Banking and financing: foundations of a business

So, I found out that I did well on my degree. I am no longer a student. The wolf will at some point in the not too distant future be at the door. Now is the time to put the first stages of my longer term business into play. While I’m not yet printing leaflets or putting up my website (which I have had ready since February), the most important thing at this stage is to A) keep accounts and B) have somewhere to stash any earnings.

The keeping accounts is essential to any business really. The format I have chosen is a ledger format with columns for incoming and outgoing money, and summaries at the bottom of each column. Notes to be made of where money came from/went to. At the end of each month, a reconciliation sheet will be done to summarise what came in, what went out and where the money is (I.E. cash box, bank account, etc.). This is simple small business management really.

The more interesting thing however was deciding what to do about banking.

I have rather an aversion to the big banks. They ran up huge bills by acting like a child who had stolen his father’s credit and was pretending to be the big man. They got the nation into hock for godknows how much and shamelessly carry on with their dangerous attitude. So I don’t like the banks. If the government had treated them in the same way as the banks treat their clients, they would have been given overlimit fees, late payment fees, godknows what. But no, as it was a matter of national security and the nation’s economy, out comes the public cheque book. Plus, the banks have decided that the community in which I live (Rural North Wales) doesn’t matter. What used to be the midland bank, and is now HSBC has closed their smaller branches across North Wales. Examples being the branches in Nefyn (which is near Cae Non) and Penygroes (which is a mile away from my home). Why should they care about such small branches? After all, they’re the Hong-Cong and Shang Hai banking corporation. Good. Let them stick to their home market. A more important question is, why should the residents of Gwynedd care about such large foreign companies! Why should they manage our money and have the rewards from doing so?

My personal banking is with the Nationwide building society. I like the mutual arrangement in the way their business is managed. However, I didn’t want to mix my personal finances with business ones, as it would make a financial spaghetti plate of my finances, and at this stage I want to be able to re-invest incoming money into the business and accumulate stock.

Then I remembered that I have a dormant account with the local credit union¹, who have desks in various public places across the region, community centres, libraries, etc. I wasn’t using the account, and it made sense to use the account for the business as A) it was already set up, and B) the credit union is run to a far higher ethical standard than most banks, etc. Member’s savings are used to provide low-interest loans to local residents, and the credit union is only open to those who live in the North Wales area. They focus on helping locals to learn useful life skills, and manage their money effectively, etc. In other words, they are interested in helping the community to function without resorting to loan-sharks – some of whom wear black leather jackets and bother boots, some of whom wear suits and ties (I’m looking at you Wonga, and similar).

So, I made my first deposit from my first ‘official’ earnings for the business to my credit union account where it is now bettering the local community till I need it (to buy stock or whatever). I will use my accound as I would use a normal bank account, and if I need to borrow money to buy stock (which I might as I will need to buy in some herbal products, and they’re expensive), I will borrow it from the credit union rather than buying on my credit card or getting a bank loan.

It is my goal and intent for my new business to use such local providers, and ethical businesses wherever possible. As practitioners of a healing profession, which aims to make health and wellbeing accessible to all, supporting greedy institutions who are the instruments of people being ill and downtrodden in the first place makes no sense. By supporting businesses that benefit local people, I am directly helping the health (both economic and physical) of the local area and residents.

1. For those interested, see: http://www.northwalescu.co.uk/en/