No one sets out to lose money in business. And with proper planning, you can avoid many of the pitfalls budding entrepreneurs face as they get their businesses up and running.

Here are some useful tips for creating a sustainable business model without tapping into your life savings or mortgaging your home.

Save your money! – Before you even get started, start saving money. Don’t go into business in debt. You don’t want to open your doors owing money to friends, banks or the Small Business Administration. Neither do you want to empty your savings account. You don’t need the additional stress! It can take months or even a year to make a profit in your business. Even if you get business coming your way immediately, you’ll want to be in a position where you can plow your profits back into your business for better equipment, marketing, more space or more people.

Start small – A garage or a spare room will do just fine for your business. Don’t lease office or warehouse space you don’t need. You can always grow slowly. If business suddenly booms, you can always hire temporary employees and use up more of your house. Many great businesses have been doomed because they expanded too quickly, stretching their resources. By starting small, you can make your inevitable mistakes on a small scale too. And you will make them. Everyone does.

Protect yourself – If your business will incur debts, consider incorporation. That way your business debts will remain separate from your personal accounts. If you run into trouble, this will provide you some protection. You may also want to consider business liability insurance. Your homeowner’s policy will not protect operations related to your business. If your workspace suddenly floods and ruins your inventory, you won’t be covered unless you have business liability insurance.

Pay bills and taxes on time – Keeping your obligations up to date is vital to the success of your business. When money is tight, it’s easy to put off a bill or pay the taxes late to get your through a lean time. Don’t do it. You will lose the trust of your vendors and your credit rating may take a hit. That means higher interest rates down the road or less favorable terms with your vendors.

Most important of all, pay your taxes on time. This is particularly true if you pay employment taxes on any employee wages. State governments and the IRS can be very unforgiving when payments are missed and their can be substantial penalties and interest involved. In fact, they can even go after your personal assets if you owe back taxes, even if you’re an LLC.