Starting out on your own will be one of the biggest decisions you make.
Whether you're going it alone as a freelancer, working as a creative team, or starting a fully fledged company, the pitfalls are by and large the same, and the same preparations are necessary.

When myself and Lyn Cunningham decided to start Make, we struggled to find information directly related to the creative industries, and starting out. A lot of blog posts were written by serial entrepreneurs, whose business models seemed to be built entirely around venture capital, funding, and building a service without a revenue model.
There was also a lot of advice offered to us by people who'd never run a company. We dismissed it out of hand.
There seemed also to be a distinct lack of realism and self-criticism, and a pious insistence that self belief will conquer all obstacles.
We found very little in the way of practical, realistic advice.

Since opening our doors four months ago, we haven't stopped, and I believe that's largely to do with our combined experience in the industry. I'll outline 10 things we believe you should do before you make the leap, and afterwards, when you've set yourself up.

Preparation

Have some experience under your belt
I can't stress this enough. When I went freelance the first time around, I had 2 years worth of experience in the creative industries, and it definitely wasn't enough. I'd barely learned enough to be an effective middleweight designer, and there I was, leading projects, and not really knowing how to do it. I messed up big time on small jobs, I didn't make much money, and I got very little repeat business. If you've just left college, or if you've had a job in a studio for a while and you're fed up with it, going it alone isn't going to be easy, and there are dozens of experienced designers out there ready to open fire on your work if you mess up. Sit tight, learn as much as you can, about design, about business, and about yourself and your potential clients. Consider it an investment in your own future, just like your college education.

Plan in advance, while you still have a job
This is just common sense, at least I think so. It doesn't matter if you hate your job, it doesn't matter if it's sapping your will to live, if you've made the decision to go it alone, keep that goal in mind, and sit it out. In addition, don't assume your current boss is a fool. They've established a business, they pay themselves, and they pay you. They've done something right for long enough to be in a position to do that. Learn from them, even in passing.
Getting your planning done while you still have a job and while you can still save money, is going to save you wasting away your first few months, and all your savings, while you sit writing a business plan and putting everything in place. Also, plan for every eventuality, and be honest with yourself. You aren't going to make 100k in your first year. You probably aren't going to make close to what you earned before you went it alone, so be prepared.

Have clients lined up
Now, while some people will simply poach clients when they leave their jobs, I don't advocate it.
That's a personal choice, but I'm not out to screw anyone over. If people choose to go with you when you leave, well, all's fair in love and war, as they say. Business is business.
Nevertheless, when we started out with Make, we had 5 jobs lined up, and a handful of prospects on the horizon. If you don't have clients lined up, and if you're sitting there thinking "how do I get business in?", go back to point 1 and have a long hard think. Starting out on your own isn't an ego trip, it's about controlling your own earnings, and your own working environment. If you can't bring in money, you've fallen at the first hurdle.

Be clear about what you're selling
Most non-creative people find the term 'graphic designer' confusing, even if it seems self explanatory to us.
Setting out your services in plain English will make you more approachable to potential clients. Even then, you're always going to struggle against perception.
I've lost count of the amount of times I've had people say "well, we thought we should ask you about our website, but you're an illustrator...".
If you have multiple skills, tell people about them, and promote them equally.
In addition to this, don't use industry lingo when you're selling.
People can't abide bullshitters, and that's what you'll be seen as.

After the jump

Don't burn bridges
Sure, you're your own boss now, you don't have to answer to anyone, inside you're saying "look at me now". If you run around bad mouthing people you look immature and petty.
You don't know where relationships might lead, or what relationships other people already have in place. Choose your words carefully.

Have clearly defined roles
This is equally important if you're a freelancer, even though you'll be filling every role. It's in line with 'Be clear about what you're selling'.
It's not only helpful to yourselves, and your workflow, but also to clients, in that they know who they're dealing with regarding any specific enquiry.

Get contracts in place, and take deposits
Even if it's for friends and family, put these structures in place. You have no idea what situation someone is going to find themselves in 4 months down the line, when you invoice them, and they may decide that because of your relationship, you should be willing to hang on to get paid, or simply accept no payment. Trust isn't implicit, it has to be earned by showing mutual respect, and by following simple rules, and sadly in business, you can't take anyone on their word. Likewise with larger organisations, if you don't take necessary precautions, they know they can keep you hanging on as long as they like. Get it in writing, put milestones in place, and get money upfront. If someone isn't willing to pay a deposit for your services, chances are they're going to argue the toss when it comes to final settlement.

Don't take on every job that comes your way
This may seem counter-intuitive, but there are plenty of cowboys and fools out there. Get involved with them and you'll be out of pocket before you know it.
Likewise, promising to do work that you're not really qualified to do is hugely destructive.
You may have spent a month or two making things in Dreamweaver. If you've promised you can design and build a CMS driven website with X amount of functionality, by X date, for X cost, you're going to be knee deep in your own shit before you can smell it, and there's no getting out without considerable loss to your pocket, and your reputation.
You can't do everything, and sometimes you just have to say no.

Look after the numbers
If you don't have a head for figures, pay your accountant more to fill in the gaps.
If you're in partnership, work out who is better at dealing with figures, and give them the responsibility.
Again, this ties into the earlier point 'Have clearly defined roles'.

Work yourself hard, but take time to recover
Again, self explanatory. If you force yourself to work harder when you're beginning to crack under the pressure, you'll crack.
If you want to be effective, take time out and relax. Don't sit and stress out that there are things you could be doing, if you're burning yourself out, you'll probably do them badly, or sit staring at your screen doing nothing. Strike a balance and stick to it.

It's by no means an exhaustive list, and I know I haven't covered everything, hopefully it's of some help to anyone thinking of making the move.

I welcome any additional points or feedback in the comments.