Business-First
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Banking Mentality
Family Features
Owning a home-based small business offers undeniable perks –
flexible hours, the ability to control your own professional destiny,
even the option to work in your jammies if the mood strikes.
But many first-time business owners operating out of the home
underestimate important aspects of operating your own company
– especially when it comes to finances.
Whether you’re funding a startup or sustaining an existing enterprise, money management is a critical aspect of successfully
running your home-based business. However, many first-time
entrepreneurs make the mistake of treating their home business
finances similarly to their personal accounts. In the long run, this
can be a costly mistake, according to Jay DesMarteau, head of
small business at TD Bank.
Checking accounts are the most popular financial products for
small businesses, but a recent TD Bank survey found that more
than 40 percent of small business owners are using the same account for business and personal use.
An important first step is to understand the distinctions between a
business checking account and a personal checking account, and
why the former is a safer bet for your business. Business checking
accounts allow small business owners to:
1. Manage your cash flow better. Small business owners have better cash flow management and more advanced payment capabilities when they choose business banking over personal banking for
business.
2. Build your business brand. Having a business checking or business debit card with your company name on it can help establish
an identity around your business. Also, customers might feel more
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comfortable writing a check to a business instead of a personal
account – it feels more professional.
3. Simplify your accounting and bookkeeping. Having a personal
checking account and using it for your small business means you
aren’t separating your business and personal finances. And that
can make accounting and bookkeeping more complicated.
In many cases, business accounts also afford a different level of
protection and security than personal checking accounts. “Small
business owners take on risk,” DesMarteau said. “A small business
owner has better business fraud control when they use a business
checking account compared with a personal checking account.”
Choosing the right bank can also help you effectively manage
the money side of your home-based business. The vast majority of small business owners (74 percent according to one of TD
Bank’s local Small Business Pulse Check surveys) rely on lines of
credit for expenses such as product or equipment costs, rent and
marketing. Selecting a bank that offers diverse account options,
bringing you the whole bank, including business checking and
lines of credit, as well as loans, savings and credit options, can
prepare you to tackle any number of financial scenarios that arise
as you build your business.
With proper financial guidance and a strong banking partner,
small business owners can confidently focus on bringing their
entrepreneurial visions to life.
www.tdbank.com