Face it, you are not preparing to operate a corporate lemonade stand! You need to set up a business bank account in order to operate as a legitimate business.  Setting up a business bank account is the final step towards forming a barrier between you and your business’s liabilities. In addition to protection, you need a business account to satisfy other facets of your new business. Purchases must be made from a business bank account in order to track expenses and file taxes correctly.  All businesses must keep a record of their expenses. It is easier to stay organized if all expenses are made through one account.

      You want the business’s paper trail to consist of only business receipts. You do not want to sort out personal expenses come tax season. This all relates back to maintaining a legal degree of separation. You are always allowed to deposit money into the business account from your personal resources. You are the majority shareholder, thus funding is ultimately your responsibility. It is considered investing into the business.  I cannot stress how important it is to make all business purchases on your business account. Purchasing business related items directly from your pocket will make things very complicated when filing taxes with the IRS.

       Having a business bank account legitimizes your business to prospective clients. It instills a sense of confidence in their payments to your corporation. It is hard to establish immediate credibility as a new business. Having a business account dramatically increases your credibility to prospective wholesalers and clients.

Setting up a business bank account is also a pain free process.

• First things first, make sure you have paper copies of your company’s business paperwork: This includes your Certificate of Status, Certified Copy, and Employer Identification Number.  The bank will ask to see all of these before setting up an account.
• You want to set up a Business Checking Account.
• Research which bank provides you and your business the best benefits with the lowest fees. Do not skip this IMPORTANT step because you are too lazy to travel to more than one bank.  Additionally, most of the account information is online. Not doing this may result in various hidden fees that could subject your business to unnecessary expenses.  For example, some banks limit the number of transactions allowed per month.  If you go over this set amount you will incur penalties.  Use caution when selecting the right bank.
• You want to look for banks that do not require initial minimum balances.  Good banks understand that you are starting a business from scratch.  They will give you a year long grace period to accumulate funds.  Then, after a year, a minimum balance will be required. If you don’t have the minimum amount, small fees are charged.  Keep in mind that a year is standard.
• You want a bank that provides your company’s first round of checks for free.  It is all about maintaining low expenses during the startup phase. Do not venture far from the value perspective you are taking to your website. It needs to be clear which banking institution adds the most value to your customer experience.
• Look for the best interest rate. Today, all rates are low, but try to find the bank with the best dividend return rate. Due to initially low balances in your account, focus on the other benefits you are looking for. Eventually, after making profits you will want to seek the greatest returns on these investments. This will all be clarified in our advanced section.
• Finally, if you decide to go with your personal bank, be sure to take advantage of extra features offered to business accounts. Many banks will give your personal accounts extra benefits such as eliminating overdraft charges if you set up your business account with them.

       Once you have found your bank of choice, the actual “setting up” process is very easy. The bank representative does all the work. Walk in with your required documentation and ask to set up a business checking account.  They will sit you down and discuss all of the logistics. You will probably have to deposit $100 to open the account. An initial deposit is an industry standard; so do not fret over this.

       The representative will then order your business checks. Take time choosing your design, because it will be a direct representation of your company. You do not want flowers on your checks unless you are in the floral business.  The best checks appear clean and professional.  Also, you will receive business debit cards.  Personally, I found this to be one of the coolest experiences of the early incorporation process.  Seeing my company and name on a business check card was an incredibly empowering experience. The business check card represented a tangible step I was taking towards accomplishing my business goals. My business plans were no longer confined to just talk. Somehow that card solidified it. I realize that it may seem weird to hear this now, but wait until you see that card with your company and name on it!

        After you present the required information, your banker will handle the rest.  Now, go out and start your business!  Start generating money! Build up a solid bank account!  Most importantly, have fun while doing it!

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