Managing finances can be a challenge for small business owners. You might be an expert in making your product or providing a service, but managing your business finances is a significant part of small business success. So, if you don't have a lot of experience with managing business finances, it can feel overwhelming and easy to slip into bad financial decisions that could harm your business.
Not separating your personal and business bank accounts can cause a ripple effect throughout your financial future. Separate accounts can make it easier for accounting, budgeting, and reconciling your books and help you avoid financial headaches.
Optimism is a great trait to have, but in business, so is realism. Starting our business with adequate operating cash is critical, as is maintaining cash reserves along the way. Doing so can be the difference between business survival or needing to shutter your business if something unexpected comes up (which might be totally out of your control, i.e., COVID-19). Don't fool yourself with wishful thinking that the money will somehow be there!
Some small business owners use credit cards to survive the early stages of business. But credit cards carry high-interest charges and annual fees, so it’s essential to be intentional when using them. Small business loans or using your own capital can save you from getting over your head in credit card debt.
It’s common for small business owners to roll all profits back into the business, especially in the early stages. However, not compensating yourself along the way could harm your personal finances and financial good standing, so make sure you plan for your compensation before it gets to that point.
From the loans to get your business off the ground to the tools to keep you moving, First Independent Bank is here for you every step of the way.