Most startups are financed with the personal funds of their owners. This practice is often the most direct approach to kickstarting their dreams if they are unable to qualify for traditional financing or secure alternative funding. However, as the business grows, small business owners should strive to separate their personal and business finances. Doing this necessary step can prove to be beneficial in several ways. It provides a clear separation for your finances, makes the business look official and professional when dealing with customers and vendors, and it can reduce the likelihood of an IRS audit or having deductions denied by the IRS.