Separate Your Business Accounts

I don’t think it’s any secret, in this online world, that just about everyone is trying to make a little bit of money with a website.  After all, it’s not terribly difficult.  It’s not necessarily easy, but it is far from hard.  Throw up a website, put some work into it, and start bringing in money.  I do it with this site and others.  There’s work involved, but you can make money.

If you’re going to do it, you’ve got to treat it like a business from the start.  I don’t mean that you have to create a company, license it with your state and the IRS, and create a board of directors.  What I do mean, is that you need to have the business assets and accounting separate from your personal assets and accounting.  Using your own personal checking account, savings account, and trying to keep them separate come tax time (and you’ll want to) can be very difficult.  So difficult that you almost have to be a CPA in order to keep it all straight.

Keep your business accounts separateWhen I first began making money with blogs and websites, I didn’t separate anything.  The money to buy the domains came directly from my personal checking account.  The money to pay for the hosting of the websites came directly from my personal checking account.  And then tax season came around.  While I hadn’t made much money from the sites, I did make some.  I wanted to be able to use the expenses of the sites to reduce the income from the sites, so I needed to figure all of that out and get totals for my taxes.  Instead of just going into my accounting software, pulling up the business accounts, and running a profit loss statement, I had to go through each months’ statement of my checking account, and single out the transactions that were related to the sites.  After I’d pulled them all out, I had to compile them into a spreadsheet and create a profit loss statement from them.  It easily took twice as long as it should have.  And that was when things were simple and I only had a couple of sites with a couple of transactions every other month or so.  It would be much more difficult now.

How should you separate your business accounts?

I’m still a fan of keeping things as simple as you can.  I don’t think you need to go through the whole filing process to create a company.   That’s something that can wait until you’re making a decent amount of money.  Ask your CPA if you want a more accurate number.  You can keep it simple.  What you really need is separate accounts and separate bookkeeping.

Start with setting up separate accounts for the business funds to flow into.  You’ll need your own business savings account. Add a checking too if you think you’ll have need of a debit card or actual checks to write out.  I’ve got a checking account and several savings accounts set up that are used solely for the business funds.  If you’re not going to use the business account debit card for online purchases (it’s probably safer not to), you’ll also want a credit card that is used only for business transactions.  Again, it doesn’t have to be in the business’ name, it just has to only be used for business use.  I use one that has a 1-5% cash back feature to save a little extra on expenses.

When it comes to keeping your books, you probably don’t need anything too fancy for your personal accounts.  Just enough to create your budget, and keep track of accounts.  For business, you really need something a little bit more.  I prefer a full on business accounting software.  There’s a couple out there, and you can probably pick one up cheap off of eBay.  They’re a little more complex than the software created for personal accounts, but I like the detail the complexity gives me.  Maybe you can get by with a robust spreadsheet.  But, something that you can use to give your CPA (even if that’s you) a full detail of the profit/loss of the company including all sources of income and expenses.

It may sound a little difficult, but it’s not any more difficult that it would be if you didn’t separate them first and then tried to separate them after you need to.  You’ll thank yourself later.

Weemba: Loans 2.0

The following post is sponsored, and I am being compensated to write it. That doesn’t change the fact that I’m doing a review, and it will be honest.

When I was first asked to do a review of Weemba, I’d never heard of it.  (See? Honesty!)  As any good reviewer will do, the first thing I did was try and figure out just what it was that I was to be reviewing.  I’ll extrapolate later on, but here’s how they put it in a recent press release.

Weemba revolutionizes the way borrowers and professional lenders connect via an online financial platform. Weemba provides, by means of unique proprietary methods and state-of-the-art safeguards, a virtual way for borrowers to post their needs and for lenders to then find those borrowers.  Protected by a nickname, borrowers post project profiles for lenders to review; interested lenders ask borrowers to access their private information, and if granted access, can contact borrowers directly. Weemba facilitates the borrower-lender interaction without interfering in the negotiation process.

It sounded a bit like a peer-to-peer solution, which, as I’m sure you’ve read, I’m a fan of, so I figured I’d give it a review.  (Doesn’t hurt that I was paid to do it too.)

Sign-Up

Signing up for Weemba was pretty easy.  In fact, if you so choose (I did.), you can sign up using your Facebook account.  You create a Community ID which will be used for their forums and support, and give them the necessary personal details.  If you’ve ever filled out a loan application, you know what I mean.  Name, address, SSN, etc.  There’s also the multiple-choice questions that they pull from your credit info (from Equifax) to verify you are who you say you are.  That’s it.  Fill in the info, verify, and you’re off.

