My wife and I used to run our own business a few years ago. It was amazing how much work went into getting the business started. My wife took care of most of the administrative work, but she sent me on a lot of trips to the banks to try to set up business loans and business credit cards. One of the smartest things that she did was to insist that we incorporate in order to protect ourselves from personal liability in the advent of lawsuits. I was frustrated when I learned how much money it was going to cost to set up all of the different insurances and register the corporation with the state.
One thing that I never really understood, though, was why my wife told me that we didn’t need any business lines of credit. She kept telling me that she didn’t want to have to pay the annual fees associated with having lines of credit. And she didn’t want to do the paperwork and write up a business plan. So I went ahead and signed up for one (yes, I ignored her advice.) When the statement came in showing our annual fee, though I was quite upset to realize she was right and I ended up closing the account. Lesson learned here is to really pay attention to the annual fees for any kind of credit account or loan that you might get. You might not really need that account!