Small business owners often don’t get the credit they deserve for following their dreams. As entrepreneurs, you take on the role of breadwinner for your family along with the many responsibilities of running your business.

Every company you see started with a seed: a dream and a plan. So what made some of those businesses uber-successful and others fail?

The answer isn’t the product or service they provide. There are lots of other companies out there offering the same thing.

To make it year after year, they must have the right financial habits.

From personal determination to business acumen, these are the seven financial habits every small business owner needs to succeed.

7 Tips for Starting up a Business

1. Keep Your Personal and Business Accounts Separate

A mistake commonly seen with small business owners is when they merge their business and personal expenses. While it may sound good in theory to have your company pay for your car, the lines get very blurry when you go to file taxes.

Another reason to keep your accounts separate is to avoid personal liability should anything happen in your business. When you first get started, you may have to take on personal responsibility for loans and leases.

But as soon as your business has its own credit rating, switch these out of your name in case anything ever happens to your company.

In the meantime, if you find yourself short on working capital, find other ways to cover your costs without digging into personal funds. Here are a few options to consider to help boost working capital

2. Use Budgets

Budgeting isn’t just for households. Your business should be creating and sticking to one, too.

With a budget, you can predict what expenses you have coming up. Then, you can analyze your Accounts Receivable to know what you can expect to receive.

If your expenses outweigh your predicted income, you have time to do something about it because you’ve planned ahead.

Keeping an accelerated invoicing company, like Now, on hand makes it easy to get paid for outstanding invoices early. You can sell them your invoices, and they give you the money for working capital, then collect the amount due from the client.

3. Stay Current on Tax Breaks

Tax laws are always changing. As a small business owner, you’re entitled to state and federal tax breaks. As long as you know about them ahead of time, you can prepare your records accordingly.

Small businesses that maximize these breaks with their deductions are more likely to be successful. Your accountant should be able to tell you what you can write off and how to use these breaks to your advantage legally.

4. Pay Your Taxes Regularly

If you’re turning a profit in your business, you’re going to have to pay taxes. You’ll also have taxes on payroll, sales tax, and other money that goes to the government.

Successful business owners are also in the habit of setting aside money to cover their state and federal taxes on time. Since it’s not income, it should be separated from your income budget.

5. Regularly Review Your Finances

Throughout your first year of business, it’s hard to see patterns in your sales and slow periods. But every business has dips and spikes. You can catch these and prepare for them if you review your finances regularly. It also helps later if you need to sell a business to know your numbers and history.

Watch your weekly and monthly financial figures and compare them to the previous year/month/week. This way, you can pinpoint outliers and figure out what’s causing them before it becomes a problem.

This also helps small businesses know how much staff they will need during busy and slow seasons, determine supplies to order, and make other integral decisions.

6. Pay Off Debt Fast

The smartest financial move is to avoid debt altogether, but that’s not always possible. If you have to take out a loan or a business line of credit, tackle it strategically and get it paid off fast.

This keeps your expenses manageable and prevents any hits to your credit score if you miss a payment. It also reduces your debt-to-income ratio, which boosts your credit rating as well.

7. Pay Yourself, Too

As a small business owner, if the business is struggling, it’s tempting to skip paying your own salary for a while. But if you’re truly keeping your business and personal expenses separate, your home debt doesn’t need to suffer, too.

By paying yourself, you know how to budget. You won’t need to borrow from the business accounts when you have to pay your bills.

Pay yourself the same way you pay your other employees, and it makes the process easier and consistent.



The products and services you offer are a big part of your success. But as a small business owner, if your finances are under control, you’re much more likely to continue to grow.

These seven habits are essential as you build and expand your dream into a successful reality!