Spending money is an interesting thing – it can help against stress, but then again, it can get you into a lot of trouble. Trouble in the sense that you may find you’ve spent too much and aren’t really able to continue without taking a loan for an example.

As it happens, there’s a difference between spending and spending. Whilst one is an excess spending, i.e. on something you really don’t need, the other is for keeping your business going. 

First off think of how much you’re really earning regularly. Try to be as pessimistic as possible in assessing the amount. Then calculate how much money you need to keep your business running, i.e. buying materials, goods and related services. In addition take into account amounts you pay as taxes, for payroll and so on.

All of this would be called “spending to keep your business going”. What’s left is or can be used for the other type of spending, but do keep in mind that saving up is as important in running a business as it is in your personal life.

One month may have been exceptionally good but you should never start spending and especially taking regular commitments based on that month when it comes to available cash.