"If at first you don't succeed, try and try again."

Though there's some debate as to who first coined this expression, no doubt we've all heard it. Nowhere may this terse saying be more appropriate than when it comes to owning and operating a small business.

In 2006, I took a gamble and opened a martial arts studio in my hometown. The idea was simple enough: Create a family-friendly karate school that parents would feel comfortable taking their children to. The idea was fantastic. The only problem was I jumped in with almost no cash and zero business sense.

I was so enamored with the idea of having my own place that I threw caution to the wind. I took a few thousand out of savings and borrowed the rest. I applied for and received a $15,000 personal loan which I nearly exhausted before the place had even opened.

To make matters worse, I put myself on the payroll from day one. Big mistake. By the end of my first year I was losing money hand over fist, though I kept using whatever I took in to satisfy my personal expenses. I used income from the studio to pay down my credit cards, pay off my auto loan, my phone bills, and even bought myself a new wardrobe. I managed to do all this while having trouble paying the electric bill and the rent on my business.

Not surprisingly, things continued to get worse and exactly 21 months after I opened the studio, I was forced to close the doors for good. I had bled the business dry and was now staring at a checkbook with a zero balance.

So what went wrong? Well, a few things as I see it. First, I had no financial backing, no business acumen and no contingency plan. Second, I did not seek, nor receive, any input from my friends and family. I tried to do everything on my own. Also, I got selfish. In the beginning, cash was pouring in. I got used to putting that cash in my pocket and when it stopped coming in, I was reluctant to change my habits.

It wasn't all bad though. I learned some valuable lessons on how to manage money from this experience and I'm proud to say that in 2010 I launched another startup. I now own a personal training business that is doing remarkably well.

What's different this time? To start with, I've got a solid financial plan in place. I'm not leveraged at all. That means no loans, no line of credit and no debt of any kind. Also, I have separate business and personal accounts. There is no crossover between monies. Whatever the business generates now gets reinvested or saved. No more skimming to cover personal expenses. This time around my business is on a slow growth path because I spend only what I have. Still, it's a great feeling to be above water every month. I'm confident that I now have the right plan in place to help me avoid the failures of my past.

*Note: This was written by a Yahoo! contributor. Do you have a small business story that you'd like to share? Sign up with the Yahoo! Contributor Network to start publishing your own finance articles.

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First Person: How Failure Ensured the Success of My Latest Startup