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Going back a few years I ran an IT Consultancy from home. Most of the work was done on the customers site and I never had the need to have people come to the house. We put our money in a larger shed and built a really good office in it.

The seperate shed/office kept the home and work life seperate which is highly recommended if you can do it. Nothing better than walking 10 meters to get home for lunch!

You need to think really hard if you do rent/lease something because you are committing to a fixed overhead which exists regardless of how well you are performing.