Being a small business owner is tough enough without having to worry about money troubles. Unfortunately, financial difficulties are all too common for small businesses—but they don’t have to be. In this blog post, we’ll discuss three of the most common financial mistakes small business owners make and what you can do to avoid them.

Mistake #1: Not Keeping Track of Expenses

One of the most common financial mistakes small business owners make is not keeping track of their expenses. It’s easy to let expenses get away from you when you’re busy running your business, but it’s important to keep a close eye on where your money is going. Tracking your expenses will help you stay on budget and make sure you’re not overspending in any one area. To track your expenses, simply create a spreadsheet or use an app like Xero.

Mistake #2: Not Having a Rainy Day Fund

Another mistake small business owners often make is not having a rainy day fund. A rainy day fund is a savings account that you can dip into in case of an emergency—like if you need to make a last-minute purchase or repair or if you have an unexpected drop in sales. Having a rainy day fund will help you weather any unexpected storms that come your way and keep your business afloat when sales are slow to come in.

Mistake #3: Taking on Too Much Debt

The final mistake we’ll be discussing is taking on too much debt. It’s tempting to finance your start-up with loans or credit cards, but this can quickly become unmanageable and put your business in jeopardy. If possible, try to bootstrap your business and avoid taking on any unnecessary debt. If you do need to take out a loan, be sure to shop around and compare interest rates before making a decision.


Small businesses are the backbone of the economy, but they often face steep challenges—including financial ones. By tracking your expenses, saving to prepare for slow times, and avoiding unnecessary debt, you’ll put yourself in a much better position for long-term success.

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