Many entrepreneurs start their small businesses at their kitchen tables or in their garages with limited funds. Often, they find it difficult to separate their personal and professional lives and their personal and professional financial assets. When the business gets big enough to be self-sustaining, the owners don't always think about protecting their personal assets from their business liabilities. If you find yourself in this situation, what should you do?

1. Decide on a business entity

Mixing business and personal funds is always a bad idea. Your first step should be to consult an attorney with experience in advising small businesses in your state. The attorney can review the various business entities — limited liability corporation, limited liability partnership, general partnership, Subchapter S corporation or C corporation — and the pros and cons of each one. If you expect to do business with federal, state or local governments, the attorney can also advise you on the rules regarding minority businesses. With the correct structure, you can create a wall between your personal assets and your business assets, which is significant in case you're facing significant business liabilities.