I would advise incorporating as an LLC or a Subchapter S corporation. This gives you protection for your personal assets without extra tax liability.
I started out in my basement. You may not need 12 months in the bank, depending on your cash requirements and your spouse's income, if any.
Have a target market in mind. In my case, I had some unique expertise and some recognition in my industry. You can't be all things to all people, so have your prospects in mind before you get started. Be prepared to knock on every door you can think of, and get your references in order.
Profit and loss isn't a problem for most new businesses. Cash flow is the killer. If possible get progress payments - say 25% with the order, 25% on approval of drawings, 35% on shipment, and 15% on completion of commissioning. That may or may not be feasible depending on your target industry, but try for it.
If you are married make sure your spouse understands the risks and problems and is 100% supportive. That will be the biggest factor in success.