The short answer: you need one bank account per person, and then one personal account.
The question really should be “Do you have 5 businesses, or do you have 1 business with 5 marketing channels?”
If it’s the latter of the two, then what you really need is one business account, 5 DBAs, and a good bookkeeping system to track income from each.
For more info on DBAs, check out this bitchin blog.
Then, make sure to checkout the free download How to Be Your Own Tax Pro & the Profit First Roadmap.
Hello and welcome to episode four of the unfuck your business podcast. My name is Braden and I am your host. Thanks so much for listening to this episode. Again, this is one of our short Tuesday episodes, so we're going to tackle one of the questions that came from our Facebook group. If you're not already in the group, you can join a on Facebook, just search Brayden's besties, B, R, a, D, E, N, Brayden's besties. You can find it. I request to join. One of the questions you're going to get is to tell me what a legal or tax question you have for your business. And then I collect those questions and those questions are what I answered generally here on the podcast. So the question we're going to dive into today, someone ask, I have, I have five businesses and use the same bank account for all of them.
How do I fix this? So this is not a good idea. You should not be using multiple businesses accounts for each business. And really the answer to this question is simple. You need to create four new bank accounts or five depending on how you're operating right now. So if you have an LLC, an S Corp or a C Corp, any type of formal legal entity, you are required to have a separate business bank account. It is a necessary item on your to do list in order to maintain your liability protections. The whole point of having an LLC is to protect your personal assets. For more information on that, you can go back and listen to episode two. That was our question and that episode, but you need to have a business bank account. So this individual were to have a personal bank account right now for their personal finances and all five businesses.
Then they need to open five new accounts that they have all five businesses and one account. Then they should separate it. The caveat I would give is whether there actually are five businesses, so sometimes you have one business with five different marketing channels, so you might actually have one legal business with five to her websites, but they're really all the same business. It's kind of difficult to conceptualize, but I'll give you an example. My business used to be called creative pronou work community and part of my grand vision was eventually maybe I would start a digital nomad community because I also worked with a lot of digital nomads. Maybe I would have a fitness industry community and the idea is I would provide a membership in courses to all of these different niche audiences on what it is that I teach tax and law, but they would just have different websites.
Whether that's a good use of my energy is kind of a different story. I would argue probably no, which is why I didn't go down that route, but they would all be run through my same business, Brayden Drake LLC with just different marketing channels, so I would have one business with five D VA's, in which case it's fine to have one bank account. You would just maybe want to set up different chart of accounts and your bookkeeping to track the profitability of each of those streams of revenue. But if you genuinely have five businesses, maybe you have a graphic design company and then a retail store and then a coaching business. Those are three completely different things. They should have three bank accounts. So that's a little primer on that question. I hope it's helpful. If you want a little bit more information about banking in general, managing your cash flow, your business finances, and your taxes.
You might want to check out a free download I have. It is called the prophet verse roadmap and how to be your own tax pro. So it's really two different freebies in one document. The first one we'll walk you through how to manage the cashflow in your business in order to save for taxes, pay yourself, all that good stuff. And then the second one, we'll give you a system on how to get started. Really paying your taxes and managing your business, how to be your own CFO, that kind of thing. So if you want to check it out, go to unfuck, your biz.com and in the top there you'll see the button that says freebies. Click that you can grab it. As always, I would love for you to subscribe, leave a review, a DM me on Instagram at Brita. Mme. Drake, if you have any questions, but I would love, love, love to see you in the Facebook group, Breedens besties. We can connect over the podcast, chat about some of the topics on here, and maybe I will answer your question and one of these episodes after you leave that. So thanks again for tuning in and I hope you have a great day.
Have a follow up questions or want to meet some fellow kickass biz owners who also are trying to get their shit legit? Come be a bestie and join us in the Facebook Group.
You'll learn: what the three mistakes are; how to fix them; and also how to work with me to get your legal & tax shit legit.