The Golden Rule for startups is the most basic principle in business - revenue minus expense equals profit.

It's that simple. And hard at the same time. From the outset, entrepreneurs must focus on two things revenue and expenses. Too often in the heat and passion of launching a company, mistakes are made about incurring expenses. In other words, managers make bad decisions on managing expenses. Capital is precious during the startup phase. Guard it ever so carefully. Serial entrepreneur, Wil Schroter, maintains, "Startups need to be frugal."

1. Ditch the office space. The office space lease is probably the single worst investment you make with your money. 2. Forget about hiring. The second worst offender on the cost analysis is headcount. Hiring staff in start-up mode is generally a horrible idea. 3. Write on your hand. Startups don't need office supplies. You need a barely functional computer (get one cheap through an online auction), a cell phone, which will also be your main company number, and write on the back of your hand. Anything else is a frivolous expense that's absolutely unnecessary.

Oh, the other thing - revenue. A company cannot succeed without revenue. Everything you do needs to be focused on creating revenue from the start. Customers create revenue. Be customer focused on day one and never lose the focus. Schroter, CEO of Go Big Network, offers this advice -

Only spend on stuff that makes money.

If you want a simple way to determine what to spend money on, just focus on expenses that directly relate to income, such as marketing and sales. If it's at all possible to deliver your product or service without an expense, then it's not essential.

What you'll find by adopting a no-expense-is-necessary mentality is that your road to profitability will be much shorter. Then, when the cash starts tumbling in on the profit side of the equation, you can slowly start to add a few expenses to the mix.

RightNow Technology founder and CEO Greg Granforte agrees with this approach.

There's a sign that I keep on the wall of my office. It says simply, “Nothing happens until somebody sells something.” In other words, sales is where your business begins. Sure, you may have a great product or service that you’ve worked hard to develop. You may have hired a fantastic staff. You may have cash in the bank, a logo and letterhead, a beautiful office, computers on the desks, all those things that come to mind when we picture a business. But that’s not what makes a business. Only sales can do that.

This is good news for bootstrappers. Bootstrappers can’t afford fancy offices or big staffs. They may not even have a finished product yet. But the bootstrapper doesn’t need those things to get started. As soon as you can start selling—that is, go out and find customers willing to buy his product or service—you have a business.

(Learn how Granforte bootstrapped RightNow Technology into a company with a market cap over $500 million by clicking here).

Live by the Golden Rule and your company stands a good chance of succeeding. If you don't follow the Golden Rule, then your company will most likely fail, like the vast majority of startups.

Simple. But hard to do.