Business Plan

Ideally, small businesses should have a Line of Credit (LOC) established with a bank to draw on when expenses and income do not match. Employers are required by law to meet payroll (that is, you have to pay employees on payday). Meeting payroll is a key reason to use the LOC. Managing expenses against income is very important and of course you do not want to spend more than you make, but spending more at startup is all right if your projections for income in the future (usually the next two to three years) will cover the startup costs. A budget, business plan, or even sketch made on a napkin in a restaurant is required before you start.