I have been talking to many businessmen and find that their mistakes are common. Here are my comments..

1. Don’t manipulate your children to join your business! Many of them tell me that their children “choose” to join them in their business. Of course they will. If they get a job outside the family business they may get a job paying say Rs. 6L a year. In the family business there could be hidden under employment. Unless they have a specific task or a separate business you will never ever know whether they are learning or benefiting by this top level entry.
2. Find a good personal finance adviser – I do not think I have to say  more! However, many IFA may not understand the implication of business, taxation, planning etc. In fact most of them are just product pushers – and that too products that they want to sell, so be damn damn careful.
3. When you meet an IFA be sure that you open 3 accounts – a liquid fund, an ultrashort bond fund, and a Retirement fund. The retirement fund will keep you focused. You will suddenly realize that you need Rs. 50 crores – about 30 years from now and can be achieved ONLY with regular, disciplined, investing habit.
4. Take adequate medical insurance cover – again get a good agent as the first step. Most people pay too high a premium for medical cover because the agent does not tell you the whole picture. I know doctors who “assume” that they know “medical insurance” and are paying a stupidly high premium. Make sure that you get a good experienced agent (broker) who will explain medica insurance, co-pay, top-up, and super top up. I have all of this in my insurance, but it was explained by a person who is not my agent. My agent is good enough to do transaction processing.
5. Diversify your investments – I see many businessmen who keep fooling themselves that they will “soon” split the family wealth. None of them do, till they die! Well even if you do not split, at least ensure that you remove money from the family business and keep some money outside your business. Recently I have seen business families in automobile, chemical and real estate business going through serious cash flow issues. Diversification is the only free lunch in the financial space.
6. When I said open a liquid fund, a ultra short bond fund – these are the places where you will keep your “emergency” money as well as a safety net. Get your wife to withdraw money from the liquid fund for all her expenses, payment of bills, etc. Fund this account by taking a salary from your business. Recently I saw a promoter being removed from his own start up – and he had not taken salary for a long time! That hurts badly.
7. Keep your business and personal finance separate. It does not require a PhD in finance to tell you that if you mix the two, you will never know whether you are earning enough. I know one woman who quit a Rs. 1L per month paying job to join her husband in his business. She put a condition that her husband will draw a salary of Rs. 3L (his last drawn salary was paying about Rs. 5L), pay her a salary of Rs. 1L (her last drawn salary) for her to quit her job. She needed the Rs. 3L to pay the school fees, vacations, family weddings and gifts- and other day to day living. I liked the idea because it forced him to remove Rs. 4L from his business regularly. She gave him a 6 month moratorium and a 90 day credit period – he could delay these payments by a max period of 3 months! Makes sense.
8. Get good professional help – Ifa, CA, lawyer, employee accountant. Not keeping proper records can create HUGE finance issues later on. This should perhaps be done much before you start your business You need your “A” team for your business finance and personal finance in place. ASAP.
9. Automate your payments – utility, insurance, investments, etc. and make sure that your Wife handles this. This will ensure that she is updated on the password and she will learn how to do it in your absence -from the house if on a business trip or from the world if God has other plans.
10. Keep your expenses low – First class train travel is still cheaper than Uber. Use public transport when appropriate. Eat at home far more than eating out. As a start up you need to keep your cash flow intact, and create a good impression. I would hate to fund a start up if I see the founders buying expensive toys – cars, etc. and talking to me about moving into a new US $ 20Million house! Hey wait till you are generating cash and have a surplus. Sorry I don’t understand today’s valuation!
11. Keep a budget – and make sure it works. Get a friend to audit it regularly. Worth every penny of paying your friend some money to get this audit done. Remember you are the boss and NOBODY wants to tell you the truth.
12. Track your credit card and your rating score.
13. Plan your succession well – and remember to write your will.

this is a baker’s dozen !!