There's probably nothing as satisfying as going to work for oneself, setting your own hours and getting paid directly for the work you do. So far so good, right? Now consider something else: Headline-grabbing incidents pertaining to businesses being sued for millions of dollars come to light very day. Let's not forget that we live in a deeply litigious environment where the slightest slip-up could drain you of your resources. If you are a small to medium-sized business owner you would be aware that most states in the US allow you to open a business in as less as $100, or even less. Being a sole business owner, however, means that you don't get any protection as far as your assets are concerned. Tax benefits also do not accrue to you. You can go into a partnership, of course. But be warned: you can be held responsible for your partner's fool-hardiness or excesses. Lawyers advise drawing up a contract beforehand. This too, can invite headaches for you if your partner goes bankrupt in which case you will be required to pay his her debts. The best course to take, if you are going to become a business owner, is to take up a limited liability partnership or LLP which protects you against double taxation among other things.

Obviously, business cannot be conducted in a vacuum. While entering into a business agreement with another party, it is best to be wary and keep your ears pinned to the ground. What we mean by that is, you are best advised to put all your communication into writing. This way you can avoid costly misunderstandings, heart-burn and ultimately, ill-health.

While drawing up an agreement make sure that you and the other party or parties understand exactly what each term means. Very often, a deal is likely to change, especially with regard to deadlines etc; make sure the agreement reflects the provisions for change. A well thought out and well written agreement will save you from unnecessary hassles and disputes. A word of caution, actually a golden rule: anybody refusing to or showing reluctance to enter into a written agreement should not be entertained.

Do get your attorney or tax advisor review your records. This is imperative so that you know you are following corporate rules and regulations to the ‘T'. There is absolutely no point in paying your attorney thousands of dollars to set up your company if you are not going to follow company rules. The most astute of attorneys will not be able to save you from trouble if anomalies are discovered in the way you conduct your business.  

If you are determined to go it alone as far as your business is concerned, there are quite a few opportunities now available through the net. Evaluate your skills and, even more important, carry out research to find out if a market exists for them. Beware of ads, though, that promise the offer of work from ‘the comfort of your home'. For certain types of work such as medical billing you might require a certificate or license. Also, some jobs are simply not allowed to be performed from home. You are best advised to check with the US Department of Labor in your neighborhood.

Whether you are running your business on your own or with the help of partners, the issue of personal guarantee against a loan or line of credit arises sooner or later. We recommend that you read the personal guarantee agreement carefully before signing on the dotted line. You would be better off getting a lawyer to review it. Bear in mind that you don't need to sign every time in every situation. Plus, if you are not being extended any credit by your business vendors, just refuse to sign. The best way to avoid signing a personal guarantee for any corporate liability is to ensure that your business is a success. There are other ways of getting around personal guarantees, especially in situations involving leasing where you can get away by offering a larger security deposit. Also, bear in mind that you don't need to make your spouse - unless he or she is involved in your business - a co-signatory.

In order to shock-proof your business it is important that you insure it. Even if you keep your insurance to the bare minimum consider doubling your liability limits. By doing so, you render it almost invulnerable to claimers. You also get a lawyer to fight your case,   thus restricting the hole in your wallet.  

Most businesses take their equipment on hire or lease. You might prefer to own all your equipment but do remember that you stand to lose your assets in case of a lawsuit. You would be better off getting a partner (or a separate corporation created by you) to hold the title to your assets which may be then leased back to you.

Quite a few businesses nowadays employ freelancers or ‘contract' workers.  While there is absolutely nothing wrong with this arrangement, please be aware that your freelance worker could land you in trouble by causing a lawsuit.

Certain rules should be followed while hiring freelancers. Do thorough backgrounds check; if possible, ask for recommendation letters from former employers etc. Review their work from time to time. It is also important that that you spell out guidelines clearly and set appropriate deadlines. Also get your freelancers to sign a contract in which you clearly state that all the material produced belongs to you.

A stitch in time saves nine. A watchful eye saves your business.