You have probably thought about setting up separate bank account for your home expenses and your home business. However, making the commitment to doing that can be difficult. If you’re just getting started in your home-based business, you’re probably using your own funds to get things off of the ground. This blurs the line between expenses and makes having two bank accounts seem silly. That’s true, in a way. But if you’re really planning to grow your home business, you need to take it seriously as a professional endeavor. And to do that, you need to have separate bank accounts.

There are many benefits to having a business bank account for your home business. A few of these include:

• Increased professionalism. When you write checks to service providers and contracted employees, you look unprofessional sending a personal check.
• Lower risk. If you differentiate your business and home in as many ways as possible, you’re at lower risk of losing personal money if you’re ever in the unfortunate position of having your business sued.
• Doing taxes is easier. When all expenses are put on business credit cards and paid with the professional account, you can easily see what was spent on the home business.

To set up your business bank account, you should look at your home budget. Make a concrete determination about how much personal money you can afford to invest in this business. Take that amount from your personal savings and use it to start the business bank account. Avoid drawing from personal accounts in the future if at all possible. By acting as your own investor, you encourage yourself to make this business work.

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