More than 70% of the nation’s startups use personal savings or assets as a primary source of funding when starting a business (WSJ Consumer Finances Study). Yet many are unaware of the potential pitfalls and mistakes they should avoid when using personal finances to launch a startup.

How can you avoid making huge financial mistakes when it comes to bootstrapping your small businesses?  Here are ten tips to help you succeed when you’re ready to finance your next big idea.

1.  Don’t expect profits overnight.

The mistake it seems every young entrepreneur makes is expecting successful and profitable results to be attained more quickly than they can realistically be attained.  It’s everyone’s dream to start a successful business, but often, it’s under capitalized and must be bootstrapped–which, in all honesty, takes more time than any entrepreneur wants it to take.

- Alan Guinn, Managing Director and CEO at  The Guinn Consultancy Group, Inc: @AGuinn

2. Do show your profits.

The biggest mistake I see on a regular basis from businesses that are bootstrapping is that  they attempt to lower their costs, including minimizing their taxes, which is a perfectly fine thing to do. But what happens as they grow is that their financials show losses or breaking even year after year. That makes their growing business less “bankable” when they need access to conventional sources of funding, likes lines of credit or term loans. Showing profits are a good thing when approaching a bank. It demonstrates that the business is viable and decreases the perceived risk.

- Kon Theodoridis, Commercial Loan Officer at Wells Fargo: @Ask_WellsFargo

3. Don’t grow too fast.

I’ve found that small business owners and entrepreneurs try  to grow too fast, too quickly. From personal experience, I’ve definitely had to weigh the benefits against the cons when it comes to pursuing significant growth of the company. While we have grown to a fairly large size today, there is still plenty of room to grow. However, we have decided to maintain the status quo and simply pursue slow and steady growth so that we maintain the quality of our content, site, and team atmosphere with our staff.

- Andrew Schrage, CEO and Editor in Chief at Money Crashers: @MoneyCrashers

4.  Create an emergency fund.

An emergency fund is just as essential in business as it is in personal finance. Maintaining a sufficient cash flow prevents a new entrepreneur from relying too heavily on lenders and lines of credit. The last thing you want to do as a start-up is create debt that could’ve have been avoided with a little more planning.

- Jesse Mecham, Founder and CEO at You Need a Budget: @JesseMecham

5. Don’t run out of cash.

Running out of cash is the #1 cause of death among startups. You need to carefully manage A/R and A/P so they match up well, as well as minimize expenses big time, control inventory build-up, and aggressively go after early revenue (paying customers beget more paying customers).

- Mike Scanlin, CEO at Born to Sell: @BorntoSell

6. Stay on top of your record keeping.

Entrepreneurs tend to not like the accounting/numbers aspect of their business because it is not as fun or “sexy” as the product building or rainmaking – but it is crucial as a thermometer to the business health. Too many great entrepreneurs with great ideas fail because they simply were not financially feasible.

- W. Michael Hsu, Founder and CEO at Deep Sky Co: @DeepSkyCo

7. Check out your funding options.

Most people assume that financial help only comes in the form of formal investors or your individual self. It’s a very either/ or philosophy. In fact, there are many options to get money into your business: crowdfunding, strategic alliances for resources or in-kind products/ services that equate to real money, and non-financial investors such as incubators, public and non-profit supporters of entrepreneurship, and corporate foundations.

- Caroline Ceniza-Levine, Career and Business Coach at SixFigureStart LLC: @SixFigureStart

8. Don’t underestimate time and money.

Business owners underestimate the amount of expenses and time it takes to set up the business and the length of time it takes to start seeing a meaningful return on their investment. Thus it is always good to provision or double the time and effort it takes in terms of investment and double the time it takes to start seeing some meaningful cash flow to analyze the viability of the business idea.

- Rohit Arora, CEO and Co-Founder at Biz2Credit: @biz2credit

9. Adapt if necessary.

The #1 mistake entrepreneurs make when bootstrapping their business is having an aversion to change. As a business owner it is vital to be in tune within your industry and be flexible and willing to change with the trends and the market. Don’t hold on too tightly to any idea or formula.

- Ryan Evans, President at Rand Media Group: @RyanEvans

10. Don’t put the cart before the horse.
In other words, don’t take everyone’s advice or take on more expense than is absolutely necessary to get things rolling- viably. How to get things done more economically should be the mantra of any entrepreneur. If more business owners took the time to shave their expenses down,they would find that they could get much more done for much less.

- Jeff Milano, CEO at The People’s Chemist: @Peopleschemist

Do you have any bootstrapping “rules for the road” that you learned along the way? If so, share them in the comments section below. Did you enjoy this article? If so, subscribe to YFS Magazine and never miss an update. Don’t forget to make our friendship official and join Young, Fabulous & Self-Employed entrepreneurs on Facebook.

Photo Credit: © Fantasista