business plan for private banker

Private Banking Business Plan [Sample Template]

By: Author Tony Martins Ajaero

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Do you want to start a private banking service and need to write a plan? If YES, here is a sample private banking business plan template & feasibility report.

Whether you have decided to enter the financial markets directly as part of your integral business plan, are a smaller private financial institution that has outgrown your licensing boundaries, or are experiencing operational inefficiencies or restrictions with your current financial license, you are likely wondering how to move forward and start a private bank.

When you start a bank, your financial company will have an almost limitless array of possibilities to take advantage of. Financial companies in different situations (including FX, wealth managers, family offices, IB, M&As, FAs, IAs, payment processors, or fund managers) will at some point in their lifecycles find it necessary or desirable to grow beyond their current licensing limitations.

For many such businesses, the natural way to move forward is to obtain or apply for a bank license or register a new private bank from the ground up. Private Banks raise capital through a private stock offering to accredited individuals who meet onerous financial requirements related to their net worth and annual income.

Although privately-held bank stock is not publicly traded, there often is a healthy secondary market for it, engineered by boutique investment banks that focus on small bank stocks and even new hedge funds that invest in de novo banks.

Private Banks earn high returns on assets and equity, and typically are managed conservatively by executives with strong ties to the business community. A small number of non-accredited investors, usually people with personal relationships with insiders, are allowed to participate in the stock offering as well.

The apex control for private banks are the Board of Directors, who appoint the bank’s executive management and oversee the regulatory compliance function. Note that this requires monitoring capital adequacy levels and ensuring the bank never deviate from the FDIC-approved business plan.

If the bank’s directors want to make changes to the bank’s funding structure or expand lending activities, prior approval must be obtained from the FDIC. Regulators typically require that de novo banks exceed capital requirements, understanding that it often takes roughly three years for new banks to achieve profitability.

In the united states, Deposit Insurance Corporation membership is mandated for all banks, and all FDIC requirements must be attained before the new bank commences operations. The Interagency Charter and Federal Deposit Insurance Application must be filled, submitted and shared by the FDIC with all relevant regulatory bodies.

Coupled with the application, the applying bank must submit a mission statement, a business plan containing three years of projected financial statements, and policy descriptions for loans, investments and other bank operations. Note that completing these requirements can take hundreds of hours, and often requires engaging financial consultants.

A Sample Private Banking Business Plan Template

1. industry overview.

In recent years, private banks have experienced a period of growth. For many universal banks, the segment has therefore become undeniably crucial. At the same time, a closer analysis of financial results and the major drivers of sector performance points to some fundamental challenges in growing the top line.

Nevertheless, few banks have outperformed the competition and offer some best practice examples. According to reports, any growth in assets under management (AuM) generated by private banks over the last three years has mostly been driven by favourable market performance rather than new business.

Of the 6.2 percent average compound annual growth rate (CAGR) between 2015 and 2018, 4.0 percent was accredited to an increase in asset value. Simply put, only approximately one third of AuM growth was self-generated. Much of this self-generated growth has been achieved inorganically, and this is certainly true for three out of the top five performing banks.

In Europe, Switzerland and North America, mergers and acquisitions (M&A) activity contributed to double-digit growth for a number of banks. Chinese private banks have been an exception to this pattern. In their case, unprecedented rates of wealth creation made organic growth possible.

According to reports, the wealth of Chinese billionaires increased by 39 percent in 2017 alone, with two new billionaires created each week. Even with the favourable market performance, many banks were not able to maintain their revenue margins.

What stood in their way were pressure from low interest rates, stricter regulation leading to the elimination of certain revenue streams and a drive for greater price transparency, and a changing portfolio composition with more assets falling into higher wealth buckets (with lower revenue margins).

North American banks lead the way on revenue margin, and are even able to capture double the revenue of Swiss and European banks on their AuM. Their success can be mostly put down to higher interest rates, more transactions and higher absolute price levels.

Highly capitalized and growing US and Canadian banks may put additional pressure on Swiss and European competition if they continue to pursue international expansion in the region.

2. Executive Summary

Octagon Private Bank (OPB) prides itself as being one of the most customer focused private banks in New York City. With our luxurious atmosphere and high standards of service, our Private Banking experience is unsurpassed. Each client is treated as a prestigious partner with the utmost respect and concern.

We always strive to ensure the bank’s comprehensive financial and investment services are carefully crafted and put into effect for our client’s unique needs. Our selection of diversified investment in both broad and specialised markets enables us to manage private investors with the same proficiency available to large pension funds and corporate investors.

We also help private clients create a plan that optimises the use of their money by advising them on a selected number of products and help them get where they are going faster.  Although some clients prefer to make their own investment decisions; others are more comfortable receiving professional guidance. Whichever approach they prefer, we at Octagon Private Bank (OPB) are here to help.

At OPB we will offer investment packages, underwriting, proprietary trading, and investment management for our clients.  New York City is beneficial for several industries. Relatively low energy cost, accessible resources, north–south and east–west Interstates, international air terminals, and both west coast intercontinental railroads are all economic advantages.

OPB will be formed as a Limited Liability Company with the sole purpose of serving our clients excellently. Once we land a client, their own financial and investment aspirations, preferences and needs are effectively in control and will be the focus of the bank’s assigned and highly dedicated Associate.

Private banking at OPB is a secure haven, where clients’ dreams and ambitions set the target, their special needs decide the right tailored solutions and their financial status dictates the most appropriate financial planning leading to their targets.

To secure a financial future for our clients and their family, OPB will offer financial advice on a broad range of issues affecting the way the client live at the present and the way they want to live in the future. Clients with substantial wealth often have unique and sometimes complex borrowing needs ranging from basic credit to more sophisticated tax-optimisation strategies.

The Bank Associate coupled with a bank designated Analyst will guide our client to the solutions that best fit their needs by offering completely versatile credit products like specially structured finance with privileged terms and conditions.

3. Our Products and Services

At OPB, our services are designed for high net worth individuals and families. We offer clients professional guidance to protect and enhance their wealth. We provide them with tailored, unbiased advice and investment services – ranging from asset management to estate planning and from cash management to business planning.

It is the nature of things that with more wealth accumulated, more options, obstacles, and challenges are faced. As multiple factors are incorporated from agents to advisors, there is a need for a cohesive force to bring it all together. OPB can greatly simplify the management of client’s complex finances.

Leveraging a team of experts, we provide an objective and holistic analysis of our client’s personal financial situation that is tailored to help them grow and preserve their wealth. Octagon Private Bank will be set in a way to offer a personally tailored solution in five key areas of wealth management:

• Investment planning and asset management
• Wealth protection
• Credit planning and management
• Cash management
• Business planning (Private business owner)

4. Our Mission and Vision Statement

• At OPB, our vision is to grow into a large investment and private bank that that will provide investment advices, wealth protection, dividend income, asset and cash management, and interest income to our clients.
• Our mission at OPB is to ensure that investment decisions are implemented quickly and efficiently across all portfolios.
• To also make sure a trading research and rotation is used to avoid any type of systematic advantage or disadvantage an account may experience.

Our Business Structure

From our detailed research, we understood that for a new bank charter to be approved for us, all our senior management team are expected to have substantial experience in the banking industry.

Howbeit, all members of OPB board of directors are individuals with successful careers in a mix of business, banking, and other fields, and have representation in the necessary disciplines for the board to meet its responsibilities. We also understand the role of the board and management as investors in the bank and how important they are.

Regulators and other investors will look to the investment of these directors and senior officers as an important sign of their commitment to the bank. Knowing that a typical private bank is operated in a rigid way, more than most corporate or financial institutions, we have decided to start with the listed workforce.

Managing director

• Senior vice president

Vice president

Bank Associate

Bank Analyst

• Marketing manager
• Security man

5. Job Roles and Responsibilities

• Broaden and/or enhance the bank’s industry coverage
• Partner with the leadership to grow and build the bank
• Tirelessly work to deliver superior results to the bank’s clients
• Participate as a key member of the senior leadership team, contributing to the strategy, growth and success of the bank
• Lead efforts on sell-side and buy-side acquisition assignments, refinancing, recapitalization and restructuring assignments
• Interact seamlessly with prospects, clients, acquirers, investors and attorneys on all aspects of a M&A deal and/or capital raise
• Direct a team of junior bankers to support all elements of deal sourcing and execution

Senior Vice president

• Involved in executing and managing the actions in equity offerings that will include the drafting and structuring of material, logistics management, issue identification, its analysis and the resolution.
• Responsible for mergers and acquisitions and manages the creation of buyers list, their contacts, drafting the relevant material, financial analysis and management and is involved in private equity placement.
• Researches and identify deal opportunities by formulating and issuing factual financial analyses and creating different kinds of financial plans.
• Involved in pitching or selling the organization’s products and services to the new clients and may be involved in other projects as well.
• May participate in due diligence meetings with non-proprietary or proprietary investment managers and create relevant call reports that include their opinions.
• May be involved in analysing the investment products and screening them by making effective use of a variety of investment data and the relevant software applications
• Monitors the investment products and their performance.
• Analyses the relevant statistics to evaluate the appropriateness of the product.
• Manages relationships with the investment management organizations and regularly gets him/her updated by getting valuable information from them.
• Responsible for providing leadership and overseeing the work of subordinate members.
• Call on prospective clients such as privately held business owners, publicly traded companies and private equity banks.
• Conceptualize, organize and deliver new business presentations.
• Lead transaction implementation across industry groups.
• Manage, educate and develop private banking analysts and associates.
• Develop marketing and new business presentations.
• Monitor financial analysis and modelling.
• Perform and analyse industry research.
• Create client presentations, proposals, engagement letters term sheets, legal agreements and offer memorandums.
• Coordinate internal resources and train and develop junior resources.
• Create and foster client relationships.
• Managing and assisting in the preparation of financial models and business valuations
• Creating client marketing presentations
• Attending client meetings
• Conducting industry and company-specific due diligence related to transactions
• Drafting memoranda for sale assignments
• Assisting in the preparation of fairness opinions
• Attending drafting sessions for equity offerings
• Creating marketing materials for our equity sales organization
• Assisting in the development and continued cultivation of client relationships
• Developing an understanding of the underlying trends that affect equity capital markets
• Gaining an understanding of the interests and investment criteria of a number of middle-market private equity banks
• Development of various types of financial models to value debt and equity for mergers, acquisitions, and capital raising transactions.
• Perform various valuation methods: comparable companies, precedents, and DCF.
• Develop recommendations for product offerings, private equity transactions, mergers and acquisitions, and valuations.
• Conduct preparation and review of materials used in the financing of clients, including investment memoranda, management presentations and pitch books.
• Develop relationships with new and existing clients in order to expand the business.
• Perform due diligence, research, analysis, and documentation of live transactions.
• Create presentations for client portfolios.
• Affinity for current events, critical issues, and relevant news.

