How to Set Up a Business Bank Account

If you’re looking to set up your own business, one of the main considerations you need to make (after you’ve created a business plan and conducted extensive research into your field) is what kind of business bank account best fits your needs.

Managing your business finances is a key part of making sure you’re on the right track to success. Without good management of your finances, you could find things spiralling out of control before you’ve even got off the ground. You need good organisation and a realistic idea of what you can get for your money and out of your business account.

Different banks, on the high street and online, will offer you many different options when it comes to opening a business account. Some will offer you a personal advisor to help you get started, while others will offer you a limited period of low pricing. The important thing is to hold back on jumping into bed with any of them too quickly. Read the small print and get to know what kind of bank account is right for you and your business. It may not be the most exciting task, but you’ll need to get this right before you can really get started on running your business and being your own boss.

Firsts things first, you’ll need to shop around for business bank account. You need to get to know the market and get to grips with what different banks are offering potential business customers. The way in which you want to manage your business’ finances will determine what kind of bank account is right for you. For example, do you want to have a face-to-face interaction with your account manager or would you prefer just to manage your finances online?

You’ll be offered all kinds of benefits as a first time business account holder, including:

Free automated transactions – This is really useful because you’re going to have a lot of money moving in and out as you begin to build your business.

Discounts on accounting software – If keeping the books isn’t part of your expertise, and you’re still short of an accountant, this could come in handy. Keep track of all your incomings and outgoings by using some professional software.

Free consultations with business experts – Some banks will try and win you over with free advice and meetings with business experts, who will give you one to one advice on how you can grow your business and succeed in meeting your targets. This is not only limited to helping you manage your finances. Marketing experts and solicitors could also be at your disposal.

Overdrafts – The bigger the better, right? Not always. Some banks will offer you interest free overdrafts, this might only last for a period of time - although it could be a benefit for a lot of businesses. But be sure to read the small print and see how long this period lasts.

To give the economy a bit of a boost, the British government have set up the Funding for Lending Scheme (FLS). According to the Bank of England the aim of this scheme is to try and boost banks’ lending by roughly £60bn to non-financial businesses and households. Although this scheme has had a rocky start (not nearly enough businesses or households have taken advantage of the scheme) it is a way to give your business a financial boost by acquiring a cheap loan.

Thirty-nine banks are now taking part in this scheme and between them they have loaned nearly £14bn to new home owners and businesses. Although these loans are taking time to affect the economy, there is an opportunity for new businesses to cash in on this scheme and take advantage of financial support(1).

(1)http://www.bankofengland.co.uk/markets/Pages/FLS/default.aspx

Online business accounts are simple to apply for, easy to set up and work just like regular bank accounts. The only difference is that you don’t have the face-to-face structure. If you’re running your business online from home then this could be the perfect option for you. Manage your business and its finances all from the comfort of your own home. Online accounts are great for those who want to keep a close eye on their finances. You can watch your money come and go and receive real-time updates just like an online business bank account.

When choosing an online business bank account, one of the main considerations will be cost. Some accounts will charge a monthly fee, whilst others will offer savings to customers paying annually. You will need to research whether transactions and transfers are free, and whether there are any hidden fees which may be charged.

Now that you’ve looked at all the options available to you and weighed up the pros and cons of going in branch or online, it’s time to get yourself a bank account. Once you’ve set this up, you can get on with doing what it was you started this business for in the first place – working for yourself. Whatever your passion, product, service or selling point, it’s time to make your idea work.

By staying on top of your finances and setting up a business bank account that’s perfectly tailored to you, you can focus on running your business and drastically reduce the time spent balancing the books.