In order to build our new Linux system, we will need some space: an empty disk partition. If you don't have a free partition, and no room on any of your hard disks to make one, then you could build LFS on the same partition as the one on which your current distribution is installed. This procedure is not recommended for your first LFS install, but if you are short on disk space, and you feel brave, take a look at the hint at http://www.linuxfromscratch.org/hints/downloads/files/lfs_next_to_existing_systems.txt.
For a minimal system you will need a partition of around 1.2 GB. This is enough to store all the source tarballs and compile all the packages. But if you intend to use the LFS system as your primary Linux system, you will probably want to install additional software, and will need more space than this, probably around 2 or 3 GB.
As we almost never have enough RAM in our box, it is a good idea to use a small disk partition as swap space -- this space is used by the kernel to store seldom-used data to make room in memory for more urgent stuff. The swap partition for your LFS system can be the same one as for your host system, so you won't have to create another if your host system already uses a swap partition.
Start a disk partitioning program such as cfdisk or fdisk with an argument naming the hard disk upon which the new partition must be created -- for example /dev/hda for the primary IDE disk. Create a Linux native partition and a swap partition, if needed. Please refer to the man pages of cfdisk or fdisk if you don't yet know how to use the programs.
Remember the designation of your new partition -- something like hda5. This book will refer to it as the LFS partition. If you (now) also have a swap partition, remember its designation too. These names will later be needed for the /etc/fstab file.