Sales and Marketing director

• In charge of organising external research and coordinating all the internal sources of information to retain the organizations’ best customers and attract new ones
• In charge of creating demographic information and analysing the volumes of transactional data generated by customer purchases
• Expected to understand, prioritizes, and reaches out to new partners, and business opportunities et al
• Tasked with understanding development opportunities; follows up on development leads and contacts
• Keep all customer contact and information
• Represents the company in strategic meetings
• Aid to increase sales and growth for the business
• In charge of the cleaning of all OPB floors
• Keep note and make sure the toiletries and supplies don’t run out of stock
• Ensures that both the interior and exterior of the bank are always clean
• Handles any other duty as assigned by the Vice president

Security guard

• The security guard is in charge of protecting the bank and it’s environs
• Also controls traffic and organize parking
• Tasked with giving security tips when necessary
• Should also Patrol around the building on a 24 hours basis
• It’s expected to give security reports weekly

6. SWOT Analysis

OPB is a family of caring partners, experts and friends our clients can trust. We believe we can only consolidate this trust through managing, growing and protecting our clients wealth in a strategic way. We have analysed our market and put together a strategic plan to ensure our bank’s success.

We believe that this plan put into consideration our opportunities, our financial and managerial resources, our prospect for success, the convenience and needs of the public, and the effect of competition on OPB. This strong business and strategic plan supported by detailed financial projections and appropriate policies and procedures form the basis of successful regulatory applications for a private bank charter.

We at OPB hope to establish a lucrative private bank that will help its clients manage and grow wealth while also ensuring profits for our investors. We took time to conduct a detailed SWOT analysis for OPB. The details and results are explained below.

At OPB, our strength rests on the expertise and experience of our management team. With the experience and discipline of our team, our SWOT analysis predict we can build a robust profile even before biding for investment, banking, and securities dealings with high net worth individuals.

As the private banking industry expands and grows in revenue and market reach, so does the level of competition in the industry. Due to the very low barriers to entry, any individual or business may register itself as an investment private bank after meeting the necessary financial requirements and basic paperwork.

• Opportunities

The private banking sector has become one of the fastest growing business sectors in the U.S. economy. Note that computerized technologies allow financial banks to operate advisory, investment banking, and brokerage services anywhere in the country.

In time past, most financial banks needed to be within a close proximity to Wall Street in order to provide their clients the highest level of service. This is no longer the case as a bank can access almost every facet of the financial markets through Internet connections and specialized trading and investment management software.

According to our SWOT analysis, the risks we will be facing include the high correlation which exists between the growth rate of the investment industry and the performance of equity markets. While evidence suggests an attractive environment for equities in the future, no forecasts can be made with absolute certainty.

Secondly, our products are measured by their performance. Although the goal is to achieve competitive performance over three to five-year time periods, short-term periods may result in underperformance based on the critical measures.

Also, beyond the third full year of operations, assets under management must produce revenues that will be sufficient to support operations in their entirety. Otherwise our options will be to acquire additional funding or to reduce costs.

7. MARKET ANALYSIS

• Market Trend

According to industry experts, wealth management and private banking players will need to adapt to a new competitive landscape, as the industry has journeyed into an unprecedented era of transparency.

Constant scrutiny from tax authorities—at a global level—has been at the origin of a significant client re-domiciliation trend, which in turn, has urged Wealth Management firms and Private Banks, notably from international wealth management centres, to follow their clients to their home countries. In parallel, a series of substantial evolutions in the cross-border environment has rocked the industry to its foundations.

Indeed, political tension has been intensifying in some regions of the world and new client types, of a more global and mobile nature, have emerged. These phenomena have led to a rise in asset volumes in cross-border markets. On top of that, in a context of fierce domestic competition, onshore players are looking for new customers in foreign markets.

Concurrently, the industry has experienced a regulatory avalanche over the last few years. Many new restrictions have been implemented, ranging from the marketing of products and services, to customer protection, distance selling, and financial advice.

Also, the fast-changing fiscal environment continues to redesign the cross-border wealth management and private banking market. This translates into additional costs and investments for the players.

Many industry experts foresee that the future of cross-border markets will be subject to further regulatory and fiscal developments. The businesses in the industry will need to demonstrate their ability to comply with such developments and to adapt their business strategies accordingly. In our view, there remains much to be done.

Our analysis at OPB shows existing challenges revolving around the value proposition delivered to cross-border clients, and more importantly, how this value can be delivered, through a combination of multi-channel interaction, appropriate product and service offerings, at a fair price, and supported by optimal operating and organizational models. At OPB, we believe that these considerations will shape the industry for years to come.

8. Our Target Market

At OPB, our target market will mostly depend on the phase of our investment product and its development cycle. Most of the marketing opportunity will happen beyond the first year of product development. But we remain very certain that some initial opportunities do exist.

For instance, our bank can utilize its transfer agent’s distribution services, which would put the product in a highly visible online platform. Note that extra opportunities include marketing to programs that invest specifically in “emerging managers.” High net worth individuals and retail marketplace will constitute a greater number of our potential clients.

We believe they can be accessed to a limited degree, even in the early stages, through similar innovative opportunities and already-established relationships with clients. Just like manufacturing organizations, investment machines like OPB are expected to develop products to provide to their customers.

Our hallmark product offering will be our well designed Market Equity strategy, an investment product offering based on the evidence supporting investor’s desires to outperform the overall market via a single, diversified vehicle and to avoid the need to create complex investment structures.

Our Competitive Advantage

There are strategic three P’s commonly associated with investment banks: People, Process, and Performance. The prior two determine the latter. Even though our business plan highlights many areas (market research, financial projections, etc.), we believe there are two areas that will surely determine the level of success achieved by OPB.

The first will be the people. Bright, energetic, talented, and knowledgeable individuals compose the core of the team we have at OPB. Outstanding and qualified investment professionals are always attracted to efficient private banks that are free from bureaucracy. Process is the second most important element of our bank.

We have made sure cutting-edge research will be provided in support of our portfolio management process. The implementation of our process is maximized by outsourcing virtually all functions not related to portfolio management and research, thereby making full use of the bank’s human capital.

9. SALES AND MARKETING STRATEGY

• Sources of Income

We believe that our primary income at OPB will come from providing our clients with professional guidance to protect and enhance their wealth. We will also offer them tailored, unbiased advice and investment services – ranging from asset management to estate planning and from cash management to business planning.

OPB will earn substantial fees for the equity and debt instruments that it underwrites and then resells to the general public. We also believe that we will engage primarily in debt instruments among middle market companies that will be sold on a best efforts basis.

This will place minimal risk on our capital reserve. We will also earn substantial per hour management and deal fees regarding advisory services. We also plan to make investments directly into marketable securities and hedge funds that specialize in specific areas of trading.

Our intention is to develop a number of trading strategies including options trading, LEAPs trading, long position/short position trading, and other methods of trading that will produce small but consistent gains on a weekly and monthly basis.

We plan to engage in a covered call strategy that would allow the fund to assure return on investment for securities that are held for an extended period of time.

10. Sales Forecast

Our plan at OPB is to turn over approximately 1/3 of our portfolio each year. This will remain consistent with an average holding period of three years. Generally, we would love for all holdings to be long-term investments. The more reason we attempt to identify stocks with which we would be comfortable with if we were “locked in” for three years.

Note that this handicaps us to look beyond short-term noise in quarter-to-quarter results and focus on the big picture, such as our management’s vision for the future and their probability of executing their plan. Also, we do realize that quick price changes, especially in volatile markets, may cause us to realize gains (or losses) sooner than anticipated.

• Marketing Strategy and Sales Strategy

At OPB, we acknowledge that the key to marketing an investment product is to create a successful and attractive product, develop a pattern of success, and show that pattern can be repeated in the future. With that, products should be aggressively marketed if capacity to manage additional assets exists.

Although a three to five-year period tends to seem like a century compared to the technology world, it is really quite reasonable especially with the fact that private equity investors in limited partnership vehicles are generally satisfied with a 10-year waiting period that exists prior to a return of their capital investment.

OPB First Century investment product will be the OPB Total Market Equity strategy and will be initially offered through an SEC registered mutual fund. Technological advancements also permit for other economically feasible distribution channels such as separately managed portfolios for large account sizes.

11. Publicity and Advertising Strategy

At OPB, we will create a long term publicity plan that will boost our brand and help us stay consistent in the industry.

That is why we have contacted the services of an Advertising Experts in business development and publicity, Lexus Channel, to help us create publicity and advertising strategies that will help us at OPB to attract and keep our target audience interested. Listed below is the summary of capable strategies detailed by Lexus Channel for our bank.

• Place adverts on both print (community based newspapers and magazines) and electronic media platforms; we will also advertise OPB on financial magazines, real estate and other relevant financial programs on radio and TV
• Introduce OPB by sending introductory letters with our business brochure to individuals, households, corporate organizations, schools, players in the real estate sector, and all the people of New York City.
• Advertise OPB in important financial and business related magazines, newspapers, TV stations, and radio station.
• Place OPB on yellow pages ads (local directories)
• Attend important international and local real estate , finance and business expos, seminars, and business fairs et al
• Create different packages for different category of clients (individuals, startups and established corporate organizations) in order to work with their budgets
• Encourage word of mouth marketing from loyal and satisfied clients
• Sponsor relevant community based events / programs
• Leverage various online platforms to promote the business. This will make it easier for people to enter our website with just a click of the mouse. We will take advantage of the internet and social media platforms such as; Instagram, Facebook , twitter, YouTube, Google + et al to promote our brand
• Place our Bill Boards on strategic locations
• Share and distribute our fliers and handbills in target areas all around New York City

12. Our Pricing Strategy

Banks in this industry aside helping clients manage and plan wealth, get funds from investors who are interested in investing, and charge them for assisting them in investing their funds over a period of time as agreed by both parties.

