My 2nd company taught me that business is feast or famine. Smart businesses use banks as financial partners to survive the famine cycle of business. Unfortunately, during my 14 years of owning Newman Networks, I didn't implement the process of putting myself on payroll. I assumed that I needed to make $250,000 before I could implement a payroll system. My latest company, Innovative Capital and Consulting Group LLC started with an independent agreement contact with LYFT and the business expenses of a "company" vehicle. This time, I am determined to improve business processes with payroll in the beginning. I know the success of this company is dependent on the owners' financial discipline. On my wealth building journey, I stumbled across the book, "Profit First" by Mike Michalowicz . Mike simplified business in financial terms that are easily understood. "Profit First" is the same wealth building concept as "Pay Yourself FIRST". In this company, I EXPECT that the business, even in start up mode, should sustain the business owner. In the 2 years since I started the company, profiting first has not always been the case. Systems and processes should be in place anyway so the company CAN pay the business owner, set aside profit and still reinvest income in marketing strategies. The book STRONGLY suggests finding two local banking partners to implement the "Profit First" system. Well, that is easier said than done! I have been looking for banking partners for 5 weeks now.
This is what I learned about the community banks called credit unions:
1) Philadelphia Federal Credit Union - advertises free checking but charges a $10.00 monthly account fee on balances less than $100.00
2) American Heritage Federal Credit Union - no minimum fee for business accounts. This credit union can set up multiple sub accounts as per the profit first system and can work with any business registered in the United States
3) TruMark Financial Credit Union - will only work with businesses registered in the state of Pennsylvania
4) Police and Fire Credit Union - while PFFCU lists business accounts on the website, PFFCU does not offer business accounts to members.
6) Sun East Federal Credit Union - The associate who opened my account informed me that there is a $10.00 monthly fee on balances under $1,000. This information is not listed on the website
Only 1 of the 6 local credit unions fit my need. The banking industry is ripe for a technology takeover. The banking industry is very PROFITABLE. According to MX, "The largest bank - JP Morgan Chase generated revenue of 36 Billion in 2019. Wells Fargo, the 2nd largest financial institution generated revenue of 20 Billion in 2019. The third largest financial institution, Bank of America generated 27 Billion in 2019 and the 4th largest bank, Citigroup, generated revenue of 27 Billion"
The investigative search to find a community partner led me to search the internet for business banking partners with no minimum balance. I like to learn from the research of others. The Google search stumbled across this website "10 Best Business Bank Account of 2021" Why reinvent the wheel when another entity has completed the research? I chose http://www.bluevine.com as my 2nd community bank.
With my 2 business bank accounts on hand, I am ready to implement the "Profit First" system!