From the May 2005 issue of Startups

You've found a spare room in your house. It may be the basement or an extra bedroom. Now, you're ready to transform it into the home base for your new business. The first step to building a home office is finding a space that is separate from your daily life. Add a good desk and a comfortable chair, and you have the foundation to add the next step: technology. First, we'll give a general overview of the components and then get down to a specific setup. Since you probably already have a cell phone, we're going to skip that.

Getting Started

Your computer will be the basis of your entire technology setup. Your choices boil down to two main options: desktop or laptop. Or if your budget and needs allow, you might consider investing in both. Let's start with the desktop. You'll be digging through a mire of megabytes, hard-drive sizes, processor speeds and extras, but it's worth the effort-and you won't have to spend a fortune.

"From a computer standpoint, you don't need the latest and greatest. It can be one or two steps behind," says Dave Ehlke, president and co-founder of Boston-area computer consulting firm Geek Housecalls.

A few basic guidelines: Look for a Pentium 4 processor, at least 512MB memory, a 60GB hard drive and a re-writable CD/DVD combo drive. Ehlke points to memory as an important factor. "Memory is one way you can crank up the performance on your computer," Ehlke says. "You shouldn't shortchange any of your computers on memory." Next, you need a monitor. The days of the old-fashioned CRT are fading as flat-panel LCDs have hit new levels of affordability and quality. They're easy on the eyes, easy on space and fit almost any budget.

Today's laptops are right on the heels of desktops when it comes to power and performance. There's an array of options, from desktop replacements to ultraportables. A desktop replacement notebook may be a bit weighty, but it will have at least a 17-inch LCD and comparable punch to a regular desktop. Ultraportables are ideal for frequent travelers but cost several hundred dollars more than their heavier brethren. Decide how often you will carry your laptop around to see if the extra cash outlay is worth it. One key feature that is sometimes overlooked is the warranty. "Laptops are more prone to problems. I would definitely get at least a three-year warranty," says Ehlke. Find out what the manufacturer offers, and consider upping it at the time of purchase.

You'll also need some basic software. Ehlke recommends going with Windows XP. Windows XP Professional is preferable to the Home edition if you plan to network computers. The Microsoft Office suite will cover the bases for word processing, spreadsheets, e-mail and scheduling. Security software is an absolute must, including anti-virus, anti-spyware and a firewall. McAfee, Norton and ZoneAlarm are some well-known providers.

A printer is another cornerstone of your home office. Once you have a computer to create documents and other business output, you need a way to make hard copies. Lower prices, improved speeds and higher quality are factors in your favor. You're no longer stuck with just an inkjet printer or multifunction. All-in-ones are still popular choices for home offices that want to save space and maximize the functionality bang for the buck. While a solid inkjet printer/copier/scanner/fax can come in at about a few hundred bucks, it may be worth checking into a laser solution for the lower long-term operating costs. "If you do much color, you should probably get a color laser because inkjet costs can just eat you up," says Ehlke. A color laser printer can be picked up for as little as $500.

Of course, all this technology won't do you much good without a reliable connection to the outside world. That's where broadband comes in. If you're going to check e-mail or spend any amount of time on the web, cable and DSL are the top choices for home offices. They are fairly comparable in speed, price and basic functionality. Expect to pay at least $40 per month. Which you choose may simply be a matter of availability. Your distance from the central office can affect DSL speeds, while the number of people logging on can affect cable speeds. Ask around your neighborhood to see what other people are using and how satisfied they are with the service.

Once you have your broadband connection set up, you may want to share it with multiple computers. Chances are, you have at least one office computer and one personal use or family computer. A Wi-Fi network is the ticket for sharing your connection and files if necessary. 802.11g equipment offers a lot of bandwidth and comes in at a very affordable price. Just don't forget to protect yourself. "If you do a wireless connection, make sure you encrypt your router so people can't get in," Ehlke says. It's not just war drivers and hackers you need to worry about. Curious neighbors piggybacking on your network can be a hassle and a security hazard.

Most home-office startups aren't rolling in dough, so getting a good deal on your technology is almost as important as getting the technology itself. Invest a little time and shopping smarts, and you'll be up and running at a good price in no time. Geek Housecalls co-founder Andy Trask cautions against overbuying. "Don't be afraid, at least initially, to ask family and friends who know about computers and networking for their opinions and help," he says. Your peers can be invaluable sources of information and recommendations.

Online shopping can net you some competitive pricing, but don't neglect local retailers. Check the Sunday circulars for discounts and rebates. Just be sure to actually send in all the rebate forms. Another popular place to find technology deals is eBay, since many sellers now offer new equipment through auctions. Check if the hardware is new or refurbished, if all documentation is included and if it has a full or partial warranty. Also, some online retailers like Dell and IBM have internet outlets for closeouts and refurbished gear. Often, the warranty will be truncated, but the savings may be worth it.

Sample Setup

Now, let's put this all together with a sample setup-on a budget of $2,000. We'll go the desktop route: We found a Hewlett-Packard Compaq Presario SR1010z with Windows XP Professional, 512MB memory, a whopping 200GB hard drive and a rewritable DVD drive. We upgraded from Microsoft Works to the basic Office edition, added a 17-inch LCD monitor and a 15-month subscription to Norton Internet Security suite, and ended up just under $1,400 (after a $100 rebate) for the whole package--with free shipping. Just one stop at www.hpshopping.com netted us the majority of our hardware and software.

Next comes a printer. If you already have a fax and scanner or don't really need those capabilities, a personal laser printer is a smart way to go. The Xerox Phaser 3150, for example, has 32MB memory, churns out up to 22 ppm and costs just over $300. For about $150, you can snag a multifunction inkjet like the Epson Stylus CX6600 with scanning, printing, faxing and copying. If you're adventurous, you could get them both and cover all your bases. That lands us at a total of $1,850 with a bit left over to spend on Wi-Fi equipment or other extras. Check out the boxes for equipment ideas that are not requirements but would be nice to have.

What you end up with may be close to what we gathered above, or you may choose to go the laptop route or dispense with a multifunction altogether. Still, it shows that you can stock your new home office with quality technology without burning a hole in your checkbook. Find that room, plant that desk, and get going!

Tablet To Go

A laptop may be a requirement for you if you travel a lot for business. A laptop with tablet PC capabilities is probably a step above what is absolutely necessary, but it can be a pleasant step to take. The $1,599 (street) Toshiba Satellite R15-S822 has a convertible style that lets you use it either as a tablet to write on directly or as a regular notebook. A 60GB hard drive, 512MB memory and built-in 802.11g make it a well-stocked piece of hardware.

Maximum Monitor

What could be better than a 17-inch LCD monitor? How about a 19-inch LCD monitor? The $550 (street) Samsung SyncMaster 915n features a blazing-fast, 8-millisecond response time in a sleek black design package. The price may feel comparatively hefty next to a budget-friendly 17-inch, but entrepreneurs who work with multi-media will crave the high-end features. Also, at that size, it's easy to keep a couple of applications open side by side to boost your productivity.