Even though the investment banking is a very risky venture, it is still a profitable venture hence there is an agreement between the investment bank and the client as it relates to the commission they are expected to make from the deal.

We at OPB plan to charge based on percentage and also a fixed consultancy/business administrative fee. We believe that in coming years and as we progress that we can decide to improvise or adopt any business process and structure that will guarantee us good return on investment (ROI), efficiency and flexibility.

• Payment options

We plan to make sure we provide our clients with a wide variety of payment options for our services. We understand the need and the diverse platforms different people prefer and we plan to provide a suitable platform that will suit all equally. Listed below are the payment options that we will make available to OPB.

• Payment through private bank transfer
• Payment through online private bank transfer
• Payment with check
• Payment with private bank draft

13. Startup Expenditure (Budget)

Banks like ours raise their initial capital from investors after completing regulatory processes before they can open. In the industry, all insured banks must comply with the capital adequacy guidelines of their primary federal regulator. The guidelines require a private bank to demonstrate that it will have enough capital to support its risk profile, operations, and future growth even in the event of unexpected losses.

We believe that new established private banks are generally subject to additional criteria that remain in place until the private bank’s operations become well established and profitable. We plan for an effective minimum capital of between $15 million to $25 million.

Successful capital generation in these amounts is generally the result of a well formulated and executed plan. We have analysed our needs and we plan to spend our startup funds judiciously. Outlined below is a detailed financial projection and costing for starting OPB;

• Price of incorporating the Business in the United States of America – $750.
• Our budget for basic insurance policy covers, permits and business license – $200,000
• Acquiring a suitable Office facility opposite the city hall at New York City (Re – Construction of the facility inclusive) – $75,000
• The budget envisaged for capitalization (working capital) – $30 million
• Budget for settling other legal processes (acquiring business license and all city dues et al) – $2,500
• Equipping the office with suitable and standard equipment(computers, software applications, printers, fax machines, furniture, telephones, filing cabins, safety gadgets and electronics et al) – $10,000
• Purchasing of the required software applications (CRM software, Accounting and Bookkeeping software and Payroll software et al) – $10,500
• Launching OPB official Website – $600
• Our expenditure for paying employees for 3 months plus utility bills – $36, 000
• Other Additional Expenditure (Business cards, Signage, Adverts and Promotions et al) – $4,000
• Miscellaneous: $10,000

With the above detailed cost analysis , we need $349,350 and $30 million working capital to successfully set up OPB.

Generating Funding/Startup Capital for OPB

Octagon Private Bank will be capitalized by three principal investors, Timothy Johnson, Michael Blair, and Thomas Hill. Our founders plan to become the very first financiers of the business, although we have plans of selling shares and stocks as the business matures. Due to less constraint in financing OPB Mortgages, we have outlined the few ways we can get funding and startup capital.

• Generate part of the start up capital from the five principal investors
• Agreeing to angel investors
• Apply for business loan from the Federal Reserve bank (if need be)

Note: OPB has been able to generate an enormous $15 million from its three principal investors. We have also aligned with angel investors to inject $20 million into OPB, with the hope of making profits and establishing a solid business.

14. Sustainability and Expansion Strategy

Our selection of diversified investment in both broad and specialised markets enables us to manage private investors with the same proficiency available to large pension funds and corporate investors. We will help our clients create a plan that optimises their money by advising them on a selected number of products and help them get where they are going faster.

Although some clients prefer to make their own investment decisions; others are more comfortable receiving professional guidance. Whichever approach they prefer, we will always be willing to help. Private banking at OPB is a secure haven, where client’s dreams and ambitions set the target, their special needs decide the right tailored solutions and their financial status dictates the most appropriate financial planning leading to their targets.

To secure a financial future for our clients and their family, we will always proffer financial advice on a broad range of issues affecting the way the client live at the present and the way they want to live in the future.

OPB can greatly simplify the management of client’s complex finances. Leveraging a team of experts, we provide an objective and holistic analysis of our clients personal financial situation that is tailored to help them grow and preserve their wealth.

One distinctive feature of the investment industry is that collection of fees (i.e. revenues) is highly certain because fees are frequently charged directly to the client’s accounts (or to the mutual fund). That is the more reason why revenue certainty is very high and is directly related to the amount of assets under management.

Also common practice in the investment industry is to bill at each quarter-end. For instance, our annual fee of 1 percent would be applied to our clients’ accounts five times per year at 0.20 percent.

Economic motivation is great and growth rates for the investment industry are expected to range from 30 percent to 32 percent in each of the next three years. Also, the demographic, economic, political and social evidence supporting these projections make this industry one of the most attractive industries due to the high degree of certainty in the estimates.

We believe that the certainty coupled with the above average growth rate differentiates this opportunity from other venture investments. Our near accurate estimates outline a plan-to-profitability over a period much shorter than typical venture investments that sometimes need up to ten years to make profits.

Check List/Milestone

• Business Name Availability Check: Completed
• Business Incorporation: Completed
• Opening of Corporate Private bank Accounts: Completed
• Opening Online Payment Platforms: Completed
• Application and Obtaining Tax Payer’s ID: In Progress
• Application for business license and permit: Completed
• Purchase of Insurance for the Business: Completed
• Conducting feasibility studies: Completed
• Leasing, renovating and equipping our facility: Completed
• Generating part of the start – up capital from the founder: Completed
• Applications for Loan from our Private bankers: In Progress
• Writing of Business Plan: Completed
• Drafting of Employee’s Handbook: Completed
• Drafting of Contract Documents: In Progress
• Design of The Company’s Logo: Completed
• Printing of Promotional Materials: Completed
• Recruitment of employees: In Progress
• Purchase of the Needed software applications, furniture, office equipment, electronic appliances and facility facelift: In progress
• Creating Official Website for the Company: In Progress
• Creating Awareness for the business (Business PR): In Progress
• Health and Safety and Fire Safety Arrangement: In Progress
• Establishing business relationship with private banks, financial lending institutions, vendors and key players in the industry: In Progress

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Sample Private Banking Business Plan

Developing a private banking business plan is a big deal and requires all the skills, knowledge, and experience to be successful.

A lot of planning steps are also needed. This planning process is crucial to its success or realization. Having come up with the idea, you’ll need to figure out how it will be fully implemented.

To have a real shot at success, you’ll need to strategize on what steps to take in making your private banking business a reality. This article seeks to offer much-needed help for your benefit.

Here, we’ll be providing private banking business plan tips on how to proceed.

If you are interested in opening a commercial bank, here is a planning guide .

What Are Your Motivations?

Before moving in this direction (of starting a private bank), you’ll need to fully identify your motivations.

Doing this helps give you a purpose and a goal to target. For some groups or persons, a private bank allows them to outgrow their current financial licensing boundaries.

Need to write a plan for your venture? Download a FREE Business Plan PDF Sample to develop a template for your own startup.

Whatever your motivations are, you need to be clear about them and pursue such vigorously. That way, your clarity of purpose helps give you the much-needed boost in actualizing your desires.

Identifying a Gap in the Market

For a private banking idea to be successful, you’ll first need to identify a genuine gap in the market that needs to be filled. Such gaps help in creating demand for your services.

Remember that banking is a highly-competitive sector, hence the need to strategize on the best approach to adopt.

Private Banking Business Plan Guide

Your business plan is where all your strategies need to be laid out. The aim here is to plan for the effective launch and operation of your private banking operations. Your business plan should have certain components.

These help clarify and streamline your plans. They include the executive summary, your company description, market analysis, competitive analysis, description of management and organization, and a breakdown of your services.

Others include a marketing plan, sales strategy, request for funding, and financial projections.

Now before we explain each of these components, it’s important to note that private banking is capital intensive. It’s a high-cost banking operation that requires all the funds you can get.

Requirements For Starting A Private Bank

Regulatory agencies have set requirements for financial services operations including private banking. These requirements must be met before licenses and permits are issued.

The following are important requirements you must have to successfully launch your business operations.

Minimum of Two Partners

To establish a private bank, definite steps must be taken.

These include having a minimum of two partners as well as an experienced management team with a proven track record. Also, such a management team should have no history of money laundering, bankruptcy, or fraud among other related issues.

Senior Directive Staff

Part of the requirements for starting a private banking business is the need to have competent senior directive staff.

These should have a significant level of financial sector experience. It’s best to go for those with 20 years plus experience.

Appoint Compliance and Risk Management Officers

Part of the key appointments to be made by you includes compliance officers and risk management officers to oversee your operations.

Local Office Setup

A local office will need to be set up within the jurisdiction of where you’re applying for a private banking license. This is vital to enable you to provide targeted financial services to your target market.

Experienced Directive Staff

If the launch and operations of your private banking business must be successful, then you’ll need to secure the employment of directive staff having requisite experience and qualifications.

Having an MBA or similar qualifications will be in order.

Audit of All Directors and Shareholders

A full background check of all directors and shareholders will need to be conducted. This also includes an audit which must be performed by an external auditing firm for the sake of transparency.

Your Application Must be Submitted with a Business Plan

As expected, your private banking business plan comes in handy during the license application process. Hence, your business plan must accompany your application.

Initial Paid-Up Capital Requirement

As part of the requirements for launching your private banking operations, you’re required to have met the regulatory requirement of an initial paid-up capital.

Extensive Experience Among Staff a Certain Cadre

To ensure your private banking operations are handled professionally and satisfactorily, you must ensure extensive experience among first and second-level managers and directors.

That way, your operations are seamless with trusted and competent hands overseeing your operations.

Reporting Back-end Banking Software Operation

Part of the tools required for effective private banking business operations is software specially designed for financial services.

These are known as the reporting back-end software and must be fully implemented across all relevant areas of operations.

Raising Capital

As stated earlier, private banking business operations require significant capital injection. Part of the planning process for successful launch and operation includes raising sufficient funds or capital.

One of the most effective ways includes private stock offering. Here, private banks raise capital through this method by offering their stock to accredited individuals. Such individuals must have met stringent financial requirements regarding their net worth and yearly income.

