Banks vary greatly in terms of the type of services that they offer to small businesses.
So take your time and evaluate your options carefully. One word of caution. Once
word gets around that you are about to open a small business, you will have lots
of people who want to be your friends and sell you things. There are many examples
of financial scams preying on the vulnerable small business owner such as interest
free loans. Let the cliché slogan be your guide: "if it sounds too good to be true,
then it probably is".
Start with Your Personal Bank - if you have a relationship with a bank for many years
and you have been a good customer, they would be thrilled to hear from you. Even
if you don't know the Bank Manager, they have your information on file in terms of
how long you have been a good customer. In the banking world where service matters,
you will find your bank very helpful.
Commercial Loans Anyone? - do they provide business loans or are they only into personal
loans? Sooner or later, you'll need funding. Keep this in mind as you are shopping.
Does the bank have programs specifically for a small business owner?
Merchant Credit Card Services - even fast food places these days take VISA, Mastercard
or American Express. It's the cost of doing business in a cashless society. So
make sure that your bank has this service available. Once you authorize the customer's
payment, the amount will be deposited in your bank account within 24 to 48 hours.
In return, you will need to pay a fee of about 3 to 4 percent of the purchase amount.
That's a small price to pay versus going through the hassle of taking a customer's
check. Have you seen any bounced checks lately?
Types of Commercial Accounts - check out the different commercial accounts offered
by the bank. Cash flow is the number one killer of small businesses. So read the
fine print. Is there a holding period on deposits? How much does the deposit amount
have to be before it is held for a period? Is there overdraft protection? How much
will that cost? Is there a minimum amount of deposits required per month? What interest
do they pay out (if any)?
Is it classified as a Federal Depository Bank? When you pay employees over a certain
amount, you will have to make deposits in a Federal Depository Bank? Having the
Federal Depository bank the same as your commercial bank would be much more convenient.
Electronic Banking Services - in the internet world, the ability to move money around
online is a given. But you should double check to make sure that the bank is not
Steps to Opening Small Business Bank Accounts
DBA (Doing Business As) - Be sure that you have filed for a DBA which is your business
name without using your personal name.
Pick a Check Style - Unless you are going into the arts or design type of small businesses,
don't get carried away with fancy check styles. Pick a professional style. Remember
the way your checks look also communicates who and what you are as a business.
Quantity of Checks - purchase the minimum quantity for now until you get a feel for
how many you go through per month and you are certain that you will not change your
company information on your check. If you are starting from your home but you plan
to move out in a year, then that's a good reason not to produce a lot of soon to
be outdated checks.
Other Things to Remember - Get an ATM card to have access to your account 24 X 7.
Invest in overdraft protection. Having personal bounced checks may be an embarrassment
for you but having bounced business checks could prove to be fatal to your business.