Four bank accounts to keep while running a small business


  1. Operating expenses.
    • Money from customers. The main account.
    • Donald Miller likes to keep this around $100,000. Payroll pushes it down to $20,000, but then it builds back up.
  2. Profit Account.
    • Donald Miller says he uses this as a safety net for operating expenses, but Profit First from Mike Michalowitz says never to touch this to cover expenses.
  3. Tax Account.
    • Money that goes to the government.
    • Tax and profit is 50/50.
    • Tax doesn’t become a surprise at the end of the year.
  4. Personal Checking account.
    • Give yourself a salary so you live off of your own payroll.
    • If you own the business, the profit money is also yours.

Your business exists so that you can make money to buy investments that also make you money.