Adding a Loan Project

Once you’ve completed the sign-up process, you’re taken directly to the loan project creation page.  You’re asked to choose between a personal and business loan type.  I chose personal, but they do have the system in place for both.  I advance through, and then get down to the nitty-gritty of the loan project.  Give it a name, tell the lenders what type of loan it is, how much you want, what amortization method you’d like (Installments, Balloon, or Lump Sum), the desired length of the loan, funding type (Full funding only or partial funding accepted), and then are given the option of adding your Equifax Credit Score.

I balked a bit here.  If you know how the credit score programs from any of the credit bureaus normally work, you’re usually signing up for a free trial to their credit score monitoring service that is followed by a paid service.  There wasn’t any mention of whether it really cost me anything or not, so I read the Terms and Conditions.  There, it does mention that some of their services do cost a monthly fee, but doesn’t mention any of the services by name, so I still couldn’t be sure.  Later, I looked in the FAQs and it does mention there that it’s “no cost”, but with no further details.  I don’t see any way around adding your credit score to a legit loan project, so if you’re adding one to seriously pursue a loan, you’ll need to do so.  I wasn’t going to publish the loan project, so I didn’t add the credit score.

Once you’ve gotten the credit score added, you get a chance to add details of the loan, some secure info (contact and some advanced qualifiers for their search engine), create a forum for your project, and then add an Avatar or videos to the loan project.  The avatar will be displayed in their search results, and on the rotator on their home page.  There’s also a “W-SEO” score added to the end.  From what I could tell, it looks to be a ranking of sorts based on how much info you filled out, and is dynamically updated after the loan is published with info on conversation, ratings, etc.

What I Think

For a company that claims to revolutionize the way “borrowers and professional lenders connect”, I saw a lack of any major revolutionary ideas.  Essentially, they act as a loan broker.  They do it online, so maybe that’s the revolutionary part?  I kind of thought that Lending Tree did that ages ago, no?  Or, maybe it’s the search combined with some decidedly social aspects?  I’ll give them that.  Sites like Lending Tree basically pull your info and then spit it out to some local lender that you’ve matched with, so giving the lenders the ability to search for some quality borrowers while giving the borrowers some social tools is a good step up.  I’m just not sure that it deserves the revolutionary PR jargon. They broker the loan, by facilitating the connection.  Once the connection is made, it’s handled privately between the borrower and the lender.

Overall, Weemba looks like a good service that will fill a need both on the borrower and lender side.  I’m a big fan of peer-to-peer because it gives the borrowers to make a case for themselves.  Something that Weemba does too.  I couldn’t find any information on who the lenders are, or if there’s a process for becoming a lender, so I’m assuming that it’s mostly institutions.  Still, a good service, that will allow borrowers to find some competitive offers for their lending business.

If you decide to give Weemba a try, here’s a few things I’d make sure to do to better your odds of finding a lender.

  • Be honest.  If there’s a story behind your debt, or the reason for the loan, share it.
  • Add a credit score.  I don’t know a lender that isn’t going to hesitate if the loan project doesn’t have a credit score.
  • Add a good avatar.  Even if it’s a picture of the car you want to buy.  A picture is going to help you. Same for video if it applies.
  • Answer Questions.  If a lender asks a question, or needs clarification, answer it promptly.

What do you think?  Would you give Weemba a try?  Why? Why not?

Starting a Business? Read This Guide!

One of the best ways to break out of the daily grind, and do something that you really enjoy, is to start a business.  You’ll likely work twice as hard, but because it’s something that you love, you’ll enjoy every minute of it.  When my wife quit her job, she could have used a lot of the advice that is contained in the guide I’m about to share with you.  There were lots of questions about the structure and methods that are necessary to starting a small business.  Luckily, if you’re starting a new business, you can read the guide and cut through some of the learning process.

The guide I’m talking about is one that has been put together by my friend, Eric, from Narrow Bridge Finance.  It’s free.  All you have to do is have an email and sign up for his newsletter.  He’s a stand-up guy, so your email is safe with him, and all you’ll get is some really great information about starting a business and personal finance.

So, go over and sign up for the newsletter and get your copy of the Starting a Small Business guide.

The guide is 16 pages long, and covers everything from developing your idea into a business to increasing revenue and income, to the proper ways to exit a company you’ve started if that’s what you want to do.  It’s not all-inclusive (that would take a couple hundred pages), but it is a great start on your way to starting a small business.