As the revenues roll in from your burgeoning small business, it's tempting to use some of that cash to pay down your debts. But should you do that instead of investing the money for the future?

It's a fair question. In fact, Old King Solomon would have a difficult time deciding what to do.

But there is a guiding light out there in the economy that can help you decide -- interest rates. Why should it all come down to interest rates? In our dilemma here, it's a good idea to invest money if you can earn a higher interest rate than you are paying on your loans and debts. For example, if the interest rate on your small business loan is six percent and you invest in a mutual fund that promises a higher return, then your money is working harder and smarter for you as an investment.

That said, there's no guarantee that your mutual fund will even earn four percent next year. Heck, it could lose four percent.

So that's why I favor paying off your debt first. The interest rate fees you kill by paying off the loan alone make that strategy a savvy move. And being debt free is a small business owner's dream.

But I also come down on the side of practicality. If you insist on going the investor route, put the maximum you can in your self-employed retirement plan (SEP). In a word, SEP's are like a "Solo" 401(k) that cater specifically to small business owners and sole proprietors who want to save for retirement on a tax-advantaged basis. Since your retirement plan distributions are tax-deferred and come out of your own pocket as a gross, and not net, amount of your earnings, you'll hardly notice the money is missing.

It's simpy a matter of paying yourself first.

Come to think of it, paying yourself first is a good debt strategy of its own.