Many entrepreneurs want to jump into starting their own firm before taking the time to complete the proper financial planning and funding processes. What often ends up happening in these situations, is the entrepreneur combines his or her personal and business finances into one group, which could be a huge mistake. Entrepreneurs need to be sure to separate the money they are using for their business and their personal funds; failing to do so could lead to a number of complications. Starting a business means treating it like it is completely separate from one's personal life. 

"That starts with tracking your business expenses separately from your personal, even though initially it may feel like they are one in the same if you are a one-man shop," Cynthia Heil, a certified financial planner with Cascade Financial Management, told Entrepreneur magazine.

It may take some time to delineate the line of business and personal expenses, but it is well worth it. Here are a list of things entrepreneurs can do to make sure their business and personal finances remain separate.

Make a business entity official
There are many entrepreneurs that run a business, but it is not official. This can make it difficult to keep business and personal finances separate. Entrepreneurs should seek advice from CPA, financial planning and insurance agents to determine if they should make their business a limited liability company or an S Corp. Making this choice is important for entrepreneurs who want to protect their personal finances in the case of potential lawsuits.

Apply for business credit cards
Entrepreneurs who believe they can come across lending opportunities that allow them to finance their business may be sadly mistaken. Nonetheless, they still need working capital for their firm. This is why they should apply for business credit cards, which can act like a checking account and can give them some help when it comes to recordkeeping. Knowing how much money entrepreneurs have available can help them when it comes to financial forecasting.  

Open a business checking account
One of the first things entrepreneurs should do when starting their business is open a separate business checking account. Having a business checking account can help entrepreneurs see where they are spending their money, which can give them some guidance when they are planning out their short-term and long-term financial goals.

"If there's ever a question as to whether it's a hobby or a business, the IRS looks to see if you have a separate checking account," Richard Salmen, a certified financial planner with GTRUST Financial Partners, told the magazine.

Setting aside time to properly develop a sound financial strategy that creates a line in the sand between personal and business financial matters is key to running a successful small business.

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