Through this option, you’re able to earn high returns on equity and assets. Sometimes a limited number of non-accredited investors (mostly those having close ties with insiders) can be allowed to participate in the bank stock offering.

Obtaining a Bank Charter

Based on your reach, you’ll need to apply for a banking charter for commercial banks.

These are split into national and state charters. For a national bank charter, you’ll need to obtain such from the Controller of Currency while state charters are issued by state banking commissions.

Launching your private banking business involves a whole lot of planning as seen in this business plan guide. We’ve highlighted key areas that need to be fully sorted out to commence successful operations.

The process isn’t easy and requires detailed planning and perseverance.

Here, we’ve provided information on who to hire, guides on writing a private banking business plan including sections that must be contained within your plan.

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The One-Page Business Plan Template for Financial Advisors

Stephen Boswell , Kevin Nichols | Dec 31, 2018

Ask financial advisors if business planning is important, and most will say, “yes, of course.” Then ask if they have a business plan. If they do, ask whether they refer to it frequently and use it to guide their business development activities. You know the probable answer.

While business planning is undeniably important, it’s too often an exercise in futility. Financial advisors spend days writing yearly business plans. They cram them full of ideas, projects and financial projects that often become a distant memory by February.

In our opinion, your business objectives for the coming year should able to fit on one page. Sure, there are always exceptions. But instead of writing an MBA thesis this year, consider honing your goals down to a one-page document you can share with your team and refer to regularly. There is brilliance in simplicity.

We’ve created a one-page business plan template which you can  access here for a limited time. Here’s how to use it:

1. Five-Year Vision: Start by envisioning your personal and professional life five years from today. Contrast where you are now and where you want to be in five years, so the gap between them becomes clear. Don’t be concerned about how you will close the gap between now and five years from now. The principle is this: If you can envision your future, you can achieve it.

2. One-Year Goals: Use this section to list you most important goals for the upcoming year. Most likely, these are financial goals related to assets, revenue and new households. However, feel free to include some personal goals as well. 

3. Projects: Whether it’s migrating to a new CRM system, adding more fee-based revenue or finding new financial planning software, there are always projects in the works. Use this section to prioritize projects by quarter.

4. Ideal Client Profile: You inevitably have an idea of the clients with whom you work best. That’s a good start. But you also need a list of criteria that will enable you to quickly identify the right people and qualify them as prospective clients. Your ideal client profile will drive all your marketing efforts.

5. Differentiators:  Fifty-six percent of financial advisors claim “outstanding personalized service” as their main differentiator. Doesn’t this seem a bit contradictory? You should be able to articulate and show what sets your practice apart from others.   

6. Marketing Strategies: Use this section to list the core marketing strategies you plan to implement in the coming year. In our survey, 524 financial professionals were given a list of marketing activities and asked which actually landed $1 million-plus clients and which did not. The most effective strategies were:

• Unsolicited Referrals
• Proactive Introductions
• Professional Alliances
• Social Prospecting
• Intimate Social Events
• Educational Events
• Social Media, Website and Content Marketing

7. $1,000/Hour Activities: For most financial advisors there are a handful of activities that drive the majority of their business revenue and future growth. We refer to these as “$1,000/hour activities.” High achievers try to spend the majority of their time engaged in these activities. Also, these activities should correspond with the marketing strategies you listed in section 6.

8. SWOT Analysis: No business plan is complete without a SWOT analysis. Make a list of your internal strengths and weaknesses as well as external opportunities and threats. An honest analysis will help you identify what you’re doing well, where you need improvement in the competitive landscape. 

How do you plan to get from where you ARE to where you WANT to be in your business? Consider  hiring a coach who will guide you through our business planning tools and resources.

@StephenBoswell  is President of The Oechsli Institute and co-author of  Best Practices of Elite Advisors .  @KevinANichols  is the Chief Operating Officer of The Oechsli Institute and co-author of  The Indispensable LinkedIn Sales Guide for Financial Advisors .

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How to Write a Successful Bank Business Plan (+ Template)

Creating a business plan is essential. Still, it can be beneficial for bank s that want to improve their strategy or raise funding.

A well-crafted business plan outlines your company’s vision and documents a step-by-step roadmap of how you will accomplish it. To create an effective business plan, you must first understand the components essential to its success.

This article provides an overview of the key elements that every bank business owner should include in their business plan.

Download the Ultimate Business Plan Template

What is a Bank Business Plan?

A bank business plan is a formal written document describing your company’s business strategy and feasibility. It documents the reasons you will be successful, your areas of competitive advantage, and it includes information about your team members. Your business plan is a critical document that will convince investors and lenders (if needed) that you are positioned to become a successful venture.

Why Write a Bank Business Plan?

A bank business plan is required for banks and investors. The document is a clear and concise guide of your business idea and the steps you will take to make it profitable.

Entrepreneurs can also use this as a roadmap when starting their new company or venture, especially if they are inexperienced in starting a business.

Writing an Effective Bank Business Plan

The following are the key components of a successful bank business plan:

Executive Summary

The executive summary of a bank business plan is a one- to two-page overview of your entire business plan. It should summarize the main points, which will be presented in full in the rest of your business plan.

• Start with a one-line description of your bank company
• Provide a summary of the key points in each section of your business plan, which includes information about your company’s management team, industry analysis, competitive analysis, and financial forecast, among others.

Company Description

This section should include a brief history of your company. Include a short description of how your company started and provide a timeline of milestones your company has achieved.

You may not have a long company history if you are just starting your bank business. Instead, you can include information about your professional experience in this industry and how and why you conceived your new venture. If you have worked for a similar company or been involved in an entrepreneurial venture before starting your bank firm, mention this.

You will also include information about your chosen bank business model and how, if applicable, it is different from other companies in your industry.

Industry Analysis

The industry or market analysis is an essential component of a bank business plan. Conduct thorough market research to determine industry trends and document the size of your market. 

Questions to answer include:

• What part of the bank industry are you targeting?
• How big is the market?
• What trends are happening in the industry right now (and if applicable, how do these trends support your company’s success)?

You should also include sources for your information, such as published research reports and expert opinions.

Customer Analysis

This section should include a list of your target audience(s) with demographic and psychographic profiles (e.g., age, gender, income level, profession, job titles, interests). You will need to provide a profile of each customer segment separately, including their needs and wants.

For example, a bank business’ customers may include small businesses, large corporations, and individuals. Each customer segment will have different requirements that your bank company will need to cater to.

You can include information about how your customers decide to buy from you and what keeps them buying from you.

Develop a strategy for targeting those customers who are most likely to buy from you, as well as those that might be influenced to buy your products or bank services with the right marketing.

Competitive Analysis

The competitive analysis helps you determine how your product or service will differ from competitors, and what your unique selling proposition (USP) might be that will set you apart in this industry.

For each competitor, list their strengths and weaknesses. Next, determine your areas of competitive advantage; that is, in what ways are you different from and ideally better than your competitors.

Below are sample competitive advantages your bank business may have:

• Proven track record with a focus on customer service.
• Superior technology that makes banking easier and more convenient for customers.
• Range of products and services to meet the needs of different customer segments.
• Sound financial position with a commitment to responsible lending practices.
• Extensive branch and ATM network.

Marketing Plan

This part of the business plan is where you determine and document your marketing plan. . Your plan should be laid out, including the following 4 Ps.

• Product/Service : Detail your product/service offerings here. Document their features and benefits.
• Price : Document your pricing strategy here. In addition to stating the prices for your products/services, mention how your pricing compares to your competition.
• Place : Where will your customers find you? What channels of distribution (e.g., partnerships) will you use to reach them if applicable?
• Promotion : How will you reach your target customers? For example, you may use social media, write blog posts, create an email marketing campaign, use pay-per-click advertising, or launch a direct mail campaign. Or you may promote your bank business via PR or events.

Operations Plan

This part of your bank business plan should include the following information:

• How will you deliver your product/service to customers? For example, will you do it in person or over the phone?
• What infrastructure, equipment, and resources are needed to operate successfully? How can you meet those requirements within budget constraints?

You also need to include your company’s business policies in the operations plan. You will want to establish policies related to everything from customer service to pricing, to the overall brand image you are trying to present.

Finally, and most importantly, your Operations Plan will outline the milestones your company hopes to achieve within the next five years. Create a chart that shows the key milestone(s) you hope to achieve each quarter for the next four quarters, and then each year for the following four years. Examples of milestones for a bank business include reaching $X in sales. Other examples include expanding to new markets, launching new products and services, and hiring key personnel.

Management Team

List your team members here, including their names and titles, as well as their expertise and experience relevant to your specific bank industry. Include brief biography sketches for each team member.

Particularly if you are seeking funding, the goal of this section is to convince investors and lenders that your team has the expertise and experience to execute on your plan. If you are missing key team members, document the roles and responsibilities you plan to hire for in the future.

Financial Plan

Here, you will include a summary of your complete and detailed financial plan (your full financial projections go in the Appendix). 

This includes the following three financial statements:

Income Statement

Your income statement should include:

• Revenue : how much revenue you generate.
• Cost of Goods Sold : These are your direct costs associated with generating revenue. This includes labor costs and the cost of any equipment and supplies used to deliver the product/service offering.
• Net Income (or loss) : Once expenses and revenue are totaled and deducted from each other, this is the net income or loss.

Sample Income Statement for a Startup Bank

Balance Sheet

Include a balance sheet that shows your assets, liabilities, and equity. Your balance sheet should include:

• Assets : Everything you own (including cash).
• Liabilities : This is what you owe against your company’s assets, such as accounts payable or loans.
• Equity : The worth of your business after all liabilities and assets are totaled and deducted from each other.

Sample Balance Sheet for a Startup Bank

Cash Flow Statement

Include a cash flow statement showing how much cash comes in, how much cash goes out and a net cash flow for each year. The cash flow statement should include cash flow from:

• Investments

Below is a sample of a projected cash flow statement for a startup bank business.

Sample Cash Flow Statement for a Startup Bank

You will also want to include an appendix section which will include:

• Your complete financial projections
• A complete list of your company’s business policies and procedures related to the rest of the business plan (marketing, operations, etc.)
• Any other documentation which supports what you included in the body of your business plan.

Writing a good business plan gives you the advantage of being fully prepared to launch and grow your bank company. It not only outlines your business vision but also provides a step-by-step process of how you will accomplish it.

