Inspect your house carefully and open your eyes to any redesign possibilities. Your utility room, attic, basement, or even a huge closet can be converted into your workplace. Even your patio or deck could be converted into your home office, if you so wish! Before deciding on the location and layout of your home office, you need to ask yourself several key questions

• How do you like to work?
• Do you need a separate entrance for your home business? 
• What kind of light do you need? 
• Are windows unnecessary? 
• What kind of space does your business demands? 
• Do you require many power sources and electrical outlets?

When setting-up your home office, consider the options that make sense for your particular situation. If you are working from home on a part-time basis or have no intention to invest a lot of money at present, then you can consider a basic set-up. The basic start-up items include a low-priced computer, telephone with answering service, and a fax machine. A full-time entrepreneur, on the other hand, may require a more advanced set-up with more equipment and furniture.

If possible, keep all your work areas in your home and avoid renting some extra space. Remember, the reason you started a home-based business is to keep overhead costs low and save money. If you will manage space in your garage, attic, basement or spare room, it will save you money and be more convenient. There is time to grow into more space once you get your new company up and rolling.

The nature of your business also plays an important consideration in where you should locate your office, how it should be designed and equipped. For example, if you are going to produce a product from your home, you will need areas for storage and production. Food production businesses, such as decorative cake making or homemade cookies, need ample kitchen space. A carpet or upholstery cleaning business, on the other hand, will require storage facilities for the large quantity of chemical cleaners. A laundry service needs extra-large capacity industrial washer/dryer, iron board or a professional press.

Some businesses also need space for production and packing. The basement is a perfect location for a draftsman or blueprinting service; as it would have space to accommodate the drafting table, blueprint photocopier and other small equipment. A doll repair service, on the other hand, can be housed in a small room with sufficient cabinets to keep all the spare parts and precision tools. A home-based dance instruction business needs a large empty room that can be converted into a studio.

One advantage of working from home, though, is that you can work anywhere you want! In fact, a number of home-based workers prefer to work in many places in their homes. One woman running a consulting business in California gravitates to her deck with a majestic view of the ocean when she wants to "expand her mental horizons." If she wants "focused and organizational thinking," she moves to the privacy of her bedroom and curls up with her cat while sipping coffee. When the time comes for writing reports, proposals, accounting and bookkeeping chores, then she goes to her office in the basement.

Wherever you set-up your home office, the most important thing is that you like where you work because you are going to be spending a large chunk of your life there - alone.

Whichever way you configure your home office; remember that your work place is a tool. It may not directly increase your income exponentially, but a good home office environment can greatly improve your productivity. The greater your productivity, the better your bottom line will be.

It is therefore crucial that you set both mental and physical boundaries for your work place to allow you to function optimally. Wherever you decide to work, it must be a place where you can condition your mind to actually work! Hence, the use of the family room - and any areas where family (most especially kids) and visitors converge -- as your office is strongly discouraged. The task of mentally pushing yourself to do your work becomes much harder. The needs of other family members are far too different from yours as a home worker. Imagine trying to close a deal with a business client over the telephone while your kids are engaged in a screaming fight over the television's remote control.

The word "office" implies a place "apart" for business, no matter what it looks like or what it actually is the rest of the time. If you are serious about working from home, one of the first things you need to do is to stake out a real office. Moreover, the further you can position it mentally and emotionally from where you live, the better off you will be.

About the Author:

Isabel M. Isidro is the Managing Editor of PowerHomeBiz.com. Read her PowerHomeBiz Small and Home Business Blog