1. Make sure that you really need to build.A brand new workspace may be a wonderful notion, but be sure that the cost and inconvenience warrant it. For instance, building makes sense if there's simply no other space in your home that's suitable to convert. By the same token, what is available may be too close to high traffic areas. On the other hand, think twice if you simply don't like the paint or carpeting in an otherwise useable room. For marketing consultant Bruce Kasanoff, lack of space in his Westport, Ct., home made building an obvious option: "The house we bought was simply too small to have an office." (Note: Kasanoff was smitten with the small house and property around it; and he also had the funds to expand the house. This is not always the case for many entrepreneurs with small houses.)

2. Know that it's going to be expensive.The cost of building a home office boils down to how much you want to put into it. Factors such as architect and contractor's fees, size and other issues will affect the overall expense. But it's a fair bet that building office space is going to be more pricey than a makeover — often, substantially so. Tim Carter of AsktheBuilder.com — a home improvement Web site — estimates that new construction costs can range from $95 to $150 a square foot or more depending on your location. By contrast, converting existing space generally runs a lot lower. (Depending on the project, you may only need to insulate, paint, carpet or knock down a wall.)"(Building new) is vastly more expensive than converting an existing room," says Carter.

3. Be prepared for some inconvenience.Another issue has to do with the building process itself. Should you decide to move ahead and build from scratch, know that the noise and the mess may prove a major disruption — one that can drag on for months. Consider renting short-term office space outside of your home so you can be as productive as possible during the course of the job. Kasanoff was lucky during the six months that his office was being built. He was able to work in office space provided by a former employer. "I was fortunate to be able to get out of the house so I could work," he says. "You should never underestimate how disruptive this can be."

4. Think about where the office should be located.If building a home office seems a viable choice, think carefully about where you want to build it. Consider settings that are a good ways away from household noise, kids, pets, Oprah and other distractions. When he built his space, Kasanoff made sure that two heavy doors separated his office from the rest of the house. John Putzier, president of FirStep, a Prospect, Pa., human resource consulting firm, positioned his office to provide a completely separate entrance. "Not a lot of clients come to my home, but I didn't want the office to feel as though it was in my home," he says. "Psychologically, it makes a difference."

5. Sweat the small stuff.Since you're going to the trouble and expense of building a home office from scratch, pay attention to the little details that can make a good work space great. For instance, make certain there are ample electrical outlets. Carter says a fully-loaded office may require two 20 amp circuits to power everything. By the same token, think about lighting, storage, space to move around and ease of accessibility for everything you expect to have in the office.

6. But don't overdo it.The freedom to craft your own unique office space has a downside. It can be far too easy to drop money on things that, however attractive at the time, are frivolous in the long run. Make sure that you will really use costly built-in shelves, expensive lighting systems that could easily be supplanted with less costly fixtures and other potential money pits. "I know a lot of people who overbuilt before they had the revenue to justify the expense," says Putzier. "I knew one fellow who went out and bought a $20,000 piece of art. Two years later, he was cutting back. When I started, I knew I couldn't even afford a velvet Elvis."

7. If need be, check to make certain that your plans are legal.If you're considering a home office without such amenities as a separate entrance, parking for visitors and the like, you likely have free rein. If, however, there will be a visual impact on your surroundings, make sure your local zoning allows the project. Depending on where you live and how your neighborhood is zoned — residential, light commercial and such — you may be limited on how much customer traffic (parking spaces included), along with how you advertise and your external appearance may be. Don't go to the expense and effort before you're certain what you're going to build complies with the law.