During the exciting early stages of starting a business it is easy to overlook several small details that could make or break a young business.

First, do not blindly trust customers and partners as extending credit unwisely could turn into a collections nightmare. While a level of trust is needed, it is acceptable and smart to run a credit check when negotiating a contract, asking for a deposit upfront, and establishing a line of credit with your bank as a precaution.

Make sure to keep neat books and to file everything that needs to be filed with the IRS, such as payroll taxes and estimated business taxes. Keep employee withholding taxes in a separate account, and understand the difference between an employee and an independent contractor; confusing the two can lead to financial and legal trouble.

Many businesses need expensive equipment to get started, and a good way to save is to depreciate the equipment as it ages. While doing so will not create profit, depreciation can help business owners prepare for future capital outlays. Whether your business is in retail or not, create a business plan like a retail business would, thinking ahead several seasons to predict where your company will be in the business cycle and whether you will need additional resources.

Keep your business and personal finances separate, and have a plan in place for how you will borrow money when you need to and how you will pay it off. Keep organized books that track when you buy, when you sell, and when you get paid as they are three different categories with different meanings.

Encourage customers to pay early with discounts for advance payment, and have a charge to discourage late payments. Follow all IRS filing deadlines even if you cannot pay the amount due as it is far better to apply for installment payments than to face penalties. Purchase insurance to protect your business in the event on an emergency, including business interruption insurance and property coverage.

"Cashflow: Guarding the Green" Smart Business Ideas (05/08) Vol. 4, No. 5, P. 28; Stettner, Morey