Handling money is one of the most important aspects of starting and running your own business. By doing so wisely you will be able to stay afloat during the lean start-up period and actually stay in business long enough to make money. Often businesses close because they have too much overhead and not enough money to pay the bills, due to the fact that they haven’t been in business long enough to build it up and the start-up capital has already run out.

If you are starting your own business, follow these 5 rules and you will never have to declare bankruptcy.
-    Have a business plan.
-    No loans.
-    No luxuries.
-    No employees.
-    Keep your day job.

Plan how you will use the money you have set aside for your business. Decide at what threshold of sales you will make additional investments in equipment, marketing, etc.

Do not take out a loan to start your business. Save enough money to finance it yourself before you start. This also means you cannot use your credit card to finance your business, nor your personal line of credit nor the equity on your home. These are not wise financial moves. Start very small if you must, reinvesting everything you make to build the business up. Do not get a loan until your business has been up and running for at least a year and is making money.

Do not spend money on business luxuries. You do not need high end office equipment when you are starting out. You just need reliable equipment. Skimp on things you will use personally and splurge on things that make an impression like business cards.

Do not hire employees for your small business if you can avoid it. If you need help, use sub-contractors. They are available for everything from accounting tasks to secretarial to computer work and much more. It will save you a great amount of money and you will easily be able to make cutbacks when business is slow.

Keep your day job, if you have one, so you do not have to rely on the income from your business to keep a roof over your head. Small businesses in start-up mode are notoriously bad sources of reliable income.

Live by these rules as you start your business and you will avoid the pitfall that many business owners find themselves in.