Chances are, you’re new to business. You’re just starting out—and I just want to pause for a moment and say: Congratulations! Starting something new and putting yourself out there is a huge step. Entrepreneurship has been such an unexpected blessing for me and my family. It’s also been one of the biggest growth journeys I’ve ever experienced. So welcome to the exciting, wild, and sometimes chaotic ride of running your own business!
I want to break down how to set up your finances for success right from the start. Now, if you’re not brand new—don’t worry. If you’ve already started and don’t have all of these things in place yet, it’s okay. Just work through the steps and make sure your business finances are solid moving forward. Trust me—doing it now will save you so much time, stress, and money later on.
Step One: Choose Your Business Structure
Your first step is figuring out what your business structure is going to be. Now, I’m not an attorney, so you may want to consult with one—but typically, the structures I see most often are:
- Sole Proprietor
- LLC (Limited Liability Company)
- S Corp
Here’s a quick breakdown:
- Sole Proprietor: This is just you doing business without any legal separation. It’s the easiest to start, but it also means that all your personal assets are on the line if something goes wrong.
- LLC: This structure provides legal protection. If anything were to happen, only your business assets are at risk—not your personal assets. That’s one big reason many people choose this structure.
- S Corp: This one comes with tax advantages. You can actually run payroll and pay yourself as an employee, which can lead to tax savings.
The reason this matters so much is because your business structure will determine how you pay yourself—so it’s really important to get this clear from the beginning.
Step Two: Set Up Your Bank Accounts
Next, you’ll want to set up your business bank accounts. At the very least, open a separate checking account for your business. Even if you’re a sole proprietor, you still want to keep business and personal finances separate.
If you’re an LLC and you don’t separate your business money from your personal money, you can risk losing that legal protection. So yes, it matters!
I also recommend setting up a savings account for your business. This is especially helpful if you’re planning ahead for future investments, saving for your next hire, or even setting aside money for taxes. Having a savings account makes it so much easier to stay organized and intentional with your money.
Another reason I like having a savings account for your business? It helps you mentally move money out of your day-to-day checking account. You’re less likely to accidentally spend what you’ve intentionally set aside. Many of my clients use their savings account to set aside money for taxes—so they’re not overwhelmed or caught off guard when that tax bill shows up.
So, even though it’s not required, I definitely think having a savings account is a smart move.
If you’ve ever looked into the Profit First method, you’ll know it involves setting up multiple bank accounts to manage things like profit, operating expenses, and taxes. You don’t have to follow it exactly, but it’s worth checking out—especially if you’re just starting out. Implementing it from the beginning can make things much simpler down the road.
Do You Need a Business Credit Card? This is a question I get a lot: “Do I need to open a business credit card?”
The short answer: no, you don’t have to. That’s a personal decision. It really depends on your beliefs about debt and how you feel about using credit. You absolutely can open a business credit card if you want to—but it’s not a requirement. If you do decide to open one, that would be the third type of account to consider (after checking and savings).
Step Three: Choose a Bookkeeping System
The third thing you want to get in place from the beginning is your bookkeeping system.
You’ve probably heard me say this before: it’s okay to use a spreadsheet for a season. But you still need to make a decision early on. Will you use a spreadsheet? Will you invest in software like QuickBooks? Or maybe another platform?
Whatever you choose, the most important thing is this:
Be consistent.
Pick a system—and stick to it. That consistency will save you a ton of stress later, especially when it’s tax time and you’re not scrambling to catch up.
Just know this: you need a system. Without one, it’s too easy to avoid bookkeeping altogether, and that never ends well.
Step Four: Track Your Receipts
You also need a simple system for managing your receipts.
Here are a few quick ideas:
- Create a folder in Google Drive
- Keep a receipts folder on your computer desktop
- Use a feature in QuickBooks to upload and link your receipts directly
Whichever route you take, just make sure you’re actually keeping your receipts. It’s an easy habit to skip—but one that can really come back to bite you later.
A Bank Statement ≠ a Receipt System
Let me be clear: your bank statement is not an acceptable system for tracking receipts. It doesn’t show what you actually spent money on—just that a transaction happened. You need a simple, organized way to track your business expenses so you’re not scrambling through piles of paper when tax time rolls around (or worse—missing important deductions).
That’s why setting up a routine from the start is so important.
Create a Bookkeeping Routine
It’s not just about having a system—it’s about actually using it. I always recommend setting up a regular time to check in with your numbers. Whether that’s a “Finance Friday” or a monthly coffee date with your laptop, it helps you build the habit of staying on top of your bookkeeping.
You might be thinking, “But I barely have any income or expenses right now!”
Totally valid—and honestly, that’s the perfect time to start.
Getting in the habit now means that when your business does grow, you’ll already feel comfortable checking in on your income, expenses, and overall financial health. It builds confidence and gives you a solid foundation.
Understand Your Cash Flow
The next piece to set up is understanding your cash flow—a fancy term that simply means: “What’s left over after money comes in and goes out?”
You want to make sure you have enough cash available when bills are due, when you want to make an investment, or when other costs pop up.
That starts with:
- Listing your expenses
- Knowing when they’ll be due
- Tracking when payments from clients or customers are expected to hit your account
From there, you can build a simple budget so you’re never caught off guard—and you’re never in the red. I know one of the biggest fears for new entrepreneurs is: “Will I even make enough to cover my expenses?” But when you take time to really know your numbers, that fear starts to lose its power.
And Yes—Pay Yourself!
Please, pay yourself from the beginning.
I’ve had clients put it off for months because they were afraid of “doing it wrong.” But one of the biggest reasons you’re in business is to earn an income. Don’t let fear keep you from taking care of yourself.
You’ll need a system based on your business structure—whether that’s drawing money from your business account or running payroll.
But for now, just remember this: Don’t wait. You deserve to be paid.
If you can set up these few things from the beginning—your accounts, your system, your routines—you’ll be in great shape as your business grows. It doesn’t have to be complicated. Just keep it simple, consistent, and doable. You’ve got this.
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