6 Money Moves You Need to Make Before Starting a Business

Some say that starting a business can be risky. You may have been warned with the ‘50% of all businesses fail’ statement, but there are two sides to everything.

Most businesses that fail are due to financial reasons like the owner running out of money, bein unable to pay employees, or not selling enough product to keep the business afloat.

To avoid these stressful situations, you need to prepare your finances ahead of time. Here are six money moves you need to make before starting a business.

1. Save Up a Big Emergency Fund

Your business is bound to have slow months. There may even be some times where you have to spend more than you’re bringing in. Prepare for having a variable income by saving a large enough emergency fund in advance. How much you save is totally up to you.

You may want keep your business and personal savings separate too. For example, this may mean saving 5 months worth of expenses in an emergency fund and 3 months of business expenses in a separate account.

Calculate all your regular expenses and set aside an amount that makes you feel comfortable.

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2. Pay Off as Much Debt As Possible

When I started my online business, I still had some debt but it was minimal. My goal was to pay off as much debt as possible to minimize my liabilities. Runnin a business requires some investment, especially in the beginning stages.

You may need to obtain a business license, register as an LLC, and purchase other start-up supplies and equipment. It’s best to try to cash flow as many of your business costs as possible but you can’t do this if you’re making a ton of debt payments.

Set up a plan to pay off your debt with the highest interest rate first, then work your way down. Once you pay off a debt, add that money back to your budget or save it instead.

3. Start Selling to Customers and Clients

One of the biggest mistakes I see new business owners make is they get all worked up over having the perfect website, branding, and social media presence.

What they fail to prioritize is finding out if their products or services will actually sell. This should be your top focus before anything. You don’t have to launch a picture-perfect business.

First, identify your clients or customer base and start marketing and selling to them. Get to know their needs and pain points so you can serve up more value. You can do a soft launch of your business or start working with clients on the side of your day job to see how much profit you can bring in.

I didn’t go all in with my business until I was earning more than I was making at my full-time job. That’s when I knew I had a proven concept and clients who would support the success of my business.

5. Talk With a Tax Professional

As a small business owner, you’ll be responsible for paying your own taxes. When I first got started, I didn’t know much about this and when the time came to file my taxes I was super stressed and confused.

Luckily, one of my friends recommended a CPA who specializes in helping freelancers with their taxes. He provides me with professional tax advice, tools and resources to track my income and expenses throughout the year, and he helps estimate my quarterly tax payments.

It’s crucial that you connect with a credible tax professional early on so you can get sound advice about how much you’ll need to set aside for taxes each month, how much you should submit in quarterly tax payments and more. Trust me, when it’s time to file your taxes for the year you’ll be glad you worked with an accountant.

6. Estimate and Track Business Expenses

Another important money move you need to make before starting a business is determining your business budget. Even if you haven’t started your business just yet, it’s important to estimate your costs and develop a business budget.

Jot down one-time start up costs, regular monthly expenses, as well as one-time annual expenses. With my business, I tend to pay for things like bookkeeping and invoicing software, courses and training, social media scheduling programs, email marketing software, and contractors. I try to keep my monthly business expenses below $1,000 but it helps to lay out a realistic budget to help me maintain this.

Estimating and tracking business expenses properly can give you a realistic expectation of how much it’s going to cost to keep your business afloat.


Starting and running a business is hard work, but it’s also very rewarding. Carefully the financial aspect of operating a business before you start and do everything you can to improve and prepare your finances.

Pick one thing from this list to focus on at a time and start with what’s most important to you.