Transitioning from corporate office to home office is not as tough as you may think. While each homebased business has different needs, every home office must provide the same basic functionality:

  • A clean, well-lighted place for the owner to run the business free from noise and distractions
  • A place to sit down and work (desk, chair, lamp)
  • A place to store information about your customers (computer, filing cabinet, electronic organizer or database)
  • A way to communicate with your customers quickly and efficiently (phone, fax machine/software, Internet connection)

Since most homebased businesses are service businesses, not retailers, manufacturers or wholesalers, it's rarely necessary for a home office to be large enough to store inventory or component parts. And since most homebased business owners travel to their clients' offices for meetings, you probably won't need a conference room, a white board or a projector.

How much should you expect to pay to equip a home office? The good news is that the price of computers, fax machines and other office automation equipment has come down dramatically over the past 10 years. Prices for phone service vary from place to place, but new all-inclusive packages from providers like AT&T, MCI and Verizon provide unlimited local, regional and long-distance calls for less than $60 a month. Likewise, high-speed Internet access (broadband or DSL) is available for $50 to $100 per month. Here's a sample budget for setting up a home office from scratch:

  • Computer: For roughly $1,000, you can get an IBM-compatible computer with a Pentium 4 processor, 256MB of memory, a 60GB hard drive, a 17-inch monitor, a CD-ROM drive, a 56K modem and an Ethernet connection from Dell, Compaq, Gateway and other leading suppliers. To comparison shop for the best prices, check out CNet's Shopper.com or ZDNet Shopper.
  • Multifunction machine: For $250 to $500, you can buy a machine that acts as a fax machine, copier and printer. Most machines offer an automatic document feeder, a scanner and the ability to print out digital photos in color. Machines like these typically run at print speeds of up to 12 pages per minute (ppm) in black and white and 10 ppm in color.
  • Two-line cordless phone: Today's top-of-the-line cordless phones start at less than $200, offering home offices the same full-duplex clarity as a corporate boardroom with a microphone optimized for hands-free, one-to-one phone conversations. For example, the Polycom SoundPoint Pro Desktop Conference Phone lets you hold three-way audioconferences right from your desk, allowing callers to speak when they want without the clipped sentences and one-way conversations typical of most speakerphones.
  • Office furniture: Depending on how fancy you want to get, you can spend anywhere from a few hundred to a few thousand dollars to equip yourself with a desk, chair and file cabinet. Try Staples and IKEA for affordably priced furniture that won't fall apart. And don't be afraid to splurge on a comfortable chair! You're going to be spending a lot of time there, and the extra money you spend now will save you hours of back pain later.

Rosalind Resnick is the founder and CEO of Axxess Business Centers Inc., a storefront consulting firm for start-ups and small businesses. She is a former business and computer journalist who built her Internet marketing company, NetCreations Inc., from a two-person homebased start-up to a public company that generated $58 million in annual sales.


The opinions expressed in this column are those of the author, not of Entrepreneur.com. All answers are intended to be general in nature, without regard to specific geographical areas or circumstances, and should only be relied upon after consulting an appropriate expert, such as an attorney or accountant.