Now that you know how to write a business plan for your bank, you can get started on putting together your own.

Finish Your Business Plan in 1 Day!

Wish there was a faster, easier way to finish your business plan?

With our Ultimate Business Plan Template you can finish your plan in just 8 hours or less!

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Bank Business Plan Template

Written by Dave Lavinsky

Bank Business Plan

Over the past 20+ years, we have helped over 500 entrepreneurs and business owners create business plans to start and grow their banks.

If you’re unfamiliar with creating a bank business plan, you may think creating one will be a time-consuming and frustrating process. For most entrepreneurs it is, but for you, it won’t be since we’re here to help. We have the experience, resources, and knowledge to help you create a great business plan.

In this article, you will learn some background information on why business planning is important. Then, you will learn how to write a bank business plan step-by-step so you can create your plan today.

Download our Ultimate Business Plan Template here >

What Is a Bank Business Plan?

A business plan provides a snapshot of your bank as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategies for reaching them. It also includes market research to support your plans.

Why You Need a Business Plan for Your Bank Business

If you’re looking to start a bank or grow your existing bank, you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your bank to improve your chances of success. Your bank business plan is a living document that should be updated annually as your company grows and changes.

Sources of Funding for Banks

With regards to funding, the main sources of funding for a bank are personal savings, credit cards, bank loans, and angel investors. When it comes to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to ensure that your financials are reasonable, but they will also want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business. Personal savings and bank loans are the most common funding paths for banks.  

Finish Your Business Plan Today!

How to write a business plan for a bank.

If you want to start a bank or expand your current one, you need a business plan. The guide below details the necessary information for how to write each essential component of your bank business plan.

Executive Summary

Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.

The goal of your executive summary is to quickly engage the reader. Explain to them the kind of bank you are running and the status. For example, are you a startup, do you have a bank that you would like to grow, or are you operating a chain of banks?

Next, provide an overview of each of the subsequent sections of your plan.

• Give a brief overview of the bank industry.
• Discuss the type of bank you are operating.
• Detail your direct competitors. Give an overview of your target customers.
• Provide a snapshot of your marketing strategy. Identify the key members of your team.
• Offer an overview of your financial plan.

Company Overview

In your company overview, you will detail the type of bank you are operating.

For example, you might specialize in one of the following types of banks:

• Commercial bank : this type of bank tends to concentrate on supporting businesses. Both large corporations and small businesses can turn to commercial banks if they need to open a checking or savings account, borrow money, obtain access to credit or transfer funds to companies in foreign markets.
• Credit union: this type of bank operates much like a traditional bank (issues loans, provides checking and savings accounts, etc.) but banks are for-profit whereas credit unions are not. Credit unions fall under the direction of their own members. They tend to serve people affiliated with a particular group, such as people living in the same area, low-income members of a community or armed service members. They also tend to charge lower fees and offer lower loan rates.
• Retail bank: retail banks can be traditional, brick-and-mortar brands that customers can access in-person, online, or through their mobile phones. They also offer general public financial products and services such as bank accounts, loans, credit cards, and insurance.
• Investment bank: this type of bank manages the trading of stocks, bonds, and other securities between companies and investors. They also advise individuals and corporations who need financial guidance, reorganize companies through mergers and acquisitions, manage investment portfolios or raise money for certain businesses and the federal government.

In addition to explaining the type of bank you will operate, the company overview needs to provide background on the business.

Include answers to questions such as:

• When and why did you start the business?
• What milestones have you achieved to date? Milestones could include the number of clients served, the number of clients with positive reviews, reaching X number of clients served, etc.
• Your legal business Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.

Industry Analysis

In your industry or market analysis, you need to provide an overview of the bank industry.

While this may seem unnecessary, it serves multiple purposes.

First, researching the bank industry educates you. It helps you understand the market in which you are operating.

Secondly, market research can improve your marketing strategy, particularly if your analysis identifies market trends.

The third reason is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.

The following questions should be answered in the industry analysis section of your bank business plan:

• How big is the bank industry (in dollars)?
• Is the market declining or increasing?
• Who are the key competitors in the market?
• Who are the key suppliers in the market?
• What trends are affecting the industry?
• What is the industry’s growth forecast over the next 5 – 10 years?
• What is the relevant market size? That is, how big is the potential target market for your bank? You can extrapolate such a figure by assessing the size of the market in the entire country and then applying that figure to your local population.

Customer Analysis

The customer analysis section of your bank business plan must detail the customers you serve and/or expect to serve.

The following are examples of customer segments: individuals, small businesses, families, and corporations.

As you can imagine, the customer segment(s) you choose will have a great impact on the type of bank you operate. Clearly, corporations would respond to different marketing promotions than individuals, for example.

Try to break out your target customers in terms of their demographic and psychographic profiles. With regards to demographics, including a discussion of the ages, genders, locations, and income levels of the potential customers you seek to serve.

Psychographic profiles explain the wants and needs of your target customers. The more you can recognize and define these needs, the better you will do in attracting and retaining your customers.

Finish Your Bank Business Plan in 1 Day!

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With Growthink’s Ultimate Business Plan Template you can finish your plan in just 8 hours or less!

Competitive Analysis

Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.

Direct competitors are other banks.

Indirect competitors are other options that customers have to purchase from that aren’t directly competing with your product or service. This includes trust accounts, investment companies, or the stock market. You need to mention such competition as well.

For each such competitor, provide an overview of their business and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as

• What types of customers do they serve?
• What type of bank are they?
• What is their pricing (premium, low, etc.)?
• What are they good at?
• What are their weaknesses?

With regards to the last two questions, think about your answers from the customers’ perspective. And don’t be afraid to ask your competitors’ customers what they like most and least about them.

The final part of your competitive analysis section is to document your areas of competitive advantage. For example:

• Will you provide loans and retirement savings accounts?
• Will you offer products or services that your competition doesn’t?
• Will you provide better customer service?
• Will you offer better pricing?

Think about ways you will outperform your competition and document them in this section of your plan.  

Marketing Plan

Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For a bank business plan, your marketing strategy should include the following:

Product : In the product section, you should reiterate the type of bank company that you documented in your company overview. Then, detail the specific products or services you will be offering. For example, will you provide savings accounts, auto loans, mortgage loans, or financial advice?

Price : Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of your plan, you are presenting the products and/or services you offer and their prices.

Place : Place refers to the site of your bank. Document where your company is situated and mention how the site will impact your success. For example, is your bank located in a busy retail district, a business district, a standalone office, or purely online? Discuss how your site might be the ideal location for your customers.

Promotions : The final part of your bank marketing plan is where you will document how you will drive potential customers to your location(s). The following are some promotional methods you might consider:

• Advertise in local papers, radio stations and/or magazines
• Reach out to websites
• Distribute flyers
• Engage in email marketing
• Advertise on social media platforms
• Improve the SEO (search engine optimization) on your website for targeted keywords

Operations Plan

While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.

Everyday short-term processes include all of the tasks involved in running your bank, including reconciling accounts, customer service, accounting, etc.

Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to sign up your Xth customer, or when you hope to reach $X in revenue. It could also be when you expect to expand your bank to a new city.  

Management Team

To demonstrate your bank’s potential to succeed, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company.

Ideally, you and/or your team members have direct experience in managing banks. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.

If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act as mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in managing a bank or successfully running a small financial advisory firm.  

Financial Plan

Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet, and cash flow statements.

Income Statement

An income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenue and then subtracts your costs to show whether you turned a profit or not.

In developing your income statement, you need to devise assumptions. For example, will you see 5 clients per day, and/or offer sign up bonuses? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.

Balance Sheets

Balance sheets show your assets and liabilities. While balance sheets can include much information, try to simplify them to the key items you need to know about. For instance, if you spend $50,000 on building out your bank, this will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a lender writes you a check for $50,000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.

Cash Flow Statement

Your cash flow statement will help determine how much money you need to start or grow your business, and ensure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt.

When creating your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a bank:

• Cost of furniture and office supplies
• Payroll or salaries paid to staff
• Business insurance
• Other start-up expenses (if you’re a new business) like legal expenses, permits, computer software, and equipment

Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your bank location lease or a list of accounts and loans you plan to offer.  

Writing a business plan for your bank is a worthwhile endeavor. If you follow the template above, by the time you are done, you will truly be an expert. You will understand the bank industry, your competition, and your customers. You will develop a marketing strategy and will understand what it takes to launch and grow a successful bank.  

Bank Business Plan Template FAQs

What is the easiest way to complete my bank business plan.

Growthink's Ultimate Business Plan Template allows you to quickly and easily write your bank business plan.

How Do You Start a Bank Business?

Starting a bank business is easy with these 14 steps:

• Choose the Name for Your Bank Business
• Create Your Bank Business Plan
• Choose the Legal Structure for Your Bank Business
• Secure Startup Funding for Your Bank Business (If Needed)
• Secure a Location for Your Business
• Register Your Bank Business with the IRS
• Open a Business Bank Account
• Get a Business Credit Card
• Get the Required Business Licenses and Permits
• Get Business Insurance for Your Bank Business
• Buy or Lease the Right Bank Business Equipment
• Develop Your Bank Business Marketing Materials
• Purchase and Setup the Software Needed to Run Your Bank Business
• Open for Business

Don’t you wish there was a faster, easier way to finish your Bank business plan?

OR, Let Us Develop Your Plan For You

Since 1999, Growthink has developed business plans for thousands of companies who have gone on to achieve tremendous success.   Click here to see how a Growthink business plan consultant can create your business plan for you.

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How to get started creating your business plan, a successful business plan can help you focus your goals and take actionable steps toward achieving them. here’s what to consider as you develop your plan..

Regardless of whether or not you’re pitching to investors and lenders, starting a business requires a plan. A business plan gives you direction, helps you qualify your ideas and clarifies the path you intend to take toward your goal.

Four important reasons to write a business plan:

• Decision-making:  Business plans help you eliminate any gray area by writing specific information down in black and white. Making tough decisions is often one of the hardest and most useful parts of writing a business plan. 
• A reality check:  The first real challenge after deciding to launch a new venture may be writing the business plan. Through the process, you may realize your business idea is a bit flawed or not yet fully developed. This may feel like extra work, but the effort you put into improving your idea during this step can bolster your chance of future success. 
• New ideas: Discovering new ideas, different approaches and fresh perspectives are invaluable parts of the business planning process. Working closely with your concept can lead to unexpected insights, shifting your business in the right direction. 
• Developing an action plan: Your business plan is a tool that will help you outline action items, next steps and future activities. This living, breathing document shows where you are and where you want to be, with the framework you need to get there.

