5 Reasons every barber or hair stylist should have a business bank account

Being told to have a separate business bank account from your personal account is one of the first things you’re ever told when starting a business. And even though everyone’s heard it, not everyone is doing it. I have a self-employed barber I’m working with now who went through my ‘B2P Wealth’ Course and while he finally started his separate business checking accounts (woohoo) he needed the last 3 years cleaned-up because his money from barbering was going directly into his personal bank account.

So, for those of you who are running your business from your personal bank account, here are 5 reasons why you should separate them today:

#1. Ability to have clarity on income the business is generating – the barber I’m working with has multiple streams of income, so we had to spend time separating income from the various sources. When you have a separate business bank account, you avoid income streams from different businesses confused. I’m not talking about money from different services, but completely different businesses.

#2. Ability to project cash flow by looking at similar months in the past - it’s natural for businesses to have low and high months in you’re working in the hair industry. By having your separate business bank account, you can use prior months to project cash flow in coming months which can be extremely beneficial so you don’t run out of product or inventory.

#3. Ability to avoid overspending when buying personal items – when you’re making personal purchases using a business bank account, it’s easy to think you have more money than you do. In that moment, you forget about the business expenses that money is supposed to cover.

#4. Ability to establish a clear audit trail in case you’re ever in an audit – this one speaks for itself, but yea…you don’t want to fumble through expenses when you’re been selected for an audit.

#5. Ability to generate financial reports – the 3 major financial statements every business should be reviewing monthly are the balance sheet, statement of income (P&L) and statement of cash flows. With co-mingle funds, this becomes more complicated than it needs to be for generating these reports

In the video I also came up with another reason, so I actually had 6 instead of 5 reasons:

#6. Ability to file taxes easily without separating personal items from business expenses – I’ve worked with a lot of business owners at the tax table going through folders of receipts. Annnd, all I have to say to that is “aint nobody got time for that”.

I hope these reasons encourage you to finally take the leap and open that business bank account you’ve been meaning to open. 🤗

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ABOUT ME (JENN)

Before starting my own business coaching and accounting firm I…

Grew a struggling hair salon to a multi-6 figure business in 5 years
Spoke to cosmetology students on the business side of the hair industry
Worked as a tax analyst and specialist at HR Block Small Business Advisors
Distributed hair products to hair salons and barbershops along the East Coast
Created a product line and online hair product eCommerce store
Imported hair products from the Dominican Republic
Received my degree in Economics from the University of Maryland at College Park

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DISCLAIMER

This video is for informational purposes only and may not be accurate for your unique situation. Before applying anything stated in this video, please consult with your tax advisors. For unique tax situations, please consult with your tax advisor. Thanks for watching!