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How to do business

Many entrepreneurs are so busy and focused on “stuff” and “the details” of the business they forget that businesses require processes and routines that ensure stability and growth. Thought must be given to your company’s principles and practices before you try to do to much. It takes time initially to set your business up and then to constantly tweek everything but it’s always time well spent. For instance, the next section is on setting up a bank account. You have to take it a step further and decide things like ordering checks. Will they be computerized? One of my clients set up 2 bank accounts on his own, ordered the checks from the bank and paid over $400 for checks he could have bought for less than $100. What about accepting payments? Online banking? I’ve seen way to many situations where little or no thought was given to how to actually process transactions, keep records, hire employees, etc….And this is where many businesses can stray off course.

Setting up a bank account: I don’t take anything for granted anymore when it comes to the steps needed to do business, correctly. You should not use your personal bank account to do business in, even if your a sole proprietor. If you have to use a personal account set up a separate account you only use for business. I’ll explain why in Issues below.

Setting up a bank account

Setting up a bank account may seem like a simple requirement but since 9/11 and the massive problems with identity theft you need to go into the bank armed with all the right documents. What you need to have will depend on 3 things:

  • the state your in
  • the banks policies
  • the individual setting up your account

It’s always good to call ahead and speak to a manager to find out which documents you need. Besides the Articles of Incorporation some states require other registrations such as a list of shareholders. Sometimes the bank will ask for these additional documents, sometimes they won’t. I have seen clients open accounts with just a picture ID and then some have spent hours trying to get items like:

  • Corporate resolutions – most banks have blank corp resolutions for opening a bank account but the individual opening the account for you may not realize it.
  • List of shareholders
  • Articles of Incorporation – in NYS they are accessible online yet some banks in my area want to see the document. Again, I believe this depends on the individual opening the account for you.

Corporate Meetings, Minutes and Resolutions

Documenting business activities and major decisions is not only a good business practice most states require corporate minutes to be kept.

Corporate Meetings - How to do business

Corporate Minutes is a document that states such items as:

  • A review of the last meeting
  • Date, time and location
  • Who attended
  • Agenda and topics discussed
  • The results of any votes
  • Time meeting was adjourned

It may seem ridiculous to have a board of directors meeting with yourself but that doesn’t mean you shouldn’t do it. If the state say’s it’s a requirement then you should do it. Additionally, a single shareholder can appoint a board of directors and any meeting with the board must be documented. I’m not an attorney but I do know that many times in lawsuits attorneys attempt to “pierce the corporate veil” meaning that the corporation was not operated as a corporation so therefore there is no limited legal liability.

Corporate resolutions document a specific action approved by the board of directors. Sometimes you need a corporate resolution to open a bank account. Most banks have those resolutions on a template. The information included in a corporate resolution should include all of the pertinent information about the action.

Business Journal: I keep a business journal in which I can keep my Corporate Meetings and Resolutions. It’s more than a daily planner because I also use it as a petty cash journal, tasks, calendar, etc…… You don’t have to go crazy trying to create and figure this stuff out. If you look at the information contained in these documents it’s really no big deal, as long as it becomes part of your routine.

Other Important Business Issues

Co-mingling: This is the practice of mixing your business transactions with personal transactions. You want to try to keep everything as separate as possible for legal, tax and reporting purposes. This includes other businesses you may own. Try to use one credit card for business only. When personal items such as grocery stores, drug stores, nail salons, clothing shops…appear in an audit red flags go up. It’s not illegal to do this as long as you clearly categorize it as a distribution or loan repayment and not a business deduction. Co-mingling is a very poor business practice so try to avoid it.

 Payroll Compliance: Unfortunately the government has made business owners their unpaid police agents. We are responsible for vetting out undocumented individuals and remitting court ordered payments assessed on our employees. If we don’t follow strict rules and procedures bad things can happen.

Independent Contractors: This is one of the biggest topics of debate for IRS, Social Security, Departments of Labor, Insurance and many other agencies looking to drum up additional revenues. The issue is simple. When businesses pay independent contractors the compliance issues fall on the independent contractor. Filing tax returns,  paying social security and income taxes, unemployment insurance and workers compensation and liability insurance. Many independent contractors don’t follow the rules costing the government billions of dollars every year. The IRS starts with the actual nature of the relationship, many times reclassifying independents as employees. This has many negative consequences, mainly for the business owner that paid the independent contractor. We will cover this in more detail in a later section.

Insurance: You can not hire an employee before you have workers compensation. If you do and the worker gets hurt you may be personally responsible.

Sales Tax: If you are required to charge sales tax you must be registered before you do. Depending on the state getting authorization may take weeks. Sales tax is becoming another hot button for politicians for the simple reason that billions of dollars are being lost through Internet sales.


Joe DiChiara CPA offers Small Business Advisory Services to passionate entrepreneurs that want to Start, Build and Manage a small business successfully. He enjoys being an “Out of The Box Thinker” and has helped thousands of small business owners start, build and manage their own business. In 2009 Joe discovered a new approach to business through “The Science of Getting Rich” written by Wallace Wattles and the inspiration behind the movie “The Secret”.

After successfully applying the SOGR principles as well as Napoleon Hill’s “Think And Grow Rich” to his own business, Joe discovered that there is a large market segment that is being overtaxed, unprotected and unfairly targeted by IRS. Every year over 3,000,000 entrepreneurs start businesses unaware of the dangers of operating as a sole proprietor with over 25,000,000 in the process of going bankrupt.  This discovery inspired Joe to develop programs, tools, and resources to help stem the tide of these avoidable small business failures.

Currently, Joe is building an online school for small business owners and which will help entrepreneurs create the books and records needed to survive any tax audit. 

Joe is a #1 Amazon Best-Selling Author and you can Check Out Joe’s Books on Amazon by clicking here!


 Do you have great business ideas but don’t know exactly where to start? Book a free 30 minute chat with me. All you have to do is CLICK HERE NOW!