Business plan guide: How to get started

Use this exercise to gather some of the most important information. When you're ready to put an outline together, follow our standard business plan template (PDF) and use this business plan example to use as a guide as you fill in your outline. Once your outline is finalized, you can share it with business partners, investors or banks as a tool to promote your concept.

• Vision: Your vision statement sets the stage for everything you hope your business will accomplish going forward. Let yourself dream, pinpointing the ideas that will keep you inspired and motivated when you hit a bump in the road. 
• Mission: A mission statement clarifies the purpose of your business and guides your plan, ultimately answering the question, "Why do you exist?" 
• Objectives: Use your business objectives to define your goals and priorities. What are you going to accomplish with your business, and in what timeframe? These touchstones will drive your actions and help you stay focused. 
• Strategies: Your objectives describe what you’re going to do, while your strategies describe how you’re going to do it. Consider your goals here, and identify the different ways you’ll work to reach them. 
• Startup capital: Determine what your startup expenses will be. Having a clear idea will allow you to figure out where the money is coming from and help you spend what you have in the right areas. 
• Monthly expenses: What do you estimate your business’ ongoing monthly expenses will be? This may change significantly over time — consider what your expenditure could be immediately after launch, in three months, in six months and in one year. 
• Monthly income: In order to cover your expenses (and hopefully make a profit), you will need to estimate your income. What are your revenue streams? It's always wise to diversify your income. That way, you won’t be tied to one stream that might not be lucrative as quickly as you need it to be. 
• Goal-setting and creating an action plan: Once you have all the specifics outlined, it's time to set up the step-by-step action items explained in the companion guide, a standard business plan outline. This process will utilize the hard work you've already done, breaking each step down in a way that you can follow.   

A business plan isn’t necessarily a static document that you create once and then forget about. You can use it as a powerful tool by referencing it to adjust your priorities, stay on track and keep your goals in sight.

Business plan: An outline

Use this exercise to gather important information about your business.

Answer these questions to start your planning process. Your responses will provide important information about your business, which you can use as an overview to develop your plan further.

• What is your dream? 
• What do you feel inspired to do or create?
• What keeps you motivated, even in the face of uncertainty?  
• Why does this business exist? 
• What purpose(s) or need(s) does it fulfill for customers?   

Objectives 

• List the goals of your company, then number them in order of importance. 
• What will the business accomplish when it’s fully established and successful? 
• How much time will it take to reach this point?  
• For each goal or objective listed above, write one or more actions required to complete it.   

Startup capital 

• List any and all startup expenses that come to mind. 
• Next to each: 
• Estimate the cost of any expenses you can. 
• List the most likely source of the funding. 
• Circle the high-priority expenses. 
• Assess whether your available capital is going toward the high-priority items. If not, reconsider the way you will allocate funds.  

Monthly expenses

• If you can, estimate your business’ ongoing monthly expenses immediately after launch, in three months, in six months and in one year. 
• If you can’t, what information will you need in order to estimate your expenses?  

Monthly income 

• What are your revenue streams? Estimate your monthly income accordingly. 
• Which revenue sources deliver fast or slow returns? Are there other sources you could consider to diversify assets?  
• After completing your outline, reference your responses as you work through a traditional business plan guide. This next step will allow you to expand and add more detailed information to your plan. 
• When you’re ready to make your formal plan, reference this companion guide, a standard business plan outline  (PDF). We've also included a  business plan example  to help as you fill in your outline. 

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How to Write a Successful Business Plan for a Loan

Lisa A. Anthony is a lead writer on NerdWallet’s small-business team, primarily covering small-business lending. She has over 20 years of diverse experience in finance, lending and taxes. Prior to joining NerdWallet, Lisa worked as a writer for Intuit Turbo Tax, loan officer for Bank of America and a business analyst for Wells Fargo Home Mortgage. Over the years, she has had the opportunity to interact directly with consumers on lending products and tax preparation software. Her work has appeared in The Associated Press, Washington Post and Entrepreneur, among other publications.

Sally Lauckner is an editor on NerdWallet's small-business team. She has over 15 years of experience in print and online journalism. Before joining NerdWallet in 2020, Sally was the editorial director at Fundera, where she built and led a team focused on small-business content and specializing in business financing. Her prior experience includes two years as a senior editor at SmartAsset, where she edited a wide range of personal finance content, and five years at the AOL Huffington Post Media Group, where she held a variety of editorial roles. She is based in New York City.

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Table of Contents

What does a loan business plan include?

What lenders look for in a business plan, business plan for loan examples, resources for writing a business plan.

A comprehensive and well-written business plan can be used to persuade lenders that your business is worth investing in and hopefully, improve your chances of getting approved for a small-business loan . Many lenders will ask that you include a business plan along with other documents as part of your loan application.

When writing a business plan for a loan, you’ll want to highlight your abilities, justify your need for capital and prove your ability to repay the debt. 

Here’s everything you need to know to get started.

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Once we uncover your personalized matches, our team will consult you on the process moving forward.

A successful business plan for a loan describes your financial goals and how you’ll achieve them. Although business plan components can vary from company to company, there are a few sections that are typically included in most plans.

These sections will help provide lenders with an overview of your business and explain why they should approve you for a loan.  

Executive summary

The executive summary is used to spark interest in your business. It may include high-level information about you, your products and services, your management team, employees, business location and financial details. Your mission statement can be added here as well.

To help build a lender’s confidence in your business, you can also include a concise overview of your growth plans in this section.

Company overview

The company overview is an area to describe the strengths of your business. If you didn’t explain what problems your business will solve in the executive summary, do it here. 

Highlight any experts on your team and what gives you a competitive advantage. You can also include specific details about your business such as when it was founded, your business entity type and history.

Products and services

Use this section to demonstrate the need for what you’re offering. Describe your products and services and explain how customers will benefit from having them. 

Detail any equipment or materials that you need to provide your goods and services — this may be particularly helpful if you’re looking for equipment or inventory financing . You’ll also want to disclose any patents or copyrights in this section.

Market analysis

Here you can demonstrate that you’ve done your homework and showcase your understanding of your industry, current outlook, trends, target market and competitors.

You can add details about your target market that include where you’ll find customers, ways you plan to market to them and how your products and services will be delivered to them.

» MORE: How to write a market analysis for a business plan

Marketing and sales plan

Your marketing and sales plan provides details on how you intend to attract your customers and build a client base. You can also explain the steps involved in the sale and delivery of your product or service.

At a high level, this section should identify your sales goals and how you plan to achieve them — showing a lender how you’re going to make money to repay potential debt.

Operational plan

The operational plan section covers the physical requirements of operating your business on a day-to-day basis. Depending on your type of business, this may include location, facility requirements, equipment, vehicles, inventory needs and supplies. Production goals, timelines, quality control and customer service details may also be included.

Management team

This section illustrates how your business will be organized. You can list the management team, owners, board of directors and consultants with details about their experience and the role they will play at your company. This is also a good place to include an organizational chart .

From this section, a lender should understand why you and your team are qualified to run a business and why they should feel confident lending you money — even if you’re a startup.

Funding request

In this section, you’ll explain the amount of money you’re requesting from the lender and why you need it. You’ll describe how the funds will be used and how you intend to repay the loan.

You may also discuss any funding requirements you anticipate over the next five years and your strategic financial plans for the future.

» Need help writing? Learn about the best business plan software .

Financial statements

When you’re writing a business plan for a loan, this is one of the most important sections. The goal is to use your financial statements to prove to a lender that your business is stable and will be able to repay any potential debt. 

In this section, you’ll want to include three to five years of income statements, cash flow statements and balance sheets. It can also be helpful to include an expense analysis, break-even analysis, capital expenditure budgets, projected income statements and projected cash flow statements. If you have collateral that you could put up to secure a loan, you should list it in this section as well.

If you’re a startup that doesn’t have much historical data to provide, you’ll want to include estimated costs, revenue and any other future projections you may have. Graphs and charts can be useful visual aids here.

In general, the more data you can use to show a lender your financial security, the better.

Finally, if necessary, supporting information and documents can be added in an appendix section. This may include credit histories, resumes, letters of reference, product pictures, licenses, permits, contracts and other legal documents.

Lenders will typically evaluate your loan application based on the five C’s — or characteristics — of credit : character, capacity, capital, conditions and collateral. Although your business plan won't contain everything a lender needs to complete its assessment, the document can highlight your strengths in each of these areas.

A lender will assess your character by reviewing your education, business experience and credit history. This assessment may also be extended to board members and your management team. Highlights of your strengths can be worked into the following sections of your business plan:

Executive summary.

Company overview.

Management team.

Capacity centers on your ability to repay the loan. Lenders will be looking at the revenue you plan to generate, your expenses, cash flow and your loan payment plan. This information can be included in the following sections:

Funding request.

Financial statements.

Capital is the amount of money you have invested in your business. Lenders can use it to judge your financial commitment to the business. You can use any of the following sections to highlight your financial commitment:

Operational plan.

Conditions refers to the purpose and market for your products and services. Lenders will be looking for information such as product demand, competition and industry trends. Information for this can be included in the following sections:

Market analysis.

Products and services.

Marketing and sales plan.

Collateral is an asset pledged to a lender to guarantee the repayment of a loan. This can be equipment, inventory, vehicles or something else of value. Use the following sections to include information on assets:

» MORE: How to get a business loan

Writing a business plan for a loan application can be intimidating, especially when you’re just getting started. It may be helpful to use a business plan template or refer to an existing sample as you’re going through the draft process.

Here are a few examples that you may find useful:

Business Plan Outline — Colorado Small Business Development Center

Business Plan Template — Iowa Small Business Development Center

Writing a Business Plan — Maine Small Business Development Center

Business Plan Workbook — Capital One

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U.S. Small Business Administration. The SBA offers a free self-paced course on writing a business plan. The course includes several videos, objectives for you to accomplish, as well as worksheets you can complete.

