There are still a few things you simply cannot do completely on-line. You'll need to be prepared before you go to your bank to open your Business Bank Account.
Ok, so you have your LLC or S-Corp set up. Right? If not, head over to "Business Structure Know-How for Entrepreneurs" first if you do not have your corporation set up.
Now it's time to set up your Business checking and savings accounts. Having separate bank accounts for your business will make your life easier when it comes to doing taxes and tracking your expenses. This gives me peace of mind, but talk to your bank or accountant or even a tax professional to see what's best for your specific case if you are unsure about how to proceed. For me, playing it safe is the best option.
I set up an LLC through Rocket Lawyer and I currently belong to a federal credit union. After I received my EIN through the IRS, I headed over to the bank. The whole process took just over an hour and was completed by working with an account representative, not the teller.
What do you need to take with you to the bank?
- Drivers license - you have to have an ID with your current address or some other documentation like an utility bill to verify your residency
- LLC paperwork from Rocket Lawyer
- EIN paperwork from the IRS
What questions will you be asked?
The first question the lady asked me was if I was registered with www.sunbiz.org. I had no idea what this was. She looked up my "LEFT SIDE ART LLC" and sure enough Rocket Lawyer already had me registered. Love them! I live in Florida, and this is their "Florida Department of State Division of Corporations". Each state has their own. Google is your go-to resource for this one. Even if you do go through Rocket Lawyer, or someone similar, it would be a good idea to see if you are registered with your state's Division of Corporations before going to the bank.
I had not yet decided if I would consider myself as the CEO or an owner, but this was one of the million questions the lady at the bank asked me. Also, I made the mistake of not taking my hubby with me, so he is not currently on the business bank account. To get him on the account, we will both have to go back and resign all of the documents. Yay, I am so looking forward to that.
Here's a list of the questions you should be prepared to answer:
- Who will be able to access the bank account? These people will need to be present.
- Am I registered with SunBiz.org, Florida Department of State Division of Corporations? (if you're in Florida)
- What is my LLC docket number?
- What is my EIN number?
- Am I the CEO or owner of the LLC?
- What percent equity of my business do I own?
- What percent ownership in my business do I own?
- Is the address on my drivers license my current home address, and if not, I would need other proof like an utility bill.
- What is the approximate income I should expect from my LLC?
- How will I get paid from my customers? Cash, check, electronic payment, etc.
- What is the purpose of my business (and it could not be associated with distributing my own money orders or a bunch of other financial products that the bank already offers)?
- What is my business email and phone number?
- Some of the personal information I was asked for included email and phone number.
What are some of the fees to look out for?
The fees with any bank will vary, and fees may also vary on what type of corporation you went with. In my case, Left Side Art is an LLC that both my husband and I are listed under. Since we were already members of the bank with personal accounts, we had to pay $3 to open the business accounts.
There was also a requirement to have a savings account associated with the checking account. The minimum amount that I have to keep in the savings is $5. Technically, there is no minimum amount to keep in the checking, but if I drop below $250, then I pay an extra $5/month. The monthly fee to have the business accounts open is $7.50/month.
When opening the checking, I had to put $100 in it, which I could have taken out right away if I need to. To keep from paying the additional $5/month, I put in $500 to stay over the minimum $250 and to have a little bit of a cushion. At this point, I had already paid for my website domain, hosting, and theme and bought most of the other tools (like a laptop). I had also already paid for my LLC and all of those fees and was not expecting to put out much more at this point.
I ordered a box of checks and a debit card. I realize you may think that you will never need an actual check these days, but if you should ever need it, you'll be happy you'll have it.
Here's the breakdown of the fees I encountered for your reference:
- $3 to open the account
- $5 minimum for the savings account
- $7.50/month to keep the account open
- $100 minimum first deposit to the checking account. I deposited enough to feel comfortable I would not go below the minimum $250 balance requirement so I would not be charged an additional $5/month for each month I'm below $250.
Other fancy options to keep you accounts safe
My bank offers overdraw protection for both personal and business accounts. If I overdraw from my checking, they replenish that same amount from my savings if the funds are available to my checking, including a $3 fee for each occurrence. This safety net keeps purchases from being declined and keeps checks from bouncing. If either of these occur, there are fees that you could face from your bank and the bank associated with the person you were trying to pay.
If I overdraw from my checking and there are not sufficient funds in my savings, then they cover the charge up to $500 and charge me $30 for each occurrence.
These are free services that my bank offers and you may want to look for a bank with similar options.
Options for transferring money from your personal to business accounts
So here's something that I did not expect and you need to look into:
Since I have my personal checking and savings accounts through the same bank as my business accounts, I thought I would be able to transfer money from my personal to business accounts through the online banking or phone app. However, there are tax reasons for not permitting this, at least at my bank.
In order to transfer funds from personal to business, or vice vera, I have to either go into the bank and they do a cash transfer or I can call the bank and do this over the phone. This might not be extremely convenient, but at least I have options if out of town or even if out of the country.
My bank is a credit union and they are member of a Co-op which many other credit unions are also part of. This gives me the option of going to another credit union if out of town to handle my accounts. Honestly, I'll use this as a last resort, but it's nice to know I could if I needed to.
You'll need PayPal link to Setting up your PayPal to work with your shopping carts. This may take 2-3 business days depending on your bank to complete the verification process. I was able to do an instant verification with my phone number and a verification code they provide. PayPal link to Setting up your PayPal has a business account option for $0/month and is pretty easy to set-up.
Now that you are all set up with your bank, it's time to start looking into what affiliates you want to join to offer products and services on your site.
If you are using WordPress, which I highly recommend, install the free plug-in called Pretty Link. This is a lifesaver if an affiliate should ever change their link address: you go into Pretty Link (read here for more information) and update the link just once rather than having to go through your entire site updating each and every link. It also comes with tracking options, organization of your links, and uses your actual domain name rather than the truncated versions like tinyurl.com or bit.ly.
Here's a list of affiliates to get you started:
- BlueHost for web hosting
- LongTailPro for keyword search, found in ClickBank
- LeadPages for lead pages, opt-in's
- 99Designs for web page design, logos, icons
If you are selling products or services directly from your site, set up your e-commerce. Once you are set up with PayPal, you can look into:
- Shopify for an online store
- E-junkie for selling digital products
- ClickBank for finding products with affiliates or to provide your own affiliate