Forget sudden riches. In fact, you may suddenly become poor, particularly in the startup phase when you are equipping your office and buying inventory. Money will be spent, but little or no money will be coming in, at least initially.
Don't jump into starting a business without a plan for how your business and your family will survive without a steady income during the lean startup phase.
"The term 'undercapitalized' is used regularly in small-business bankruptcy filings," says Alan Guinn, CEO of The Guinn Consultancy Group Inc., small-business consultants in Bristol, Tenn.
What Guinn shares with clients who are thinking of starting a business is this: You can never have too much money. "Keep this in perspective, and budget your expenditures accordingly," he says.