Financing Basics | Estimating
Costs | Finding Capital | Personal
vs. Business| Applying for Small Business Loan
| Small Business Lenders |
Cash Management | Startup Costs |
Breakeven Analysis | Financial Statements
Personal vs. Business
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:
For Additional Information:
What is Credit Scoring?
Fair Credit Reporting
Federal Trade Commission