Small Business Financing
Small business owners and start-ups encounter a lot of the same problems when it comes to running their business. Finding funds to get started and then thrive isn’t always easy. 
Personal finances and business finances begin to intermingle. Some, in fact many, are turning to credit cards in the hopes that their business will be successful – and they can pay off the debt accrued in a relatively short period of time.
This isn’t always the case as some businesses won’t make it and some won’t be as successful as anticipated.
If you’re struggling with managing the grey area in between your small business and personal finances, there are a few steps you can take to make things easier.
Credit: Asset or Liability?
Your personal credit history and score will either be an asset or a liability; there is no neutral ground here. Getting a loan or business card are often dependent on the credit of the person looking to locate new funds. This sparks one area where some find difficulty in distinguishing finances – how you choose to use and establish credit.
When they are starting up, many small business owners often use their personal credit and finances to get the business going. However, you should establish a credit history by putting expenses (such as a business phone line) in their business name and using a commercial bank account to pay their bills. You want to begin establishing good business credit and a history as soon as possible.
Recordkeeping: Real Results
Unless you have separate credit cards – one for business and one for personal use – you will need to brush up on your recordkeeping skills. You don’t want to look down at receipts at the end of the month and wonder whether or not you were spending for lunch on a client or your friends.
If you’re supporting your small business with personal credit or funds, make sure you are keeping records of both your personal expenses and your business ones so that as tax season comes around, you are able to write off every charge possible without worrying about a miscellaneous receipt.
If you’re confused about what is considered a personal expense and what is a business expense, talk to your accountant or read this helpful guide from the IRS.
Payroll: Processing Properly
Especially when you are self-employed, figuring out payroll, reimbursements, taxes and more can be challenging. The lines blur with respect to reimbursement, especially when your personal finances launched the business. Different online payroll solutions, some of which are free or low-cost, can help break things down.
An IRS-approved payroll solution or services provider can help you determine how much you and your employees should be getting paid and reimbursed, without draining the business budget.
In a payroll outsourcing article from ResourceNation, they share tips on determining how much your business should be outsourcing. Not every business has the same needs, but in order to ensure your business processes payroll accurately, consider outsourcing key aspects of your business accounting if you can’t manage it yourself.
Balancing budgets in our personal lives isn’t always the easiest, or most fun, thing to do.The same goes for small businesses. Small business owners are often stuck in a gray area when managing their personal finances and those of their business.
By paying attention to their credit file and history, keeping their records up-to-date, and processing payroll accurately, whether in-house or through a service provider, small businesses can avoid the shades of grey they’re encountering. Personal finances and business finances aren’t always black and white, but taking these three steps can help reduce the blur.
About guest post author:
Erica Bell, a copywriter and social media specialist for Business.com Media, Inc.,covers a range of small business topics including credit, funding and social trends.