I would suggest you file 485 for yourself only. even with kids only you are likely to be asked to turn in tax return for public charge clearance.
for your h4, let her stop that business now, and go back to china for a few weeks, and apply for h4 visa in china and reenter. after that, file 485 for h4 and kids as follow to join. never do that business again until 485 approval. document the de-registration of the business very well as evidence she stops doing it.