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Opening up a business bank account does not have to be stressful. In this video, I walk you through how to set up your business for success by separating your business and personal finances.
File for your business license
Depending on your state, there are different types of documents you need in order to set up your business bank account. It’s important to consider what type of business you want to create. Based on your business structure, this will factor in how much taxes you have to payout. Separating your business finances from your personal finances will save you money in the long run. Plus, it’s really going to stress you out less! Typically, you can search for your state or county website for the documentation that you will need to file for your business license. Make sure to avoid paying extra, I just sent my check of $50 in the mail with the documents and it saved me a ton of money rather than paying for a middle man.
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File for your EIN
In addition to your business documents, you’ll need to obtain an employer identification number, also known as an EIN. This is one of the documents you need to give to the bank so they can set you up in a business account. Make sure you do this around the same time that you file to create your business. Have a filing system that will help you organize your business documents so you won’t stress over where all of the important information is.
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Search for a Low Fee Business Bank Account
I opted to select a local credit union. It was only $15 to open both my savings and business bank account. It was incredibly easy and saved me the hassle of having to worry about having extra fees coming out. Ask the bank staff to direct you to the main person who handles business accounts and they should be able to help you out. Another great point is to ask if they have a co-op with other credit unions. This will mean you can conduct business and transactions at those banks as well.
Consider Opening Multiple Different Accounts
Once you have the handle on opening your business bank account, consider opening both a business checking, savings, and other accounts to help you get started with trying to use the Profit First Method. This method is a way in which to organize your business expenses, profit, income, and taxes in a way that won’t completely drain you of all of your business finances. I loved the book “Profit First” by Mike Michaelowicz. He’s an entrepreneur that sold multiple businesses and made millions, yet he nearly lost it all when he increased his spending so drastically, that he couldn’t afford Christmas presents for his kids. I recommend reading his book, “Profit First” to help you better understand how to apply this method to your business and finances.
Read my full podcast episode and blog post about Profit First.
In short, building up your finances and separating them will help save you time, money, and energy. Having a separate bank account will also help you build momentum in your business, gain enough money to pay your bills, and create additional ways for you to support your family. It’s important to know that your income as a business owner might fluctuate, so having a plan for your finances will sincerely help to increase the opportunities you have to finance your lifestyle.