JJ Montanaro, CFP^®, USAA | Date published: May 26, 2021. | 4.5 to 5 Minutes

Are you starting your own business? Here are six points to consider for any small-business owner or entrepreneur.

Owning your own business can be one of the best or worst decisions you’ll make. There’s a lot to consider before jumping in. Take it from me: Those considerations will make a big difference between, not just success and failure, but loving or hating it.

Owning a small business has worked for a good portion of the 95 million business owners in the U.S. Many military spouses or veterans embrace the opportunity to start their own businesses. Some small businesses offer mobility, portability and flexibility that is ideal for the military spouse or the veteran looking for independence.

With that in mind, here are six points to consider as you start your journey to becoming a successful small business owner or entrepreneur.

Ask for help.

Know your strengths and weaknesses. Consider building a team of advisors. Get help from experts and have a plan to keep your business on the right path. The U.S. Small Business Administration offers helpful articles and a business planning template. Get input from a lawyer, accountant and financial advisor. They can provide valuable advice as you start your business and throughout your journey.

Pick the right entity and insurance.

Most businesses start as sole proprietorships, but from tax and liability standpoints, there could be better ways to organize. Because many people are quick to sue, limiting your liability should also be a priority. For me, this meant getting a business owner’s policy. Yes, it was another expense, but it provided protection and coverage for my business-related property and activities. This is a great discussion to have with your new team of advisors.

Keep business cash in the bank and don’t forget Uncle Sam.

Businesses, especially new ones, may experience cash-flow fluctuations. When times are good, build some savings, and make those estimated tax payments to protect your personal finances when cash flow is low. There were a couple of years where I underpaid my estimated taxes. Don’t make the same mistake. I still get flashbacks from my time as a business owner when April 15 rolls around.

Take advantage of expanded retirement options.

A small business offers many easy ways to save on taxes and expand your retirement savings — from Simplified Employee Pension plans to 401(k)s. I say “expand” because hopefully, your family is already taking advantage of individual IRAs, as well as a 401(k) or the military’s Thrift Savings Plan.

Don’t start with bad debt.

Some entrepreneurs get so excited about their new business idea that they can’t wait to get started. Enthusiasm is good, but patience is better. Avoid piling up credit card or other high-interest debt to finance the business. A better plan would be saving up enough money to start on the right foot, taking advantage of available grants or even exploring outside funding sources.

Stop mixing your business and personal finances ASAP.

If you do have to start your business with your own money, you’ll want to prioritize putting a wall between your personal and business finances.

Ideally, your business will pay you back and provide an income, so you no longer have to mix personal and business finances. Keeping a separate bank account for your business and detailed accounting of all business-related expenses will provide a clear vision of how things are going and will simplify things at tax time.

One rule I heard (and ignored) a lot was to spend your time where it truly matters. I hope these tips help you do just that. Get ready, be patient and good luck!