Business Accounts + Finances
Ready to start a business but don't know where to begin? Candice talks about the crucial factors to consider when selecting the right bank and account for your business needs.
Hey, you! It's Thursday at 10am. You know what time it is –it's Coffee Chats with Candice. Grab your cup of coffee or beverage of your choice, no judgment here, and that includes your business. And let's chat about Business Accounts and Finances.
All right, for those of you who don't know me, my name is Candice Montgomery. I'm the founder of “Beginner's Guide to Budgeting,” and “Monetize Your dream,” a course to master business basics. I help new and aspiring women entrepreneurs master business basics so that they can achieve personal and financial freedom. So, if you're new to me, I own three businesses. My first one, my husband, and I started in 1996 and now is in its 27th year. We've paid off over $450,000 in 7 years. And since 2022, we have been completely debt-free in our personal and business lives. I'm passionate about business and budgeting and sharing that with you.
Choosing the Right Bank and Account for Your Business
Business Accounts. I've talked about them before, and today I'm going to go into a little bit more detail about them. And kind of what you want to look for when you're choosing a bank, and then account for you and your business to make sure that your needs are met. Like if you're going to need a business loan or a line of credit, or merchant services, which is being able to accept credit cards. You also want to make sure that you check their fees, because banks have different fee structures, and there might be a monthly fee or a per transaction fee, so you want to be aware of that. Starting out, you want to try to get that free basic business checking account because that is going to be the best benefit for you because there won't be any fees, and a high yield savings account. Or you might need a business specific account with additional features. Those are things that you'll have to look into. You want to make sure that they offer online and mobile banking because that's where most of our business is done. And now, you want to make sure that the financial software that you're going to be working with is going to integrate because that's going to reduce a lot of manual entry for you.
You want to make sure that there's a branch close by. Are you going to have to be taking checks to be deposited? Are you going to take checks in your business? For our HVAC business, we still take checks and we take cards, but in my Tanning business, when I went strictly to spray tanning in 2009, I quit taking checks, so I just take cash or card and the majority of time it is card. That's why you want to check into merchant services, what you're going to be able to do, but some banks are gonna require you to come in to a local branch to do certain tasks. So, maybe to start your business account, some banks will let you start it online. Certainly convenient, but you want to make sure that you have the branches near you so that you can get to it, if you needed to in a hurry.
Would you need an ATM? Most businesses don't need an ATM, but if you're a business that offers like, you know, if you need petty cash or something like that, and you have to purchase stuff with cash, or if you do accept cash, and you're having to get change, so you'll need that as well. And then do they have good customer service and support? Because if something happens, and you have fraud, or like us years and years and years ago, we had checks going out, and outgoing mail was stolen, and the checks there were like, I don't know, 20 checks for like $7,500, that was going out, and two checks were cashed before we knew what happened. And there was a, I don't know, there was a thing called “washing check,” “check washing,” I guess. So, they put their name over it, and they were able to take it to their buddy at a grocery store and get it cashed. You want to make sure that they'll be able to help you. And our bank, you know, I contacted the police, I went to the bank. And the bank opened up their lobby, even after they were closed to help me get this address, because it was such, I mean, it was still business hours. But the lobby closed early, and they helped get everything that I needed done to stop the checks and to make sure we got our account changed, because we had to keep working. We had to block the account, or we had to stop the account, and we had to open up a new account and transfer the money over, and it was just it was such a big hassle. You want to make sure that your bank is going to be able to help you with that. Big banks have less customer support, and their customer service can be less than desirable at times. Not all the time that they do have a lot of good ones, I don't want to make it sound like they don't. But sometimes if it's outsourced or something like that, and they're just somebody on the other end of the call, they're not somebody in person, they're not somebody that you know, or is in your town that you've been able to build rapport with, all this time that you've been growing up in your town or whatever.
I don't talk about credit and financing very much because I would try to avoid that if possible. In the event that you're going to need credit or even be able to offer financing for your customers, depending on what kind of business that you're going to have, you want to make sure and ask do they offer that. As far as business loans, lines of credit, or other products, does that align with what your business goals are? You might not even know what your business goals are yet, but that's something to be thinking about when you're considering your bank. This is huge. You want to make sure that the bank offers integration with your financial software, because that will save you so much time when you're entering transactions for your accounting or when you're having to download transactions from the bank. And you know what's happening because years ago, it wasn't offered, and so it was such a hassle. But now, more and more banks, even small banks are working with financial software that you can be able to do that and it will reduce so much time in your manual entry.
