Jeff's wife Diane did well, and I am glad she did. However, I agree more with the suggestion in your post regarding incorporation.
I am an attorney and consultant to entrepreneurs. I help people get started. I agree that cost savings at the beginning are very important, and leases and expensive office furniture are easily avoided.
The risk associated with not incorporating can be very high, and the risk is directly linked to personal finances. Spending a few hundred dollars to incorporate to protect those finances seems to me like a wise investment.
If nothing bad happens -- as in Diane's case -- then the entrepreneur already has a corporate structure to work with. If something bad does happen, then all liability is personal.
