Do I Need A Separate Checking Account For My Etsy Business?

I recently had a reader ask me “Do I need a separate checking account for my Etsy business?” The answer is “YES!” And it doesn’t matter if you are selling items through Etsy, one of the Etsy alternatives, through craft shows or your own website, you should definitely have a separate checking account.

For starters, this will help you during tax season. It will be much easier to tally your business expenses when they are limited to once account. This will also help you create a steady income and create opportunities for paid vacations!  For example, let’s say that you need to earn $1200 per month (or $300 per week) to cover expenses, and that you would also like to take a 2 week vacation in the summer and a week off during the holidays in December.

There will be months throughout the year where you earn more than $1200. Instead of looking at that as an unexpected bonus and spending it, keep the extra in your checking account. Each week, pay yourself $300 as normal. Keep stashing the extra amount you earn, and when you have a week where you don’t earn $300, you can use your extra amount to cover that loss. You can also use the extra stash to pay yourself when you are on vacation.

By having a separate checking account for your business – Etsy or otherwise, you will be able to create a much more stable business.

Related posts:

1. How to Use Etsy or eBay to Bring in More Customers
2. Read my article on Etsy! (using Father’s Day to increase sales)
3. Drawing The Line Between Business and Personal In Social Media
4. Great Tool For Service Based Business & Outsourcing
5. Health Insurance Options For Indie Business Owners

Tags: business finances, etsy, Etsy business

Category: Managing Your Biz