Today’s episode has financial questions you want to know the answer to, especially when you are first starting out. That’s why I invited my very own husband to the show. Someone who is never fearful about talking was a little podcast shy, which makes me laugh because he’s the total extrovert when it comes to the two of us.
My husband Adam has been in banking for 16 years and worked for a couple of different institutions. He also has been a manager of a branch on one of the biggest offices in the State of Ohio for the past 10 years. Adam has done just about every role in the bank, like business lending, business credit card, and specializes in helping small businesses to get started, typically, any company under 3 million dollars annual sales. The perfect person to ask any financial questions!
So he obviously has to help me with my business and was very excited to get it off the ground when I first started in 2015. He also did all the background stuff for me. But for now, he will answer some financial questions from you guys.
Financial Questions Answered with Adam Kelbach
The first question is from Amy: “How do I separate my personal and business?”
Adam: The first thing if you are setting up an LLC, is to obtain your secretary state documents, Tax I.D number if you choose it, and from there set an appointment with your local bank. Then, open up your LLC account, it’s best to not comingle your personal and business money, just because of taxable reasons and other things that go along those lines. So, getting a separate paying account put aside specifically for the business is a must.
The second financial questions are from Erica: “Isn’t LLC all we need to have to protect our asset for small business?”
Adam: LLC is definitely the main angle that protects your personal assets, and there are other things too like trust which can assist with that. But LLC is more than enough to be able to protect the assets and many businesses when they have a separate entity such as LLC or Corporation that it’s what most people do.
“What if we’re just starting and you don’t have anything set aside, is it possible that we can get a cash flow even freelancers?”
Adam: The main reason why businesses fail is that they don’t have proper reserves. It’s kinda like your personal paycheck, pay yourself first, and put money aside to cover expenses. For cash flow, look at different resources, credits card can be your best friend or your worst nightmare. If you use them right they provide you 45 days of cash flow, which could be a quick way to cover your start-up cost.
Another financial question we have is: “When setting up a business checking account, are there high yield accounts out there?
Adam: With the uncertainty in the market, you’ll not gonna see much high yield business checking account. If your goal is to separate money and be able to have reserves, then having a saving account is enough.
Stephanie asked: “How much do I set aside for taxes?”
Adam: I don’t have enough knowledge to answer too many taxable questions. But you’ll be wanting to set aside 37-40% for tax payments.
If you are in the Plan, Create, Launch, Land, and Grow course, I’m putting out a series about bookkeeping, LLC and more. So make sure to check out that lesson if your having trouble.
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