How to avoid going broke soon after starting a business

"That's not always the best choice," West Steinman said.

Other entrepreneurs will ask West Steinman how they can grow their brand or company. Her response: "Don't quit your day job until you're ready."

Self-employed people should always examine their family and personal needs to see if they have to take freelance or outside work to supplement income. "When is your trigger for going full time? How does the business need to perform in order for you to be full time?" she said.

Some family situations, West Steinman said, require a two-person income, so keeping a steady source of income until you're ready to transition into a full-time commitment is acceptable.

Working multiple jobs could lead to burnout, though, so seeking other sources of bridge money is wise as well, experts said. To avoid adding debt, owners can search for government grants or use crowdfunding campaigns.

Maazah recently launched a campaign on Wefunder, an online crowdsourcing platform that allows members of the public to buy small equity shares of startups and small businesses. The money will help support the Target and Whole Foods launch, Sajady said.

Turn to family, spouses

When Terace Johnson wanted to start Spotlight Staffing, her job-placement company, in 2021, she asked her fiancé if she could leave the workforce and focus on the business. He had no problem being the sole provider.

"He believed in everything that I stood for and still does,," Johnson said.

The company made its first $100,000, and Johnson's partner continued to work, allowing them to increase their savings account. When her company hit a dry spell in the middle of 2023, Johnson decided to not pay herself. Fortunately, the couple was able to get by on their savings. Once things improved, Johnson tightened her company's budget in case something like that were to ever happen again.

It's a good idea, Johnson said, to establish boundaries with your partner to know when, and where, money will come from.

"Having a supportive partner is truly how I get by," Johnson said.