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:
Equifax
Experian
Trans
Union
For Additional Information:
What
is Credit Scoring?
Fair
Credit Reporting
Federal
Trade Commission Consumer Protection
Fair
Isaac FICO Scoring |