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If you intermingle your business money and your personal money, my strong recommendation is that you stop that, starting now. It may seem like a solution to a temporary cashflow bump, but it is a recipe for making things difficult in the future.

Someone has to untangle that mess at some point – either you, trying to figure out how you actually spent; or your accountant, trying to prepare accurate business accounts; or the IRD, figuring out the penalty you owe for deducting personal expenses from gross business income.

If you want to sort out the money in your business, having a separate bank account for your business (no matter how small it is) is a great first step.

But because money flows between your personal and business bank accounts, I also recommend that before you sort out your business money, you begin by taking a look at your personal money situation

There’ll be a lot of looking at business money in the next few weeks. Budgets will be set for the 2022-23 financial year. Income and profit goals will be put in place.

Much of this planning is a shot in the dark You make your best, most educated guess, and then deal with all the unforeseen things that happen. Unless your planning numbers are based on something concrete, it can be easy to dismiss them when faced with reality

One way to base them on something concrete is to be clear about how much money you need for your personal expenses.

How are you, as an individual, (or as a family) doing financially? Do you need more money to live the way you want to? How much more? Would it be helpful to have a lump sum from the business to put into savings for periodic expenses? Or do you just need precise information about how much more money is needed to be invested in the business from your personal accounts?

Getting clear on the financial result you need personally from your business is like getting clear on you “why” for being in business. All the noise dies down and you can focus on the key metrics.

The profit you need to make is not an arbitrary figure, but an amount that would have a demonstrable impact on how you live your life.

Begin at the end. Remember, it’s not just business. It’s personal, too.