Banking on success
One of the smartest things you can do as your webcomic starts to transition from hobby to business is to establish a new bank account for your burgeoning venture. Keeping comics finances separate from your household income has several benefits. Here’s what you need to know…
Doing Business As
A DBA is an important part of establish your business as a standalone entity. The acronym stands for “Doing Business As,” and it is a legal document that says, “When you see XYZ on a form, that’s really John Doe doing business under that business’ name.”
Registering a DBA varies from state-to-state. Most of the time, however, it’s a document filed either with your County Clerk or your state government. Your CPA can help you navigate those waters based on where you live.
Sole proprietors (as well as corporations and LLCs) may set up a “DBA” to indicate on forms and legal documents that the activities in question are being handled on behalf of a business — and not necessarily an individual’s concern.
Not all states require the filing of a DBA. But if it is available where you live, it’s an excellent first step in separating your business affairs from your personal ones.
For more information on registering your business with your state government, please use this helpful resource.
Separate your money
Once you’ve established a DBA, open a business bank account under your DBA. Be sure to express to your bank that you’re interested in opening a business account. There are several tools and features that may be available to a business account that the bank doesn’t offer to personal accounts.
Once you’ve opened your business account, keep your comics money — both income and expenses — dedicated to that account. Keep personal money, such as income from your day job and household expenses, to your personal account.
It’s a huge help at tax time, when you need to quickly tally your expenses and incoming revenue for the year. Not only can you total those values quickly, but you can itemize them easily to make deductions manageable.
And later, when you’re ready to take bigger steps (such as forming an LLC), this dedicated bank account will help you establish a solid history for your business — for loans, studio leases, etc.
And if your bank offers the option, you can open a third account — just for savings — to make sure you’re putting away enough money every month to meet your estimated tax payments.
Where to bank
Credit unions and small banks can often be your best bets — for low fees and good customer service. But if you travel frequently — for conventions, for example — you may decide a larger bank (with several ATMs nationwide) might be the better option.