Many first-time entrepreneurs choose to save money on overhead and office space by running their businesses from home. While there are a lot of great things about running a home-based business, it’s not for everyone – and the reality might be different than you expect.

Whether you’re a freelancer, a consultant, a contractor, or interested in starting a home-based business related to cooking, crafts, art, photography, a web startup or some other creative pursuit, here are some of the “Myths and Realities” of being a home-based entrepreneur.

Myth: Being a work-at-home parent makes it easy to juggle work and kids.

Reality: You need to be able to separate work from family, or else you won’t be able to give either the attention they need.

Many parents start a home-based business with the idea that they’ll be able to save a lot of money on daycare and easily focus on both of their top priorities – raising their kids as well as doing their work. But the truth is that working with kids in the room is pretty much impossible. You’ll be constantly interrupted, and constantly looking over your shoulder…productivity and parenting are hard to combine.

If you are going to start a home-based business, you owe it to yourself (and to your business, and to your kids) to create some kind of division and separation between your business and your family.

Myth: When you work at home, you can work anywhere in the house!

Reality: Create a dedicated workspace, preferably with a door that shuts.

Perhaps the idea of working at home fills your head with visions of relaxing on the sofa with a cup of tea while you check your e-mail, or writing out business proposals in a sunny spot of the living room. While it doesn’t hurt to get a change of scenery, you’re likely to be more productive if you create your own dedicated office space within your home – what Alan Weiss calls a “sanctum santorum” where you can plan, think, create and produce in peace and quiet.

On a related note: get a dedicated phone line and/or cell phone that is used only for your business. You don’t want to have to take business-related calls on your home phone when you’re exhausted/changing a diaper/in the middle of cooking dinner. You don’t want your toddler playing “Angry Birds” on the smartphone you need in five minutes for a client conference call. Creating some separation between work and family is not just a matter of space, it’s a matter of sanity!

Myth: Once I’m working from home, I’ll never want to leave the house!

Reality: Working at home can be isolating.

Not everyone is cut out for working at home. It might sound great to long-time cubicle dwellers, but the reality of running a home-based business is that it’s all too easy to get isolated and start to go a little bit stir-crazy. Make regular commitments to get out of the house. Meet your friends for lunch. Network (in-person, not just on Twitter or LinkedIn) with colleagues and prospective customers. Exercise every day. Every now and then, go spend a workday at the library or a coffee shop, just to get a change of scenery and some rejuvenating exposure to the outside world.

Running a business from home is a great way to get started as an entrepreneur, but make sure you keep in mind some of the possible pitfalls and productivity traps. You owe it to yourself and your business to be able to close the door and go away for a while, and you also owe it to your family to be able to leave work at work – even if “work” is “upstairs in your home office.”