If you have decided to take the brave step of starting your own business, it may be both exciting and daunting at the same time. The great part of starting something of your own is that you can build something you believe in and feel fulfilled by. On the other hand, the reality is that running your own business involves taking risks.  Many businesses fail for various reasons, such as lack of proper business planning or management problems. However, an important one has to do with how you plan your finances.
Often, as you start your business, your business becomes part and parcel of your life and becomes intertwined with your personal finances. This may create problems for yourself and your business. Here are some financial planning decisions you should think through as you plan to run your business:-

1) How much personal cash savings do I need?

For most employed people, a general rule of thumb is to have enough bank savings to cover 6 months’ worth of living expenses. This is to cover any unforeseen emergencies, or if you are out of work and need your cash savings to tide yourself over while finding another job. 
For a business owner who is just starting up, the risks are higher. You may overestimate the expected revenues coming in and underestimate the costs. Even if the business may be profitable, the cash flow cycle may be longer than anticipated, with customers taking longer than usual to pay you.
As every business is different, it is difficult to give a guideline of what is sufficient bank savings for a business owner. Since a new business venture may take a couple of years to get established, I would suggest around 12-24 months’ bank savings. More importantly, why not review your personal spending habits and ask yourself you are willing to cut down for the sake of investing towards your business?

2) Should I get funding from the bank?

A useful motto to live by is “Make the banker your servant, but do not be a slave to the bank”. If your business is new, the bank may not approve your loan as you have no track record. And if they do, their terms and interest rates may be demanding. You may find your business serving the bank rather than paying yourself.  The banker becomes your friend when you do not require funding from them. Once your business is profitable, various banks may be knocking at your door offering lines of credit, which is basically a source of funding that is available to you should you choose to draw from it. 

Why get a line of credit when you do not need one? Just like insurance, you never know when you need it and when you do, it might be too late once you do not have it. I remember speaking to a successful business owner who said she regretted not getting credit facilities prior to the 2008 Financial Crisis. While her business survived the recession, you can imagine the anxiety she felt along with other business owners in the early part of the crisis when you have no idea how much revenue you can generate in order to cover your running costs. And because banks are equally panicking, they are not offering funding to businesses. In fact, they may even cut your funding. Therefore, having your lines of credit lined up at least gives you some assurance that you can go through uncertain times unscathed.

3) Should I clear personal credit card debt before starting my business?

Personal credit card debt is the most expensive form of debt because the effective interest rates are 24% per year. This is not inclusive of the late charges (which you also pay interest on when you do not fully pay your credit card bill).
While you may have this great business idea that you are passionate about, a business that is driven by passion but is not anchored on sound business fundamentals is likely to run into trouble quickly.
Your decision to plough money into your business is an investment decision. Like any investment, it involves risk and takes time before you reap the rewards.
It is a choice between the certain high cost of credit card debt versus the potentially rewarding but ultimately uncertain return of investing in a business. I would suggest that eliminating the former first would be better for your personal bottom line in the long run. 
Another quick reason to eliminate credit card debt: If in future, you find yourself applying for a business loan, your personal debts may hinder you from approval.