cupboard?
Admittedly we're using a rather exaggerated example of space restriction by referring to a space as small as a broom cupboard, but in truth you may not be able to dedicate much more room than this if your home is already a busy and crowded one.
A really helpful exercise when it comes to making a workplace out of a small space is to think only about necessities. What do you actually need to run your business? PC with internet connection and fax and phone come to mind as essentials and neither take up too much space. So how much space do you really need?
Look at alcoves in your home, if there's one that would be deep enough to take a small table and chair then you have your desk space already. Think upwards when space is a problem. Shelving that reaches to the ceiling is a storage solution. Keep paperwork that you use regularly on the lower shelves, and use the upper shelves for long term storage.
Clever conversions can be made to existing spaces and furnishings. Got a large built in wardrobe in your bedroom that only houses stuff you don't need? Get rid of the junk and make the closet your office.
An office doesn't need to be a vast space that has a panoramic view and a jungle of large potted plants. Your office is where you are. In fact, you needn't be static at all. If you use a laptop and a cell phone your office is as portable as you can get. You could literally run your business from your car or on the train.
Try not to think in terms of restriction when limiting how much space you devote to your business. Unless you need to be at your PC you needn't be stuck in a small space, especially if you are working from home. In good weather, take your laptop outside. Brainstorm around the dining table. Make notes in bed. Use your hands set to make calls from the kitchen.
The most vital part of your business is your brain. That goes with you wherever you are; physical space restrictions should never be a reason to limit the expansive nature of your thought processes. While you're literally running your office from a box, that shouldn't prevent you from thinking outside it. Remember less is more and you'll find innovative ways to reduce your need for space and still run an efficient business.