Small business owners may be talented at the core of their business, but struggle managing the finances. Most often, they are not trained in the finance side of things, and fall prey to some common business hazards.
Talk with other successful businesses; learn how they work.
The philosopher Aristotle had it right—to be a decent person, just find someone else who is admirable and do what he or she does. Talk to business owners that are doing well, discover some of the things they are doing right—or what they did wrong—and incorporate that into your business plan.
Keep business and personal accounts separate.
There is nothing more troubling to your finances than mixing business and leisure. The tax man does not like it either. By having a barrier between your professional life and your home life—even if it is a home business—you keep everything detached.
Establish a firm budget.
Every incredible journey needs a map—and your business is no different. Having a budget is the most important, and often the most neglected, step in establishing a successful operation. If you have trouble making a budget—you may also have trouble keeping one.
Assign someone on your team to bookkeeping; they might even file taxes for you. This does not relinquish you of the responsibility of knowing what is going on with business finances. Delegate the task to someone who is adept at it. This person must be both ethical and responsible.
Do not focus only on tax savings.
At times, small business owners buy things with the sense that they can write it off on their taxes. This can be a difficult path to success—and a huge waste of money. If you actually need a product, do not worry about using reduced taxes as an excuse for the investment. Do not let the tax deduction change your actual cash flow.