Personal vs. Business Finances Starting up a business can be a tremendous strain on your personal finances. It can take six months or more before your new venture is profitable and can provide financial support for you and your family. Before going into business it is always wise to get your finances in order.
Write a monthly household budget that accounts for your income and your household expenses. Be as conservative as possible, because it is vital to your success that you have the resources to maintain your household expenses while your business is growing. Any strain on your personal budget will put the financial success of your business at risk.
It is also a good idea to check your personal credit situation. Too often, entrepreneurs think that their business credit and personal credit are separate. A business' credit is built upon the owner's personal credit. Because you have not established a business credit history, lenders and suppliers will use your personal credit history to determine your terms of credit.
Your credit report determines how you will be perceived by potential lenders and suppliers. You should know what appears on your credit report because you may find errors that you will want to have corrected. To get a copy of your credit report, refer to one of the three major credit bureaus:
Equifax Experian Trans Union
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Start Your Business
(Visit Start Your's Website)
Starting a business requires you to
complete a number of steps and make some
key decisions. Though part of your overall
plan, you’ll need to select a location,
decide on a business structure, and obtain
the necessary licenses and permits. In
addition, determining which financing
options will meet your short-term needs
and long-term goals is crucial. Within
this section, we’ll provide information on
these topics along with guidance on buying
an existing business, copyright and
trademark issues, and getting support from
an outside expert.
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