So lastly, you might check with your bank and ask them if they specialize in serving your specific industry. Sometimes banks can offer that in a specific industry, and they might have insights and solutions that you wouldn't normally know or you wouldn't be able to get from another bank that doesn't specialize. You want to make sure and take the time to do your research making an informed decision, because that can significantly increase your efficiency and success of your business. You want to do your homework and just don't run out there and get the first bank account because you're excited that you're starting a business. You're like, “Oh, I'm starting a business!” you can think about the long term and not have that ready right now. But if you need to go out and get a bank account immediately, I would try to get a free basic checking account because if you needed something immediately, you're like, “Oh my gosh. I gotta make some sales. So I gotta have an account for that to go in.” There are people who want to buy stuff from you, and you're like, “Okay, well, how do I do this?” So, that way you can get going if you needed to, but you want to do your research. And you know, you might have to change your bank in the future or change accounts in the future as well. Not necessarily change your bank account, like if you have a sole proprietorship, and you go in and get a free banking account, then you can keep the same bank account number, or in change to a different style of account. Maybe it's not a free banking account, maybe it's something else. But if you're going to be changing the structure of your business, then I would definitely change to a new account to start fresh with the new business as the new structure with a new account.
So, briefly talking about cash flow. Really, the definition of cash flow is money flowing in and out of your business over a specific period. Like the first quarter, or annually, or semi annually, however, you're looking at it, but it's the money going in and out of your business. There's two main types of cash flow – there's positive and negative cash flow. “Positive” is that your income is exceeding what you're spending on your expenses, and your “Negative” is the opposite. So, your spending, expenses overhead etc. exceed your income, which is not where you want to be. But sometimes that is going to happen when you're first starting in your business. You want to be aware of that to help offset any issues that may be caused. So you want to know that you have a backup, if you're like, “Oh, my gosh, I ran out of money! Now what do I do?” Because you can't just stop your business. I mean, you can but then you go out of business, and you don't want to do that.
I want to mention that we have our Thanksgiving and Christmas meal planner downloads available. If you're a planner like me, and you like fun stuff, then you can go to my website. But it's a Thanksgiving and Christmas meal planner, and so it sorts out everything. There's also a gift list guide, so you can write down what you want to buy for somebody or what you've already purchased for somebody, so that you don't duplicate things. The other thing, too, is that I launched my group coaching, so we are getting started with that. The first email went out yesterday. If you're interested in a group coaching, it's going to be a five-week coaching, and we're going to talk about all things business and getting your business going. Or if your business has already started and you need help, then you want to to join us and I'm taking just a small group for this one; no more than 10 people, so if you want to get in on that, definitely check it out. That's also available at my website at candicemontgomeryonline.com, and that would be under group coaching.
If your business is not started or if it's going and you need some help, we're going to be talking about 2024, kind of getting ready, and ready to start. So, if you're ready to get started on your business or you've been thinking about it, and you've been putting it off, or you want to get your 2024 going with a bang, then join us. I would love to be able to serve you, and in help you be as successful as you possibly can be.
All right, I will not see you next week for Coffee Chats because it's Thanksgiving. If you celebrate Thanksgiving, I hope you enjoy your time with your family and your friends, and have a Happy Thanksgiving! I am certainly looking forward to having some turkey, you know, it's one of those annual things that you kind of just look forward to. So, I want to thank you for taking your time out of your day to be here with me now, or catching the replay. I hope you have a fabulous Thursday and a fabulous weekend, and I will see you in two weeks, same time, same place for Coffee Chats with Candace.
And actually, I'm sitting here thinking I might be on Wednesday. The 29th might be my next one because I'm leaving on the 30th for a business trip, and I will be gone at my normal time. I'll actually be at the airport, so I don't want to go live at the airport. So, maybe we'll do Wednesday. Look for an email to go out, look for a post to let you know when my next live is, but it will be two weeks, so we will not be here for next week for Thanksgiving. I hope you have a wonderful, wonderful Thanksgiving and spend time and enjoy the time with your family and friends. All right, have a great day!