Coming up with an idea for a small business can be an exciting prospect, especially if you know there’s a niche in the market you can impact immediately. Starting a small business is more than developing a product or service and selling it to the community, though. The most effective businesses rely on careful planning, strategic decision-making, and hard work to ensure their success.
In some cases, that’s not enough to guarantee growth. At Equity Bank, we pride ourselves on being champions for businesses of all sizes, but we have a particular fondness for small businesses. Having grown from a start-up just more than a decade ago, we understand the unique challenges small businesses face, including the management of daily expenses and income. To that end, one of the most important things a small business can do is to set up a small business checking account as soon as possible.

Why Should I Open a Small Business Checking Account?

If you are just getting started or only have a handful of customers, it may be tempting to continue to deposit payments and pay expenses using your personal checking account. Avoid this temptation. As part of your business plan, explore your checking options and make a decision early. It will save you many headaches in the long run.

Paying invoices, vendors, and expenses out of your personal account can make managing and earmarking funds for business purposes more difficult. By having a separate funnel for all business-related income and expenses, keeping track of those transactions is much easier. In addition, opening a small business checking account will lay the groundwork for relationships with your local bank; when the time comes to open a loan for a business expansion or to purchase new equipment, you will already have made the first steps toward cementing that partnership.
Having your business income doesn’t mean that money is unavailable, however. By choosing the right checking account and pairing it with your personal accounts, you can easily pay yourself by transferring money between accounts. You can even set up automatic transactions through your online banking portal and mobile banking app.

What Features Should My Checking Account Have?

There’s a lot of overhead in running a small business, especially if you have expenses such as rent, vendors, and wholesale costs (for product costs). Keeping the expenses related to managing your money as low as possible can help reduce these costs. In general, you should look for a checking account with:
  • A low opening balance (ideally $100 or less)
  • Free transactions and minimal overage fees
  • Free online bill payments
  • Tools to access your account anywhere
  • A free debit card to handle daily transactions
If you’re the only employee on the payroll, such as a freelance graphic designer or writer, cutting costs is even more important to your business’s success. In these cases, a sole proprietor checking account is an even more attractive option. Equity Bank’s version of this account can help you build a strong foundation for your business with unlimited check writing, interest on balances more than $1,000, and no minimum balance required.

How Do I Maximize the Benefits of My Small Business Checking Account?

Managing your money is a key component of business success. It’s vital that you work inside your accounts daily, especially as you’re just getting started, but what if you don’t have time to make trips to the bank on a daily basis? Mobile banking and secure online banking make balancing your accounts and tracking expenses and payments a snap. If your business regularly invoices customers, find software that allows them to pay online and deposit that money directly into your account with minimal fees.
If you’re making payments regularly, using your debit card for all transactions is a great way to stay organized and track your expenses. In fact, by committing to using one card explicitly for purchases related to the business, you can simplify the process of itemizing your expenses down the road because everything will be in one place. This will make the process easy for you—if you’re doing your own taxes—or your accountant.

What if My Business Grows?

By starting with a smaller account, you give yourself the breathing room to ramp up as your business grows. As you begin to expand—either through hiring employees, making more money, or opening new locations—you will likely want to explore other types of checking accounts to meet your unique needs. Maybe you’re collecting thousands of dollars each month, for example. Perhaps you need a full online commercial banking suite. Equity Bank makes it simple to transition to more robust checking account options for your business.

Success Stories

At Equity Bank, we celebrate the entrepreneurial spirit every single day, with a focus on telling the stories of businesses both big and small. Each of the companies and individuals profiled in our Napkin Stories series share the same values that help to drive successful commercial companies forward. They also all share an enthusiasm for seeking advice and guidance from the professionals and experts at Equity Bank, creating lasting partnerships that help them continue to grow on a daily basis.

Where Do You Want to Go Next?

Your business is important to you, which means it’s important to us. Whether you are sketching your first idea on a piece of paper or seeking to make a career change and build your own brand from the ground up, leverage the expertise and valuable business banking products Equity Bank has to offer, beginning with your first small business checking account. Have questions? Visit a branch near you and speak to a banker today.