Tuesday, August 9, 2011

STEP 8 of 10: Developing Your Financial Plans – Get Over The Notion That Artists Have To Starve!

One of the most important things you'll want to do when starting a business is to separate your personal finances from your businesses finances. To do this you will need to open an additional checking and savings account, not just another personal account. You'll want to use your DBA and TIN.
Having separate business accounts will allow you to:

  • Monitor Your Progress
  • Pay Taxes Easily
  • Show Professionalism
Follow these steps when setting up a business account:

  1. REGISTER THE NAME OF THE BUSINESS AND APPLY FOR A TAX ID NUMBER: See Step 4: Register A Business Name (DBA) and Step 5: Get A Tax ID Number (TIN aka EIN).
  2. COMPARE BANKING SERVICES: Most banks and credit unions offer free checking and savings accounts (with a max on the number of transactions) however, as a Sole Proprietor your not likely going to max out on the allotted number of deposits and withdrawals.
  3. PRESENT PROPER DOCUMENTATION: All signers on new accounts have to go through identity verification as part of the U.S. Patriot Act, but the documents you will need to sign will depend on the type of business you own. Check online to see what your bank requires.

MY THOUGHTS: "Credit Unions are not-for-profit organizations offering a wide array of financial services and they are owned by their membership. If you have an account with a credit union, you are a member and an owner. I have been with a credit union for several years now and am not likely to use bank services again. Just make sure to find a credit union that offers business services as some do not." –LML

This is one of the first steps for a good foundation to your new business.

< Step 7: Start A Savings
Step 9: Prepare Legal Forms And Documents >

For questions on specific topics or if you would like more information on anything related to the above post please feel free to contact me and I will get back to you as soon as possible or if it is a FAQ I will create a new post :)

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