Many startups fail because of financial issues. Moving forward too fast with spending, before determining a sound business plan and budget. The best way to avoid these shortfalls is to start off modestly. Look towards a home office, rather than a lease. Consider used furniture, rather than new. Don’t spend any more cash than you have to invest in the company and absolutely avoid debt.
Starting a company is a large responsibility and it takes a significant amount of time, ambition, effort and capital. Even with those inputs, there is no guarantee of profit or success. The most important consideration is making sure you are able to exploit a niche that needs to be filled. Try not to start a company in an area of business that is rife with competition unless you already know that you have a way to earn business durably and with a competitive advantage.
Provide the best product or service possible for a fair price while also ensuring that you have some margin of profit so that you can reinvest your earnings back in to your business and its future growth. Remember that there is no perfect plan to success, but there are strategies that one can employ to make it more likely.
I started my business back in 1999, funding the startup by selling my car and saving cash by working out of my parents’ house for a few years. After that I saved enough to get my own place and work from my own home office. This type of strategy allows you to ensure that you can cut your losses if you don’t succeed without having to file bankruptcy, and if you do that success can build over time in to a booming business.