Starting a small business - Bank account advice needed

cc95597

Hi,

I've been thinking of starting a small business for a while, made a plan etc, and it all seems like a great idea. I'm now at the point where I want to put it all into action and have some queries regarding how I can get paid by customers.

I have a poor credit history and having read thread after thread on opening business accounts and credit searches, I very much doubt I will get one, also, a part of me doesn't want to try to open one and fail as that will not help my credit file.

Also, I'm maybe being overly cautious, but I don't really want to sign up for what could be an expensive business account if for some reason the business doesn't work out. I firmly believe I have a fantastic idea but it's difficult not to think 'what if...'

1) I do not need any financial aid to start this business, I have enough saved to cover the small expenses that would be required to start and am more than happy to use my own money to start. Are the 2 acts of starting a small business and opening a designated business account mutually exclusive?

2) Upon starting, I want to be as professional as possible, my main concern is when a customer says 'OK, who do I make the cheque out to?/What account do I need to make the transfer to?' - I want to be able to give them my business name, instead of my own personal name (just seems more legit/professional) So is it possible to use my own personal bank account for payments to my company name? If I speak to my bank (Halifax) are they likely to accept this? Of course keeping all books separate etc.

The business will be tiny to begin with and very much solely local, upon building I will of course strive to open a business account, I just want to get started first and go from there really.

Any advice would be very appreciated.

Percy1983

Well if starting small just use your normal bank account, it is a bit of a grey area but they don't seem to mind small business.

As for cheques, as a sole trader you are only using a trading name and must state you real name, ie Bob Smith trading as Bob's Garden Services. From there just state on invoices please make cheques payable to Bob Smith.

I will say this works fine for me, my professionalism is judged on the service I give not who the cheque is payable to.

lazer

Percy1983 wrote: »

Well if starting small just use your normal bank account, it is a bit of a grey area but they don't seem to mind small business.

As for cheques, as a sole trader you are only using a trading name and must state you real name, ie Bob Smith trading as Bob's Garden Services. From there just state on invoices please make cheques payable to Bob Smith.

I will say this works fine for me, my professionalism is judged on the service I give not who the cheque is payable to.

My husbad has recently started up as a sole trader and has this written on his invoices - but 50% of the cheques are still made out to the trading as name!

Wywth

cc95597 wrote: »

Hi,

I've been thinking of starting a small business for a while, made a plan etc, and it all seems like a great idea. I'm now at the point where I want to put it all into action and have some queries regarding how I can get paid by customers.

I have a poor credit history and having read thread after thread on opening business accounts and credit searches, I very much doubt I will get one, also, a part of me doesn't want to try to open one and fail as that will not help my credit file.

Also, I'm maybe being overly cautious, but I don't really want to sign up for what could be an expensive business account if for some reason the business doesn't work out. I firmly believe I have a fantastic idea but it's difficult not to think 'what if...'

1) I do not need any financial aid to start this business, I have enough saved to cover the small expenses that would be required to start and am more than happy to use my own money to start. Are the 2 acts of starting a small business and opening a designated business account mutually exclusive?

2) Upon starting, I want to be as professional as possible, my main concern is when a customer says 'OK, who do I make the cheque out to?/What account do I need to make the transfer to?' - I want to be able to give them my business name, instead of my own personal name (just seems more legit/professional) So is it possible to use my own personal bank account for payments to my company name? If I speak to my bank (Halifax) are they likely to accept this? Of course keeping all books separate etc.

The business will be tiny to begin with and very much solely local, upon building I will of course strive to open a business account, I just want to get started first and go from there really.

Any advice would be very appreciated.

A typical bank account for small business would only cost a few quid a month plus transaction charges. Many often offer 12 or 18 months free anyway.
Of course, if the business doesn't take off as anticipated, there wouldn't be much in the way of transactions would there?

If the few quid monthly charges are likely to be the make or break of the business, I suggest you reconsider the whole plan.
You can close an account at any time (assuming any debt on the account is repaid)

Wywth

Percy1983 wrote: »

Well if starting small just use your normal bank account, it is a bit of a grey area but they don't seem to mind small business.

As for cheques, as a sole trader you are only using a trading name and must state you real name, ie Bob Smith trading as Bob's Garden Services. From there just state on invoices please make cheques payable to Bob Smith.

I will say this works fine for me, my professionalism is judged on the service I give not who the cheque is payable to.

It is normally forbidden in the terms of a personal bank account to use it for business purposes. If the bank discovers a personal account is being used for business they can either suspend the entire account or more usually just transfer it to a business account anyway (I don't think there's any fee free initial period if that happens). Worse still it means not only business transactions, but also all the personal transactions going through the account will be charged at the appropraite business tariff.

Percy1983

lazer wrote: »

My husbad has recently started up as a sole trader and has this written on his invoices - but 50% of the cheques are still made out to the trading as name!

I will say I ahve never had this problem but many do pay on delivery of the product to which a few do ask who to pay it to.

Wywth

lazer wrote: »

My husbad has recently started up as a sole trader and has this written on his invoices - but 50% of the cheques are still made out to the trading as name!

Most banks will allow any business account to include one or more trading names.

e.g. Bill Bloggs t/a Bill's Services.

A cheque made payable to Bill Bloggs or Bill's Services can then be deposited

lazer

Wywth wrote: »

Most banks will allow any business account to include one or more trading names.

e.g. Bill Bloggs t/a Bill's Services.

A cheque made payable to Bill Bloggs or Bill's Services can then be deposited

He doesn't have a business account yet though

The bank is requesting a detailed business plan = so i suppose thats somethign else for me to do for him!

Wywth

lazer wrote: »

He doesn't have a business account yet though

The bank is requesting a detailed business plan = so i suppose thats somethign else for me to do for him!

He really should have produced a business plan before embarking on the new business venture

lazer

Wywth wrote: »

He really should have produced a business plan before embarking on the new business venture

I don't think a self employed construction worker really needs a business plan TBH.

cc95597

Wywth wrote: »

A typical bank account for small business would only cost a few quid a month plus transaction charges. Many often offer 12 or 18 months free anyway.
Of course, if the business doesn't take off as anticipated, there wouldn't be much in the way of transactions would there?

If the few quid monthly charges are likely to be the make or break of the business, I suggest you reconsider the whole plan.
You can close an account at any time (assuming any debt on the account is repaid)

As stated, my point is that I am very unlikely to get a business account. This is why I am seeing if there is a way to start a small business without the need to open a specific business account?