Do You Really Need a Business Bank Account?
There is one thing that I see business owners overlook time and time again. And this one thing can really bite you in the ass at the worst possible moment. It won’t be today, or tomorrow… It will be that week (or month) where everything seems to be going wrong. You will be totally overloaded with deadlines and scrambling to get all of your ducks in a row. A real shit storm, know what I mean?
Luckily I can offer you a very easy and virtually pain free solution that you could get started right from the comfort of your own couch. It does require a small monthly investment but the benefits greatly outweigh the costs.
Go open a separate bank account for your business transactions.
Whoa, there I said it. I’m totally serious. It is such a small thing that has big implications. You NEED a separate bank account for all your business activities and this includes PayPal.
You may think:
- It is no big deal
- that you’re not making enough money
- You don’t want the bank fees
- Or you don’t want the hassle of having to shift the money around between accounts
I’m here to tell you it is a big deal! Not life or death, but definitely Tax man serious. We all know Tax man is very serious.
Here are 4 reasons why you really should open up a new bank account:
- It establishes your business as a separate entity. This means that you are not just engaged in a hobby. I’m not going to bore you with all the accounting principles here but if you were interested here’s the link regarding the Business Entity Principle.
- Comingling, (treating your business’ money the same as your personal amounts) leads to greater liability for you the business owner if you were to ever come under investigation/audit. Read: You need to protect your personal assets! Now, isn’t that effing scary!?
- It saves massive amounts of time and energy. You (or your bookkeeper) will now be able to quickly determine and enter your business expenses without the confusion of having to separate personal amounts from several sources.
- Vendors will often require this before engaging in business for you. Which also includes merchant accounts, (how you accept payments from customers).
Ooohh is that resistance? It’s so palpable I swear I can feel it. The thing about resistance is that it all comes down to fear. But you’re not going give in to fear are you? You are a successful entrepreneur building the life of your dreams. And more importantly all successful businesses do this one simple thing.
Now let’s work through those pesky objections:
- The fees…..are a business deduction and are a normal part of doing business.
- I don’t make that much money…..but you will so do it!
- I don’t know which bank to use…doesn’t matter, go to the place that is either nearest to you for convenience or has an amazing bank manager that you can develop a relationship with.
- All the money is coming from me right now…. That is fine. It’s also perfectly normal when you are starting out. This is called Owner’s Equity. What you invest now you will reap later in profit.
Convinced? Good, now all you have to do is open that account! First step hit up our best friend Google and do a quick search on business bank said accounts. When you find the one that speaks to you book an appointment …online. Next step, go to your appointment and find out how amazingly empowering it will feel to open that account. It’s almost like saying to the world, “Hey, I’m open for business, you can pay me and I will deliver to you my most awesome and amazing product.” Yup just like that.