SCORE. SCORE, a nonprofit organization and resource partner of the SBA, offers free assistance that includes a step-by-step downloadable template to help startups create a business plan, and mentors who can review and refine your plan virtually or in person.

Small Business Development Centers. Similarly, your local SBDC can provide assistance with business planning and finding access to capital. These organizations also have virtual and in-person training courses, as well as opportunities to consult with business experts.

Business plan software. Although many business plan software platforms require a subscription, these tools can be useful if you want a templated approach that can break the process down for you step-by-step. Many of these services include a range of examples and templates, instruction videos and guides, and financial dashboards, among other features. You may also be able to use a free trial before committing to one of these software options.

A loan business plan outlines your business’s objectives, products or services, funding needs and finances. The goal of this document is to convince lenders that they should approve you for a business loan.

Not all lenders will require a business plan, but you’ll likely need one for bank and SBA loans. Even if it isn’t required, however, a lean business plan can be used to bolster your loan application.

Lenders ask for a business plan because they want to know that your business is and will continue to be financially stable. They want to know how you make money, spend money and plan to achieve your financial goals. All of this information allows them to assess whether you’ll be able to repay a loan and decide if they should approve your application.

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What Private Bankers Do

Career path, educational qualifications, other qualifications.

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Private Banker: Career Path and Qualifications

Private bankers work in the private banking divisions of large retail banks, in investment banks and in wealth management firms . They provide personalized financial services primarily to high-net-worth individuals (HNWIs). In essence, private bankers are personal financial advisors for the very rich.

Below is a look at the field, what the work entails, and what the qualifications are to become a private banker.

Key Takeaways

• Private bankers work at large retail or investment banks, or wealth management firms, providing specialized services to the ultra-wealthy.
• Private bankers define financial goals with clients, develop a plan to execute the goals with the firm's other experts, then build and manage the client's portfolio so as to try and reach those goals.
• Many private bankers start as entry-level financial analysts or financial advisors before moving on to becoming private bankers.

Private bankers meet with clients to define investment goals and then work with financial analysts and other professionals in the firm to create individualized investment strategies to meet those goals.

After defining a strategy, private bankers execute the strategies by selecting appropriate mixes of securities and investment products for the client portfolios, which they then manage and adjust on a continual basis.

In addition to investment advising and portfolio management services, many private bankers oversee deposit and cash management services, credit and lending services, tax planning services, trust services, retirement products, and annuities and insurance products.

Many private banking divisions in large banks handle virtually all aspects of clients' finances. A private banker often works with relatively few clients to provide the focus and personalized service that private banking clients often demand. In some firms, private bankers focus on managing client portfolios while relationship managers handle other client needs.

The largest private banks in the U.S. are Morgan Stanley, Bank of America Merrill Lynch, JPMorgan Private Bank, Citigroup, and Goldman Sachs.

Many private bankers begin working in entry-level financial analyst positions in wealth management firms, banks, brokerages or other organizations in the securities industry. Many financial analysts study stocks, bonds, and other securities to produce financial plans, analytical reports, and recommendations for private bankers, portfolio managers, and other senior investment professionals in the firm. With experience and a record of high performance, a financial analyst specializing in investments can rise into a private banker position.

Other professionals in the field begin working as personal financial advisors serving retail clients at banks and other financial services firms. Personal financial advisors do much of the same work that private bankers do, but they typically deal with clients who do not have the wealth to justify the cost of the highly personalized services private bankers typically offer. A record of success as a retail-level advisor can lead to a position as a private banker.

$83,800 to $111,800

According to Salary.com, $83,800 to $111,800 is the average range of annual base pay plus fees, bonuses, and commissions for an intermediate private banker.

A bachelor's degree in a business discipline or another relevant subject is a basic qualification to work as a private banker. However, in most cases, a bachelor's degree must be combined with substantial work experience to qualify for a position in this field.

Most employers prefer to hire experienced candidates with master's degrees in business disciplines such as finance, accounting or business administration. Many employers also look for experienced job candidates who have graduate degrees in mathematics, statistics or law. Coursework in subjects such as taxation, risk management, investing, and financial planning are especially valuable to prospective private bankers.

Many employers seek private bankers with one or more professional certifications relevant to the field. The chartered financial analyst (CFA) designation, awarded by the CFA Institute, is one of the most widely respected professional certifications for investment professionals. It is available to candidates who have at least 4,000 hours of qualifying experience, completed in 36 months.

The certified financial planner (CFP) designation, awarded by the CFP Board, is another highly regarded certification common among private bankers. The CFP designation requires 6,000 hours of qualifying professional experience or 4,000 hours of apprenticeship experience.

The certified trust and fiduciary advisor (CTFA) designation, awarded by the American Bankers Association, is designed for trust and wealth advisors. There are several paths to the CTFA designation; the shortest path requires three years of wealth management experience and completion of an approved training program. Each of these certifications requires candidates to pass one or more examinations.

Private bankers typically must obtain appropriate licenses from the Financial Industry Regulatory Authority (FINRA), which is responsible for oversight of securities firms in the United States. Many private bankers require Series 7 and Series 63 licenses. Other licenses may be required, depending on the position. Private bankers who intend to deal with life insurance, variable annuities, and related products may also require appropriate licenses from their local state insurance boards.

Salary.com. " Intermediate Private Banker Salary in the United States ."

CFA Institute. " CFA Program ."

CFA Institute. " Application Resources ."

CFP Board. " Why Get Certified ."

CFP Board. " The Certification Process ."

American Bankers Association. " Certified Trust and Fiduciary Advisor (CTFA) ."

American Bankers Association. " Eligibility Requirements for the CTFA ."

FINRA. " Series 63-Uniform Securities Agent State Law Exam ."

FINRA. " Series 7-General Securities Representative Exam ."

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How to Write a Business Plan to Start a Bank

Published Feb.29, 2024

Updated Apr.23, 2024

By: Alex Silensky

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Table of Content

Bank Business Plan Checklist

A bank business plan is a document that describes the bank’s goals, strategies, operations, and financial projections. It communicates the bank’s vision and value proposition to potential investors, regulators, and stakeholders. A SBA business plan should be clear, concise, and realistic. It should also cover all the essential aspects of the bank’s business model.

Here is a checklist of the main sections that you should keep in mind while building a bank business plan:

• Executive summary
• Company description
• Industry analysis
• Competitive analysis
• Service or product list
• Marketing and sales plan
• Operations plan
• Management team
• Funding request
• Financial plan

Sample Business Plan for Bank

The following is a bank business plan template that operates in the USA. This bank business plan example is regarding ABC Bank, and it includes the following sections:

Executive Summary

ABC Bank is a new bank for California’s SMBs and individuals. We offer convenient banking services tailored to our customers’ needs and preferences. We have a large target market with over 500,000 SMBs spending billions on banking services annually. We have the licenses and approvals to operate our bank and raised $20 million in seed funding. We are looking for another $30 million in debt financing.

Our goal is to launch our bank by the end of 2024 and achieve the following objectives in the first five years of operation:

• Acquire 100,000 customers and 10% market share
• Generate $100 million in annual revenue and $20 million in net profit
• Achieve a return on equity (ROE) of 15% and a return on assets (ROA) of 1.5%
• Expand our network to 10 branches and 50 ATMs
• Increase our brand awareness and customer loyalty

Our bank has great potential to succeed and grow in the banking industry. We invite you to read the rest of our microfinance business plan to learn about how to set up a business plan for the bank and how we will achieve our goals.

Industry Analysis

California has one of the biggest and most active banking industries in the US and the world. According to the Federal Deposit Insurance Corp , California has 128 financial institutions, with total assets exceeding $560 billion.

The California banking industry is regulated and supervised by various federal and state authorities. However, they also face several risks and challenges, such as:

• High competition and consolidation
• Increasing regulation and compliance
• Rising customer demand for digital and mobile banking
• Cyberattacks and data breaches
• Environmental and social issues

The banking industry in California is highly competitive and fragmented. According to the FDIC, the top 10 banks and thrifts in California by total deposits as of June 30, 2023, were:

Customer Analysis

We serve SMBs who need local, easy, and cheap banking. We divide our customers into four segments by size, industry, location, and needs: 

SMB Segment 1 – Tech SMBs in big cities of California. These are fast-growing, banking-intensive customers. They account for a fifth of our market share and a third of our revenue and are loyal and referable.

SMB Segment 2 – Entertainment SMBs in California’s entertainment hubs. These are high-profile, banking-heavy customers. They make up a sixth of our market and a fourth of our revenue and are loyal and influential.

SMB Segment 3 – Tourism SMBs in California’s tourist spots. These are seasonal, banking-dependent customers. They represent a quarter of our market and a fifth of our revenue and are loyal and satisfied.

SMB Segment 4 – Other SMBs in various regions of California. These are slow-growing, banking-light customers. They constitute two-fifths of our market and a quarter of our revenue and are loyal and stable.

Competitive Analysis

We compete with other banks and financial institutions that offer similar or substitute products and services to our target customers in our target market. We group our competitors into four categories based on their size and scope: 

1. National Banks

• Key Players – Bank of America, Wells Fargo, JPMorgan Chase, Citibank, U.S. Bank
• Strengths – Large customer base, strong brand, extensive branch/ATM network, innovation, robust operations, solid financial performance
• Weaknesses – High competition, regulatory costs, low customer satisfaction, high attrition
• Strategies – Maintain dominance through customer acquisition/retention, revenue growth, efficiency

2. Regional Banks

• Key Players – MUFG Union Bank, Bank of the West, First Republic Bank, Silicon Valley Bank, East West Bank
• Strengths – Loyal customer base, brand recognition, convenient branch/ATM network, flexible operations
• Weaknesses – Moderate competition, regulatory costs, customer attrition
• Strategies – Grow market presence through customer acquisition/retention, revenue optimization, efficiency

3. Community Banks

• Key Players – Mechanics Bank, Bank of Marin, Pacific Premier Bank, Tri Counties Bank, Luther Burbank Savings
• Strengths – Small loyal customer base, reputation, convenient branches, ability to adapt
• Weaknesses – Low innovation and technology adoption
• Strategies – Maintain niche identity through customer loyalty, revenue optimization, efficiency

4. Online Banks

• Key Players – Ally Bank, Capital One 360, Discover Bank, Chime Bank, Varo Bank
• Strengths – Large growing customer base, strong brand, no branches, lean operations, high efficiency
• Weaknesses – High competition, regulatory costs, low customer satisfaction and trust, high attrition
• Strategies – Disrupt the industry by acquiring/retaining customers, optimizing revenue, improving efficiency

Market Research

Our market research shows that:

• California has a large, competitive, growing banking market with 128 banks and $560 billion in assets.
• Our target customers are the SMBs in California, which is 99.8% of the businesses and employ 7.2-7.4 million employees.
• Our main competitors are national and regional banks in California that offer similar banking products and services.

