One of the main reasons for taking the time to set up your business is to protect yourself from legal liability and to make sure that your company can easily comply with tax regulations. Keeping separate finances for your business and personal life is essential to your success.

For me, part of the fun of owning my own business is being able to understand exactly how much money I am making and what I am spending, so I prefer to do my own bookkeeping. The good news is, you don’t need to have a masters in business (or even a business degree) to do your own books!

Although it is not glamorous, it is important to set up the legal structure of your business as one of the initial steps. The legal structure of your business creates a clear distinction between you as an individual and your business and offers you protection. The structure you choose will affect the way you interact with financial institutions, how you are taxed, what types of forms you should fill out for government use and your personal liability as a business owner.

Understanding financial terminology and being able to interpret simple financial statements is key to a healthy small business. I am not advocating that you take on the tax filing, but being able to read your financials will allow you to make sound financial decisions and determine which parts of your business might need attention.

Insurance for your business can seem like an added expense that is not necessary when you’re just getting started with your business, but that could not be further from the truth. One of the main goals you should have for yourself as a business owner is protecting yourself and your family from potential liability. I am a firm believer that all businesses (and individuals, honestly) should be insured to the maximum extent that is recommended.