If you're self employed, you're very familiar with the concept of a home office. Even if you're not, a home office is a necessity, whether it's to work on extended projects or just a place to handle the business of running your home.

Some newer homes have kept this in mind with a design that gives you an appropriate space. But what do you do if your home is older? With a little planning, you can have an office that incorporates everything you need.

A home office can be anything from a makeshift work station in a little used corner, to an expansive space that's private, high-tech, and professionally designed and equipped. It all begins with a plan. Get out a pad and pencil and write down what you need. Evaluate how much workspace you'll need. Depending on the nature of your business, you may need as many as five separate areas, including production, administration, computer, meeting, and storage. Or, you may simply need a space to pay bills and plan the next day's activities.

If the computer is an important part of your office, make it the focal point of your design. Be sure to allow enough space for the computer, monitor, printer, keyboard, and any peripherals that you may add in the future. Plan space to accommodate any reference materials, as well as a worktable for paperwork.

If your actual job is done from this space, you may need a production area. Manufacturing and assembling would require a separate work area, so be sure that your design allows for the necessary space. If you are producing spreadsheets, articles and reports on the computer, there's no need for a separate area.

You would also need an administrative area for running the business. This area usually contains the phones, fax machines, copier, files, and related equipment. Be sure to include a work area where you can pay bills, create invoices, open the mail, etc.

The most neglected area of a home office is the storage area. Paperwork, records, supplies, and materials need to be stored out of the way of the day-to-day operation. Consider creating two separate storage areas: one for things you need to retrieve daily, and another, less handy area for long-term storage of items only used occasionally. By properly outfitting a closet, you'll have everything neatly organized and easily within reach.

Once you have an idea of the space you'll need, you can decide where to locate the office in your home. Possible locations are a spare bedroom, the garage, family room, attic or basement. Each space has advantages and disadvantages.

An unused bedroom is a good choice because the space is finished, and has electrical outlets, as well as heat and central air. Spare bedrooms usually have good light and ventilation, as well as a closet for storage. On the other hand, if you have to use your office to meet with clients, you may not want to bring them through the main part of your house to get to the office. Depending on your needs, you may want to investigate the cost of creating a separate entrance from the outside.

The garage is a good choice because it's located away from the activities of the house. On the other hand, most garages are unfinished, which would require you to insulate the floors and walls, and install electrical, heat, and air conditioning.

The family room is another option, and is already equipped with power, heat, and central air. Often, family rooms have a separate entrance that would be suitable for visiting clients. Just make sure that the rest of the family knows this room is off base when you are doing business, whether in person or on the phone.

The attic is another alternative. It's usually away from the activities of the house, but only accessible from inside the house. Attic spaces tend to be hot in the summer and cold in the winter, despite insulation. If you're considering an attic space for your home office, be sure to count only the floor space under the full ceiling. The space under the eaves is great for storage, but shouldn't be counted in the total square footage for a work area.

If your home office is strictly for personal business, a spot in the kitchen or dining room might work just fine. An armoire that holds personal papers, a few supplies and your computer, may be all you need. Before you make the decision on where to locate your office, check local zoning laws.