I’m retired now from a consulting firm. We 4 decided to go into business for ourselves about 19 years ago. With no funding, we got a reference to a VC, who looked at our business plan (one of had an MBA and wrote it). Her advice? Avoid the VC route; they aren’t interested in really small businesses and will try to control everything a la the Golden Rule – them with the gold maka da rules. Best advice we ever took. We threw our credit cards and $2500 each in a pile and lived on savings for about 4 months before turning a profit and taking the back pay. It’s been profitable since. A consulting business is different from a mfg business – little or no stock beyond office supplies including computers so no large up-front costs to absorb. Payroll of technically skilled people may average higher, depending on the labor situation the manufacturer faces. We treat banks the same way – keep your operating cash liquid in the bank and everything else in a variety of conservative investments of varying liquidity. Never borrow from a bank – if you need the funds they don’t want to lend them, and if you don’t, and look like a better risk, they want you to borrow. They’re just temporary strong boxes. Fund payroll out of cashflow. Owners must pay workers first and on time before they take a dime. Owners get to take more home at the end of the year only if everyone has been fairly compensated and if possible, bonused and praised, and then only if there is money safely left to do so. MORAL – do not depend on others for money to get your business going or to keep it going, which is worse and harder to dig out of. Control things yourself. If you can’t, hey, it’s a Darwinian world. Don’t break laws or confidences, and heed legal advice. Be fiscally conservative, socially reasonably liberal, and retain a sense of humor and flexibility.