Trying to sponsor first H-1. seek guidance

[BigBuddy]

Hi Guru's

I have an S-corp for almost an year now.Got some good business over last one year.

I am planning to sponsor 'New H-1'. One of my friend in India- IT industry needs sponsorship. Need some guidance from immigration.com biggies on following :

1) I am currently operating out of home office. I have read in couple of places that Corporation needs to have a Business location/office 'in case' INS sends an RFE. I am myself doing consulting and at client sites all the time and never felt a need for an office. Is this a mandatory requirement for H-1 processing by an employer to have a Business office location? Anybody has got an idea how to deal with this situation.ready to invest in a cheap office (in Southen Cal area).

2)Read and Heard this--Employer needs to have a Contract with their clients for the sponsored candidate(in this case my friend). This contract or Purchase order has to be with the end client and not with any bodyshopping company.This is going to be a chicken and egg story, since we won't get a contract till that H-1 consultant comes to US and starts giving interviews.
Any thoughts on this one? Is this really required.

3)Ability to pay- This can be proved to INS by giving Bank statements and Taxes filed over last one year. Is there anything employer needs to have apart from these documents?

Any other issues which should be well-thought of before getting ready for an INS onslaught?

Gurus--Please give your thoughts on these issues . Any help greatly apprecited. Thanks in advance.