I have two very simple rules when it comes to managing my business finances. These rules keep my disappointment and mistakes to a minimum.
First, always err on the conservative side when forecasting income. In other words, be pessimistic about how much money you hope to make.
Second, always err on the liberal side when forecasting expenses. In other words, expect things to cost more than usual.
These rules help me reduce expenses and live within my means. A business that bleeds is a business that dies.