Can't Afford to Incorporate?
Here's a solution to use until your business takes off.
If limited liability is not a concern for your business, youcould begin as a sole proprietorship or partnership so thatmonetary losses in the early years of the company can shelter yourother income. These "passed-through" losses can offsetother income you may have. Then, when the business becomesprofitable, you can incorporate.
Excerpted from Start Your Own Business: The Only Start-Up GuideYou'll Ever Need