Mistake No. 2: Improper Business Structure

Is it sole proprietorship, S-Corp, or Limited Liability Company? Entrepreneurs usually have a tough time choosing the right business model for their company and often ram in to making wrong choice. Since there are completely different procedure for each type of the business and several limitations regarding the reveue models of the company, a slight mistake can create a lot of legal trouble for the company.

How to avoid it: Rachel Rodgers recommends that incorporation model is the most preferred one. Since it's a more complex structure, it shows customers, banks and investors that you're serious about being in business over the long haul. If you opt for the simpler route of sole proprietor, she suggests looking at business insurance to protect your personal assets in case your company is sued and loses, reports Entrepreneur.com.