There are many things to consider when you go into business for yourself like the ability to protect your personal assets. One of the most important is that, absent some LLC or corporate protection, you are usually held personally liable for any and all judgments and debts that your business will incur. This includes business loans, balances on invoices due to suppliers/landlords, and any judgments against the business as a result of a lawsuit.
If you don't take the time before setting up your business to protect yourself, a knowledgeable creditor can easily come after your unprotected personal assets, including your car and your house, investments, to pay for these outstanding debts.