What are some important things to think about when starting a home-based business? This AllBusiness article gives us a Checklist for Starting a Home-Based Business and lists several items that you should have lined up prior to starting a home-based business.
One thing I can add to this list is a business bank account. At any point after getting your business licensing in place, you should consider getting a business bank account. You will need to have a business license and a tax id to establish a business bank account. A lot of people try to use their personal accounts for their home-based business, but that’s not really a good idea. There are several reasons why a business bank account is advantageous.
Partition Finances – Getting a business bank account will help separate your business finances from your personal finances. This is particularly important if you form an LLC or corporation.
Features – Generally there are extra perks available with business bank accounts. These might include interest checking, built-in credit line, and built-in savings account or money market.
Support – Usually there’s better banking support for a business bank account. Banks usually have a separate division dedicated to providing phone support for business bank accounts. In addition, there are usually in-bank specialists who are designated for business accounts.
Credit – Often a business bank account will have a business credit card or credit line associated with it. Usually these credit accounts are on a calendar monthly cycle and often have 20 to 25 day grace periods on paying. This can be a source of cheap short term financing.
So if you’re planning to start a home-based business, don’t forget the business bank account. Here are some other AllBusiness articles on the subject of starting a home-based business.