When the time finally arrives to launch your startup, one of the most significant responsibilities is selecting the right bank. After so many hours, months, or maybe even years of working on it, you want to be sure that every piece of the puzzle is as perfect as can be.
In identifying a bank for your startup; take the time to shop around, weigh your options, and choose an institution that strives to be a partner to your company and not just another bank.
The main thing, as a startup, is that you require personalized service and a bank that can strategize with you (not for you) regarding what is best for you and your burgeoning business.
Before officially selecting the best bank to open a business account, schedule an appointment with each business banker to talk them through your priorities, and to give them the opportunity to explain their startup programs further, and to discuss their bank’s specific benefits.
You want a bank that cares about startups and small businesses. When talking to the various business managers, notice if they make you feel good about opening a business account there.
Things to keep in mind when shopping for a bank
Establish a legal entity
Whether it’s an LLC, corporation, partnership, or fictitious business name (DBA), first ensure you have the papers you need before going to a bank and setting up your accounts.
Online software compatibility
Research which banks work well with online software you will want to use like QuickBooks, Mint, FreshBooks, and Wave Accounting, etc.
Online transaction ability
Inquire whether a bank lets you read records online, and allows you to make payments and schedule payments online. Ask about the formats they export transactions in.
Minimum balance requirements
Stay away from banks that require you to maintain a higher minimum balance than others. This is because you will need all the funds you can get as a startup, and you don’t want to lock your resources away right from the very onset, or waste your money paying penalties for not keeping a minimum balance.
Bank manager compatibility
Put as much effort into nurturing a relationship with your bank manager as you would a new employee. This person can:
- guide you concerning financial solutions and expertise available
- advise you on the best products available for your situation
- quickly facilitate actions (such as closing down old bank accounts and opening new ones)
- help you achieve your business and personal goals
- direct you to other specialists in areas such as insurance, superannuation, estate planning, and wealth management
- get charges on your account reversed
- assist you with cheques, cash deposits, applying for loans, etc.
- pre-warn you if a cheque is going to bounce
Fine print contents
Before you sign up with a bank, make sure that you have read all documents through, and thoroughly understand the annual fee, debit card fee, and penalties as these factors make a significant difference for a startup.
Keep in mind that zero balance current accounts are basically like a mythical creature.
Separate business and personal accounts
This means having a different checking account, savings account, and business credit card.
- Checking account – should be in the name of the business, with you as the owner and authorized signer. This account should be free, as long as you keep a minimum balance.
- Savings account – use this account to put aside the money that you will need to use to pay your taxes.
- Business credit card – choose a Visa or Mastercard and look into credit card perks.
If you are still unsure about what bank to choose for your new startup, take the time to ask around people in your area who also run their own businesses.
Aside from asking them what bank they use, also investigate what they like about their bank, what would they change, if anything? Do they feel there is anything their bank is lacking? Why did they initially choose to open a business account there? Did they look into the best corporate credit cards?