In 2008, when my dad went into bankruptcy I quickly had to pull together a LLC corporation, and take on 520 acres of farming. Over night I had to develop a budget, obtain a line of credit, sign land leases, obtain insurance, and take a loan out on $90,000 worth of farming equipment that use to be my dad’s. Wow! Seems like a lot doesn’t it? It was a lot, and the whole time I had to juggle a full-time job and my wife was pregnant with our second child. Let’s just say it was a very “interesting” time in our family’s lives.
When I started Iowa Farmboy Inc I first off had to obtain a business EIN (tax identification # for my business), which I ran through a local lawyer for about $250. It was a lot easier than going through some online LLC business and provided my family the protection of an LLC corporation. With my EIN # in hand I then opened up a business bank account, which I did through a brick-and-mortar bank in my local area. It also had a lot of online bill pay features and budgeting apps that made it easy for me to manage my business accounts online. Tip: Focus on getting a business account that offers free accounts, online access, and a lot of flexible account options to move your money around.
After I had my business checking account I was able to start operating my business in paying bills, depositing checks, and providing a platform for my line of credit to be wire transferred to. In looking back at my business I realize that having my EIN and business checking account were some of the most important basic building blocks to get started. I always thought getting a budget, business plan, logo, and line of credit would take precedence. Nope.
Operating Your LLC Business
Once my LLC was operational for about 3-6 months I soon started to realize my checking account was starting to accumulate a significant amount of cash, which was just sitting there. Stagnate. Earning 0% interest. So I started to look into opening a business savings account, which just happened to be through the same bank as my checking account. Having both accounts through the same bank made it easier and faster to move money from a checking account into an account that was actually earning me some interest. At the time I was earning about 3.5%, which is definitely a lot better than 0%! :) Tip: Do your research before choosing a business savings account, and again find one with zero fees, high interest, FDIC insurance, and customer friendly.
Overall, starting a business was a lot easier than I ever thought it was but remember to focus on getting your business checking and savings account early on to be able to operate your business fluidly. It’ll definitely help things move smoothly in the future for your new business!