Q&A: "Help, my bank said I can't open a business account!"

This transcript was generated from the episode audio and may contain minor errors.

[Music]

My bank said I can't open a business account. Got a listener question today. Somebody goes into the bank to open a business account because they have heard it's a good idea to keep their business and personal finances separate. That's true, that is a good recommendation. I make that recommendation all the time.

But in this case, the listener found that it was difficult. Now, most of the time it's not that difficult. So I'll talk about that a bit in my answer. But what should this person do? And why should you consider doing this?

What's the easiest way to get it done, et cetera. Also, welcome to a new month. I realize it is the start of a month, episode 3,378 here on Side Hustle School. I'm so glad you're out there. Stay tuned for the detailed question and my answer.

[Music]

Hi, it's Ben from Montauk. So here's a weird one for you. I thought it would be a good idea to have a separate business account for my side hustle. But I ran into a problem when I went to the bank. After waiting nearly an hour to talk to someone, they said that I didn't qualify because my business wasn't registered properly.

I thought you don't need a license for most simple businesses like mine. Now I'm annoyed at the bank, but also a little worried that I've been doing something wrong. Have you heard of this happening before? What would you suggest? [Music]

Well, obviously the laws can vary depending on your jurisdiction.

We've got a global audience here on the podcast. So I never assume that everybody's in the United States or any other particular region. And it's also not just the federal laws. They're also laws for your state or province, maybe even your county or city. But I think in general, your best response here is gonna be to try again with a different bank because this is pretty unusual.

Most of our listeners in most places, it should not be that difficult. Banks want customers. They typically have a business account option, a small business option that should not cost much at all. It should be like $10 a month or something. If you do need to be registered with the state or the province, which is a scenario in some places, that's typically something that could be done online, like on the spot for less than $100, sometimes free.

So if you really are unable to open a different account at first, my suggestion is to use a spreadsheet or some bookkeeping software to make sure you keep up with business expenses and sales separate from your personal funds. But if you're like me and not super into bookkeeping, having a separate account will help a lot. So that's why I really do encourage you to do that as soon as possible. Most likely you're gonna have just a better experience at a different bank. Not sure quite what happened there, but I don't think that's normal.

I hope that's helpful. Listeners, I hope you're taking action on an idea that you have. Just some small steps to get closer to that goal that's important to you. And of course, the podcast will continue to roll out all through this month and beyond. You know where to go for the archives of the show, sidehustleschool.com.

There are also notes, pages, resources, et cetera. We will continue to feature listener updates as we continue throughout the year. Let me know if I can do anything to be helpful. My name's Chris Guillebeau. This is "Side Hustle School." [Music]

From the "Onward Project."