The increasing popularity of the home office can be directly attributed to substantial advances in technology over the past quarter century.

Affordable personal computers, modems and fax machines have kindled the entrepreneurial spirit in the best of us. The advantages of telecommuting on the information highway are evidenced daily: rush hour traffic is history; the luxury of setting your own work schedule; and the ability to take care of personal tasks as need be. The list goes on and on.

However, for every advantage, there is a disadvantage. Working out of your home can sometimes be a lonely experience. Distractions can keep you from completing a full working day. And finally, temptation calls. Will you be able to resist the temptation of playing with your children, watching television, taking personal calls and sleeping that one extra hour?

These are just some of the question you will have to ask yourself. Clearly, the concept will not work for everyone.

There are two types of home-based offices. The first involves opening your own business. Self-employment is most obviously an attractive option for many people. However, this is usually the more expensive route and will involve what can be a significant outlay of expenses. You will have to dedicate space in your home as an office, buy functional office furniture and invest in a personal computer, software, monitor, printer and modem. A fax machine is also a must in an office environment, helping to cut down on the cost of couriers significantly.

The second option involves working for an outside company out of your own home. The company you work for may choose to assist in the financing of your office equipment or purchase it outright. For many companies, the home office allows them to save on fixed expenses, such as leasing less square footage and reducing overhead. Smaller companies are most likely to offer a telecommuting alternative to their employees, although larger companies such as AT & T, American Express and J.C. Penney all have pilot programs in existence.

In coming years, the telecommuting trend is expected to continue as more and more people work out of home offices.