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This.

On the flip side, if you're working on a side project you want to monetize but don't want to bother incorporating until you get a bit of traction, then yes, in the interim it can be worthwhile to keep the finances separate in a separate personal bank account for accounting and tax purposes.

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Agreed, but caution is warranted here. (IANAL, but...) Ask yourself if you are willing to risk personal liability at that early stage by essentially operating as a 'sole proprietor' instead of taking the steps to create a new entity that is separate from yourself. For some businesses this may be fine, but it's certainly something to evaluate. For example, if you are (e.g.) aggregating information from various places on the web and then simply presenting it to users, that has a much different liability footprint compared to (e.g.) a dog walking business (what happens if a dog you're walking is run over by a bus?) or (e.g.) catering (what happens if your clients get food poisoning?) etc. In short, it would behoove you to ask a business attorney this question so that she can evaluate your business model and give you a recommendation.

Also a very good point!

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