Financial Tips for Starting a Business
You’ve got ideas, you’ve made a plan, and you’re ready to get your dream rolling. Nothing is standing in your way–except, perhaps, those financial details, which can be a little tricky to navigate. How can you ensure your new business will be financially secure? How do you get started without losing your entrepreneurial momentum in a lot of confusing paperwork?
The following to-do’s will help you make sure you’re starting your business on the right financial footing.
Securing Funding
After gathering your own funds, also known as “bootstrapping,” you may still find yourself in need of capital to get your business going. Some entrepreneurs are fortunate enough to secure gifts or loans from family, friends, or other investors. You may also consider applying for a small business loan at a local bank that supports economic growth in its community. For best results in securing a loan, make an appointment with your bank after drawing up a detailed business plan so you can envision reaching your financial goals together.
Plan on Getting a Separate Business Account
Whether you are planning on operating as a sole proprietor, LLC, or other business structure, you should keep your personal and business accounts separate. If you are going to take business deductions, you must have a dedicated business account, by requirement of the IRS, when filing your taxes. Notwithstanding tax concerns, it’s also simply easier to track and manage your finances if you aren’t commingling your funds.
Get an EIN (Employer Identification Number)
Think of an EIN as a social security number for your business. You will use this number on any business permits, licenses, or tax returns that identify your business. If you hire anyone to do work for your business, you also must use an EIN. Most importantly, you will need this number in order to open a business account at your bank, so it’s important that you apply for an EIN first and give the IRS a couple of weeks to get you squared away.
Type of Bank Accounts
Like personal banking, business banking can involve a number of accounts, such as checking, savings, debit cards, and credit cards. These options can help your business by providing protection, increasing purchasing power, and establishing credit. Additionally, a merchant services account allows you to accept credit and debit card transactions from your customers.
While your personal bank may offer the business account services you need, you should still shop around to find the best options. The Small Business Administration suggests keeping the following in mind when doing your business banking research:
- Introductory offers
- Interest rates for savings and checking
- Interest rates for lines of credit
- Transaction fees
- Early termination fees
- Minimum account balance fees
Your One Stop Shop
If you’ve got a dream and a plan, we’re ready to dream with you. First National Bank of Sycamore can help you every step of the way! To get started with your business finances, schedule an appointment. We’ll be happy to meet with you.
