7 Essential Strategies That Will Help You Keep the First Million You Make in Your New Business These 7 key steps can help you protect your money -- both your personal funds and your business accounts -- as you launch a new business.

The following excerpt is from Scott Duffy's book Breakthrough. Buy it now from Amazon | Barnes & Noble | iBooks | IndieBound

Based on years of experience training and coaching, I know the number-one mistake entrepreneurs make is mismanaging their money from the start.

Part of the explanation is obvious. I know this sounds basic, but you'd be amazed how many entrepreneurs don't go through the trouble of separating their business accounts from personal accounts. The result can lead to a significant amount of stress for any new business owner or even personal catastrophe.

This doesn't have to happen to you. There are some basic strategies you can apply today to make sure of it.

Create a solid financial model for your business

Determine where your company's cash will come from and what expenses will soak it up. Then estimate how much time the business will need to create enough profit and free cash flow to be self-supporting. Once the business generates enough cash to operate on its own, you can reduce your personal exposure.

Once you've estimated how much money you'll need, cut your revenue projections in half. Then cut them in half again. Then do it one more time, to balance out your natural optimism. Now take the amount of time you think it will take to get started and double it. Building sales and free cash flow always takes longer than most entrepreneurs expect.

These numbers may be hard to digest, but this approach will give you a reasonable sense of what you'll need and how long it will take to get to a place where you no longer have to contribute outside capital to make ends meet.

If you're launching a business that involves personal financial risk, here are a few more things you need to do today.

Determine how much money you're willing to risk

Odds are, much of your business's funding will come from you. Unless you have a track record in business or some very deep-pocketed friends, raising money from investors could be difficult. Will the money on the line be your family's entire nest egg, or just half? Are you going to bootstrap or borrow? Keep a photo of your family nearby when you start writing checks as a reminder that you may be risking their future as well as your own.

Talk everything through with your spouse or significant other

You must do this before jumping in. It's essential that the two of you agree on how much to put on the line. If you don't, that'll create problems down the road that will distract you from your business (and potentially ruin the relationship). You'd do better to risk less and be on the same page than risk more and have your spouse be worried and resentful day after day. You should never go so far on the edge or put yourself at so much risk that if things don't work out, it becomes hard to bounce back.

Open a separate checking account for your business

Every day I have my bookkeeper email me a summary of accounts and the prior day's transactions. I use this daily summary as an easy way for me to review and categorize my finances. That way I won't get caught someday trying to track down a month's or year's worth of individual transactions.

Once you have a sense of the capital needed to move forward, transfer the funds you're willing to lose into that account immediately. If your risk capital is tied up in securities or other investments, sell them and put the proceeds in the business account.

This is your seed money. Once you see it moved from your savings account to an account tied to risk, it becomes real. It focuses your attention. You see what's at stake. You'll thus have a clear financial framework to help you make better decisions and will act more strategically and less impulsively.

What if that business account gets low or runs out? You can increase your risk threshold and put more money in, you can find an investor or partner, or you can sell or close the business. In these early stages, however, what's most important is that by separating your business finances, you'll have created a mechanism whereby you'll be forced to face the facts. You won't accidentally run through your personal finances and allow your spending to spiral out of control.

Keep your credit cards separate

Have one credit card for business expenses and another for personal use. This makes it possible to track and leverage every possible expense for tax purposes. Every expense related to your business should be funded from this account. Don't commingle anything.

Hire a bookkeeper your first day in business

Too often entrepreneurs wait to do this or put it off altogether, but you need someone to track income, expenses, assets and liabilities. Having the correct financial data on hand is important for you, investors, and tax preparers. If you don't set up a system early and review it frequently, you'll spend a tremendous amount of time and energy trying to reconstruct the details behind every transaction that affects your business.

Bringing a professional aboard will have a range of other benefits. Paying attention to your books at this early stage will establish good habits at your company and instill a sense of financial responsibility throughout the organization that may also spill over into your personal accounts.

Have an attorney set your business up by the book

We live in a very litigious society, so you need to protect yourself from liability. Set aside money to create a proper legal entity and get business insurance. Remember, your concern isn't only about the short term; there are larger, long-term issues that you need to consider. Keep in mind, too, that even if this is your venture, it's not just about you. Entrepreneurs get caught up in thinking since the business is theirs, they may be the only ones at risk. But when you bring in investors and other team members, their future is also in your hands.