I have already advised my readers to prepare an emergency fund for their personal finances and I would like to now add to that by emphasizing the importance of a plan for business monies. Many small business collapse not because of lack of business but because of lack of proper attention to financial matters. One of the most important decisions you could possibly make as a business owner and yet so many people get it wrong.
Right off the top, taxes must be taken and set up into a seperate account for their purpose, if you fail to pay taxes, the I.R.S. will not be pleased and that can lead to a multitude of problems including possible jail time.
Workers must be paid, failure to do so will not only cost you workers but will also affect your businesses reputation.
So, now that the I.R.S. and the workers have been paid, the rest is yours, right? WRONG, you still have to plan for and set money aside for other business expenses, these can range from utilities to internet to cell phone bills, not to mention insurance,office rent, and vehicle expenses if you have any.
Even after covering all expenses you should still be prepared to set aside money for future expansion if you intend to ever be more that just another small business.
With proper financial planning your business will be better prepared for survival. I recommend hiring an accountant if necessary and if not, remember to plan for every expense before it becomes a problem.