Running a home-based business can be very rewarding. Running the finances for your business can be complicated, though, according to entrepreneur Corey Shader.
To make your life easier, it’s very important to open a dedicated bank account for your home-based business. It’s always smart to separate your personal finances from your professional finances, for many reasons.
Below are some of the main benefits of having a dedicated bank account for your home-based business.
Most people form a Limited Liability Company (LLC) for their home-based business, which is the simplest way to protect any personal liability they might have in the business. Forming the LLC is the first step in this process. Separating business finances is the second, and equally important, step.
If you don’t separate your personal finances from business finances, you could be on the hook personally for any business debts you incur. When you have a separate bank account for your home-based business, you’re actively protecting your personal assets.
Makes Record-Keeping Easier
Record keeping can be a very time-consuming process. If you have to wade through all of your transactions to determine which ones are personal and which are professional, it can be even more difficult.
You should always be able to run quick, efficient and accurate reports of your business finances any time you need them. This allows you to monitor your progress over time and always have a solid idea of where you currently stand. Having a dedicated bank account will allow you to do this.
It’s very important to establish credibility among customers and clients, but it can be a challenge when you run a home-based business. Opening a dedicated bank account is a simple yet effective way to establish this necessary credibility.
If you pay vendors with one of your personal checks or ask clients to write a check to your name, it looks more like you’re an amateur operation than a professional one. While this may not result in you actually losing business, it certainly may put a question in some people’s minds.
You can erase any suspicion and negative thoughts they might have by opening a bank account dedicated to your home-based business.
Your home-based business might start out as a small operation but grow big — and fast. If you start on the right path from the start, with a dedicated business bank account, you’ll be enabling this expansion to happen easier.
Corey Shader says that, for one, it will begin to establish a professional relationship with your local bank. This could help down the road if you ever want to apply for a loan to grow your business even further.
Having this dedicated bank account will also make accounting processes simpler as you expand. It’ll make setting processes in motion such as payroll, taxes and employee benefits so much easier.
Plus, you’ll put yourself in better position to attract investors or partners if you ever want to take on extra help.
About Corey Shader
Corey Shader is a self-made entrepreneur, consultant, investor, real estate developer, and founder of several companies, notably Insurance Pipeline. Operating primarily out of Ft. Lauderdale, Corey’s endeavors span across the nation, consulting for start-ups, and sitting on the board of digital media and senior healthcare agencies. As a consultant, Corey helps young businesses develop sales funnels and maximize profitability. Shader takes pride in challenging others to push themselves to be their very best — he believes in constant self-improvement, inspiring others through sharing his own life experiences.