A contract is often referred to as "a meeting of the minds," "a bargained-for exchange," or "a mutual promise supported by consideration." Instead of getting bogged down in the legal-ese, it is important to first talk about why it is prudent to have a written service agreement.

What I can tell you is that renting a commercial space is nothing like renting an apartment or a home. Negotiating a lease for commercial space takes due diligence, business planning, budgeting, patience, and a willingness to walk away from a bad deal. For the purposes of this article, I want to give you a sense of what to expect when thinking about entering into a formal lease for your business. I do not mean a co-working space agreement or a sublease. When I say lease here, I mean a lease where your business is named as the tenant (or the "lessee"). You might personally sign a guaranty, which we will talk about more a bit later.

An LLC is form of doing business, registered with the Secretary of State, that combines the tax advantage of pass-through tax treatment for income with the limited liability and flexible ownership structure. I know, I know, I've fallen into legal-ese again. Let's break this down:

A sole proprietorship, which I will refer to as a “sole prop,” is an unincorporated business, which means you didn’t file any paperwork with the secretary of state, and you don’t have a separate taxpayer ID number (akin to a social security number for a business). Any income that you make in carrying on the business is reported with your personal social security number. You don’t have an operating agreement or a shareholder agreement. You might use a “DBA” – a “doing business as” for marketing purposes, but it’s still you running the show and reporting the profits received.