Accounting 101: Personal Budget: before you can determine how much money to take out of your small business, you must first understand how much money you need to cover your personal bills.

November 12, 2012

That statement may seem like a no-brainer, but a surprising number of entrepreneurs don’t stop to figure this out – they just take the money out. They do not consider that they should leave money in the business to make sure it continues and grows.

At the outset you must determine if the cash flow will be enough to continue the business, pay your personal bills and fund your retirement. Most businesses need to keep some money to keep going [inventory / supplies/ opportunities], and if you cannot live on the excess cash available to take out, you need a backup plan or you will be among the statistics of new business failures.

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