You must consider the options carefully, and how this will impact your lifestyle and your business. 

Advantages

• Less time and costs for commuting
• Increased flexibility in schedule, especially in dealing with family illness
• Potential tax benefits
• Less start-up costs

Disadvantages

• Less social interaction
• Liability and insurance needs
• Home inspections to meet licensing regulations (if applicable)
• Requires more self discipline

Other Considerations

• Childcare - Depending on the nature of your business, you may or may not be able to keep your children at home during the day while you work on your business.  In some situations, it can become impossible to care for the children adequately and tend to business needs at the same time, and you will still need to utilize daycares.  In other situations, business activities and childcare can be planned and coordinated for an optimal mix.  Consider your own situation carefully and how this balance may change as your children age.
• Comfort - Likewise, some home situations lend themselves well to running a business, and some do not. You may find an increased level of comfort in seating, dress, and working environment, or you may find a lack of space and privacy or an endless list of household chores to be too distracting for work.  If your space is small, you could become bored with being in the same place day and night.  The neighborhood activities or construction work can also impact your ability to work on any given day.
• Zoning - Your neighborhood may have zoning restrictions that could prohibit you from opening the type of business you want in your home.  Be sure to check the local city and county regulations.  These regulations may include signs, parking, customer traffic, materials usage, and other considerations.