You gotta spend money to make money; we all know this truth. Problem is that when you’re running a small business, money does not grow on trees. As much as you hope that an angel investor will land on your shoulder and help make your dreams come true, it’s not a reasonable expectation. When you’re ready to move from your home office to a leased work space, or you need a new machine, or you have to pay a vendor, it’s so tempting to just reach into your wallet and throw down your personal credit card.
Before you do that, think this through. If you can’t pay your bill off, that debt is YOURS. Just yours. It is not attributed to the business, it’s attributed to your ability or lack thereof to get a loan, or even a new television provider – because yes, they do credit checks before hardwiring your home (does anyone even watch TV anymore? That’s another blog post!).
Evaluate other options before you complete the transaction. If you haven’t already, it’s time to look into a business credit card. Easily keep your business and personal purchases separate – you’ll thank yourself at tax time – and your personal credit remains yours to keep. Always talk to your financial advisor before considering racking up debt to be sure you understand the current rules and regulations of business finance and how your business’ financial situation affects your personal credit.
If you’re a freelancer and money is tight, it may be time to incorporate. By having a business number and all the bells and whistles associated with incorporation, you open your business up to a plethora of funding options like 
government grants in addition to bank loans. You’re also much more attractive to investors because incorporation demonstrates that you’re serious about your career path. Not that freelancers aren’t serious! We love freelancers! We were freelancers once!
But perhaps the best advice we could give is this: evaluate your finances and make sure you’re spending wisely, no matter how you pay up. While you do have to spend money in order to grow your business and remain competitive, it shouldn’t be at the risk of bankruptcy. Sit down with the books and figure out where your money is going versus where it needs to go, and adjust your spending. While you’re at it, ensure you’re making enough money to justify the spending! It might be time to convert your paper filing system to digital and quit buying so much paper and printer ink. Stop or pause a product or service that doesn’t generate income and instead focus on new development – you can always reinstate it later. Be wary of doing something rash to increase business, like offering a huge sale, bundling items, or entering into a partnership just for the sake of making money at the risk of losing all of that newly-earned income as soon as the deal expires.
If you are going to use your personal credit card for business, know the ins and outs of your interest rates, and exactly how missing a monthly payment will effect your credit. And if you’ve already overspent on your personal cards for business, talk to your financial advisor ASAP to find out how you can get back on track.
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