Starting a business is exciting, maybe a little nerve-wracking and certainly a little overwhelming. There are so many things to take into consideration in your planning and execution. Some of those things are simple and some are incredibly complex. Banking should be nice and simple.
Once you’ve identified your business structure (LLC, Corporation, Partnership, etc.) and formed your business, it’s time to set up your business bank accounts.
Here are 3 items to consider when setting up your business’ bank accounts.
1. Identify your banking needs
Not every business is created equal so why should your banking needs have to fit in a box? Identify your business needs and find a bank that can meet those needs. Don’t feel like you must fit within a bank’s predetermined box.
The most common business banking needs are:
- Checking accounts – manage day-to-day cash flow of the business.
- Savings accounts – maybe you are saving for taxes, maybe you are saving for a new building. Savings accounts for businesses are an effective tool for achieving long term goals.
- Loans – this can include new construction, equipment, business ownership changes, vehicles, real estate or a line of credit for working capital needs. Basically, financing tools to help you effectively manage the growth of your business.
2. Consider the value-adds
Savings, checking and loan accounts are all pretty straight-forward. Any bank can provide these services but, when you’re setting up your business accounts you should also consider the other services banks offer and whether your business would (or could) use them to improve operations.
- Remote deposit – make deposits easily and without physically going to a bank location.
- Payroll – process employee payroll efficiently and cost effectively.
- Merchant card processing – accept credit card payments from customers.
- Credit cards – short-term financing vehicle, which also may earn rewards.
- Wire transfers – move funds securely to any bank account in the United States or abroad.
- Employee services – confidently refer your employees for personal needs and know they will be taken care of.
- Partnership – work with a business partner that will add value by being both accessible and responsive to your ongoing needs.
3. Choose a bank that aligns with your business’ goal and values
Evaluate a bank based on how their products and services match your needs and, perhaps more importantly, how their values align with yours. The cost of services provided by your bank is certainly important. However, the ultimate value of those services depends on several intangible factors such as 1) Banker accessibility and responsiveness 2) Banker willingness to take the time to understand your business and 3) Banker-provided recommendations that match products and services with the specifics needs and goals of your business.
If you’re a healthcare professional looking to build a new practice, for example, evaluate banks on their experience working with other healthcare practices.
Similarly, if you value local business because you, yourself, are a local business, consider banks based upon their involvement in the community and their contribution to the local economy.
Choosing a bank based on these soft-values instead of simply an interest rate means you’ll get to work with a team that believes in your vision and is aligned with who you are and where you want to go with your business.
Considering these items when setting up your business accounts will help ensure you partner with a financial institution that cannot only fulfill your banking needs, but will be a trusted advisor through the achievements and challenges faced by your business over time.