- 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.
- 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.
- 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.
- 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.