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Starting A Business: Financial Considerations

Funding This video is about the administration of your finances. If you’re interested in funding for your business, check out my other videos about raising capital.
Tax
All countries require businesses to be registered with the government for tax purposes. In the United States, this is done by setting up an employer identification number or EIN.
 
Just Google it, go to the IRS website and complete the form.
 
Keep in mind that you may also have to register your business for tax purposes with the state that you operate in.
 
You’ll need to research this for your individual state or region.
 
Bank Accounts
You’ll need the documentation about your company and your Tax ID and any business licenses you need for your city or state before a bank will agree to open a business bank account for you.
 
Keep in mind that there’s a lot more to banking than simply having an account that will be used to collect revenue and pay expenses.
 
I strongly recommend taking a few minutes to review the online banking features that are most important to you.
 
You also need to consider whether the bank account can be integrated with your accounting system, the time it takes for checks to clear, whether the bank offers any business credit cards and whether transferring money is easy or difficult and what it will cost.
 
I currently use multiple large banks in the United States and I can tell you that they are not all the same.
 
There’s one very well-known large Bank in the US, that I will not name, that has bad customer service, terrible online features, and high fees. Again, do your research.
 
Easy & Accurate Accounting
If you plan on using an accountant, send them a quick email and ask for a recommendation for the best accounting system to use.
 
If you use an accounting system that your accountant is not familiar with or requires a lot of additional unnecessary work then your accounting bill will end up being much bigger than it otherwise would be.
 
I also recommend using an accounting system that can link directly with your bank account.
 
This will make it a lot easier for you to track your cash inflows and outflows and allow the accounting software to do some of your accounting on the fly – all of it automated in real-time.
 
When you’re getting started, it’s critical to make sure everything is as simple as possible and as organized as possible.
 
Keep in mind that keeping things organized often involves allocating a little more time now in order to save a lot more time and money, later.
 
I recommend you use Quickbooks Online or Xero.
 
These accounting systems are in the cloud, every accountant knows how to use them, they integrate with most major banks, they integrate with WordPress sites and they are mostly user-friendly.

Download Our Free ‘Start A Business’ Guide

Use our “Impact Entrepreneurship” checklist to start your business and make the world better.

  • Adam Radly

    Founder
    Founder of IIMAGINE. More than $100M raised. TEDx Talk about passion > 1 Million views. Founder of World Reconciliation Day with Nelson Mandela. Founder of One Direct Democracy.