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What to know about setting up your business banking

Active-duty service members or spouses who want to work a side business need to check rules established by the DOD. Photo by olia danilevich from Pexels.

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Ready to strike out as a business owner? Whether it is a store, online business, or freelance gig, you will want to get the banking element of your new career set up right from the start, said Craig Doty, Business Money Management Coach with Harborstone Credit Union.

Doty says there are several things you'll need to open an account, but the first decision will be the structure of your business. It's time to decide if you want to be a corporation, limited liability company (LLC), sole proprietorship, or something else. Don't know? Start here to make that important decision:

Now that you know, a quick call to Harborstone at (253) 583-9727 will inform you of the documents you'll need based on the structure you choose. These can range from board minutes and articles of incorporation to a tax ID number or other easy forms.

Choosing where to bank is worth some thought as well. Many small-business owners prefer a community bank or credit union because they've built a relationship with their banker, which can come in handy when problems arise or when they need a little extra support.

"Businesses like to bank with credit unions because they are members, not customers," Doty said. That usually translates to lower fees, because instead of profits and shareholders, a credit union returns its profits back to members in the form of support, lower interest rates, and lower fees.

"It is also our job to help business members reach their full potential," Doty added. They do this by having coaches like Doty for free, available for advice and resources.

"We make a point to learn about your business and help you plan for the future," Doty said.

Ready to start?

For military spouses and service members, the growing online business environment, such as Etsy, and the current gig economy provide an opportunity to earn some extra income. This work also offers flexibility and independence that you may not find in traditional or part-time jobs. Whether you make tea towels, walk dogs, or drive for a ride-sharing service, your alternate business could move with you when you PCS.

As with any employment, there are pros and cons to working in the gig economy. Also, the military has specific rules for service members working off duty and for spouses operating a business on a military installation. Here are some things to consider when deciding whether a gig economy job can work for you.

Department of Defense rules for side work

Active-duty service members who want to work a side business or gig job must follow rules established by the Department of Defense. You may want to see if your service branch has its own rules governing this type of work. There are also requirements for spouses who want to operate a business while living on an installation.

Service members:

  • Start by consulting the Outside Activities section of the Ethics Counselor's Deskbook. This gives you the DOD's basic rules for off-duty employment.
  • Get permission from your command. Start with your supervisor. You will also need your commander's approval, and you may need your local legal office or ethics office to sign off. They will evaluate your request to make sure your side job does not:

    • Interfere with your military duties, since the military could potentially call you to work at any time.
    • Impact your safety or the safety of those in the military community. For example, you shouldn't do a job that makes you miss out on sleep.
    • Violate the military's ethical standards. For example, you can't work for another federal agency while you are on active duty.

Military spouses:

Spouses who want to operate a business while living on an installation must meet certain requirements:

  • Register your business with the installation housing office and receive a permit to operate.
  • Get state and local business licenses if required in your location. If you plan to offer in-home child care, you may need to become a certified family child care provider.
  • Register with your state as a business entity, such as sole proprietorship, partnership, corporation, or LLC, if required.
  • Learn about the policies on advertising your home business on your installation. You may not use the military postal system for commercial purposes.
  • Follow the Status of Forces Agreement rules between the U.S. and your host country if you are OCONUS. Some countries place strict limitations on the type of business you may operate.

Military OneSource contributed to this article.


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