We conclude that:

• Based on the information provided in our loan officer business plan , there is a promising business opportunity for us to venture into and establish a presence in the banking market in California.
• We should focus on the SMBs in California, as they have various unmet banking needs, preferences, behavior, and a high potential for growth and profitability.

Operations Plan

Our operational structure and processes form the basis of our operations plan, and they are as follows:

• Location and Layout – We have a network of 10 branches and 50 ATMs across our target area in California. We strategically place our branches and ATMs in convenient and high-traffic locations.
• Equipment and Technology – We use modern equipment and technology to provide our products and services. We have computers and software for banking functions; security systems to protect branches and ATMs; communication systems to communicate with customers and staff; inventory and supplies to operate branches and ATMs.
• Suppliers and Vendors – We work with reliable suppliers and vendors that provide our inventory and supplies like cash, cards, paper, etc. We have supplier management systems to evaluate performance.
• Staff and Management – Our branches have staff like branch managers, customer service representatives, tellers, and ATM technicians with suitable qualifications and experience.
• Policies and Procedures – We have policies for customer service, cash handling, card handling, and paper handling to ensure quality, minimize losses, and comply with regulations. We use various tools and systems to implement these policies.

Management Team

The following individuals make up our management team:

• Earl Yao, CEO and Founder – Earl is responsible for establishing and guiding the bank’s vision, mission, strategy, and overall operations. He brings with him over 20 years of banking experience.
• Paula Wells, CFO and Co-Founder – Paula oversees financial planning, reporting, analysis, compliance, and risk management.
• Mark Hans, CTO – Mark leads our technology strategy, infrastructure, innovation, and digital transformation.
• Emma Smith, CMO – Emma is responsible for designing and implementing our marketing strategy and campaigns.
• David O’kane, COO – David manages the daily operations and processes of the bank ensuring our products and services meet the highest standards of quality and efficiency.

Financial Projections

Our assumptions and drivers form the basis of our financial projections, which are as follows:

Assumptions: We have made the following assumptions for our collection agency business plan :

• Start with 10 branches, 50 ATMs in January 2024
• Grow branches and ATMs 10% annually
• 10,000 customers per branch, 2,000 per ATM
• 5% average loan rate, 2% average deposit rate
• 80% average loan-to-deposit ratio
• $10 average fee per customer monthly
• $100,000 average operating expense per branch monthly
• $10,000 average operating expense per ATM monthly
• 25% average tax rate

Our financial projections are as per our:

• Projected Income Statement
• Projected Cash Flow Statement
• Projected Balance Sheet
• Projected Financial Ratios and Indicators

Select the Legal Framework for Your Bank

Our legal structure and requirements form the basis of our legal framework, which are as follows:

Legal Structure and Entity – We have chosen to incorporate our bank as a limited liability company (LLC) under the laws of California.

Members – We have two members who own and control our bank: Earl Yao and Paula Wells, the founders and co-founders of our bank.

Manager – We have appointed Mark Hans as our manager who oversees our bank’s day-to-day operations and activities.

Name – We have registered our bank’s name as ABC Bank LLC with the California Secretary of State. We have also obtained a trademark registration for our name and logo.

Registered Agent – We have designated XYZ Registered Agent Services LLC as our registered agent authorized to receive and handle legal notices and documents on behalf of our bank.

Licenses and Approvals – We have obtained the necessary licenses and approvals to operate our bank in California, including:

• Federal Deposit Insurance Corporation (FDIC) Insurance
• Federal Reserve System Membership
• California Department of Financial Protection and Innovation (DFPI) License
• Business License
• Employer Identification Number (EIN)
• Zoning and Building Permits

Legal Documents and Agreements – We have prepared and signed the necessary legal documents and agreements to form and operate our bank, including:

• Certificate of Formation
• Operating Agreement
• Membership Agreement
• Loan Agreement
• Card Agreement
• Paper Agreement

Keys to Success

We analyze our market, customers, competitors, and industry to determine our keys to success. We have identified the following keys to success for our bank.

Customer Satisfaction

Customer satisfaction is vital for any business, especially a bank relying on loyalty and referrals. It is the degree customers are happy with our products, services, and interactions. It is influenced by:

• Product and service quality – High-quality products and services that meet customer needs and preferences
• Customer service quality – Friendly, professional, and helpful customer service across channels
• Customer experience quality – Convenient, reliable, and secure customer access and transactions

We will measure satisfaction with surveys, feedback, mystery shopping, and net promoter scores. Our goal is a net promoter score of at least 8.

Operational Efficiency

Efficiency is key in a regulated, competitive environment. It is using resources and processes effectively to achieve goals and objectives. It is influenced by:

• Resource optimization – Effective and efficient use and control of capital, staff, and technology
• Process improvement – Streamlined, standardized processes measured for performance
• Performance management – Managing financial, operational, customer, and stakeholder performance

We will measure efficiency with KPIs, metrics, dashboards, and operational efficiency ratios. Our goal is an operational efficiency ratio below 50%.

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Highly Efficient Service! I am incredibly happy with the outcome; Alex and his team are highly efficient professionals with a diverse bank of knowledge.

Are you looking to hire business plan writers to start a bank business plan? At OGSCapital, we can help you create a customized and high-quality bank development business plan to meet your goals and exceed your expectations.

We have a team of senior business plan experts with extensive experience and expertise in various industries and markets. We will conduct thorough market research, develop a unique value proposition, design a compelling financial model, and craft a persuasive pitch deck for your business plan. We will also offer you strategic advice, guidance, and access to a network of investors and other crucial contacts.

We are not just a business plan writing service. We are a partner and a mentor who will support you throughout your entrepreneurial journey. We will help you achieve your business goals with smart solutions and professional advice. Contact us today and let us help you turn your business idea into a reality.

Frequently Asked Questions

How do I start a small bank business?

To start a small bank business in the US, you need to raise enough capital, understand how to make a business plan for the bank, apply for a federal or state charter, register your bank for taxes, open a business bank account, set up accounting, get the necessary permits and licenses, get bank insurance, define your brand, create your website, and set up your phone system.

Are banks profitable businesses?

Yes, banks are profitable businesses in the US. They earn money through interest on loans and fees for other services. The commercial banking industry in the US has grown 5.6% per year on average between 2018 and 2023.

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Writing a Bank Business Plan

When it comes to seeking funding from a bank or other financial institution, one of the most important things you can do is have a well-written business plan . This document will not only give potential lenders and investors an idea of your company’s current position and future goals but will also provide them with a clear understanding of the risks involved in lending you money or investing in your business.

What is a Business Plan?

A business plan is a document that provides a detailed description of a business, its products or services, its market, and its financial projections. It is used to secure funding from lenders or investors and to provide guidance for the business’s future operations.

Why Write a Business Plan

There are several reasons why you might want to write a plan for your business, even if you’re not looking for funding, they are:

• To clarify your company’s purpose and direction
• To better understand your industry and customers
• To develop a realistic financial plan and accurate projections
• To identify potential risks and opportunities
• To track your company’s progress over time

An effective and well-written plan is helpful for potential investors and clarifies the plans you have for any future business partners.

Sources of Business Funding for Banks

There are many sources of business funding available to banks, including:

• Equity financing: This is when you sell a portion of your business to investors in exchange for capital. This can be a good option if you need a large amount of money quickly, as it doesn’t require you to pay back the funds over time.
• Debt financing: This is when you borrow money from a lender, such as a bank, in exchange for repayment plus interest. This type of financing can be helpful if you need to keep your cash flow low in the early stages of your business.
• Grants: There are several different government and private grants available to businesses, which can often be used for start-up costs or expansion.
• Venture capital: This is when you receive funding from a venture capitalist in exchange for a portion of your company’s equity. Venture capitalists typically invest their own personal savings in high-growth businesses with a lot of potential.

Resources to Write a Bank Business Plan

To write a bank business plan, you’ll need access to a variety of resources, including:

Sample Plans for Your Business

A good place to start is by looking at some sample plans for businesses in your industry. This will give you a good idea of the types of information to include in your own plan.

Business planning software

There are a number of software programs that can help you create professional-looking plans for your business.

Market Research

When writing a business plan for a bank, it’s important to include a section on your company’s market research. This will include detailed information about your industry, your market, and your competition.

Industry Analysis

In order to accurately describe your industry and the market for your products or services, you’ll need to conduct an industry analysis. This should include information about the size and growth of the industry, the key players in the industry, and any major trends or changes that are taking place.

Target Market Analysis

To effectively market your products or services, you need to understand who your target market is. This should include information about the demographics of your target customers (age, gender, income, etc.), psychographics (lifestyle preferences, interests, etc.), and geographic (location, region).

Competition Analysis

In order to differentiate your business from the competition, you’ll need to know what they’re offering and how they’re positioning themselves in the market. This should include a SWOT analysis (strengths, weaknesses, opportunities, threats) of your competitors.

Customer Segments

A customer segment is a group of customers who share common characteristics, such as age, income, location, or lifestyle preferences. When creating business plans for a bank, it’s important to identify and target your key customer segments. This will help you focus your marketing efforts and create products and services that appeal to your target market.

There are a variety of ways to segment customers, including:

• Demographics: Age, gender, income, location, etc.
• Psychographics: Lifestyle preferences, interests, etc.
• Behavior: How they interact with your brand, what channels they use to purchase products or services, etc.
• Usage: How often they purchase your product or service, how much they spend, etc.
• Value: How much they’re willing to pay for your product or service, how much they value customer service, etc.

Once you’ve identified your customers, you can create buyer personas. These are fictional characters that represent your ideal customer within each segment. Creating buyer personas will help you better understand your target market and create more effective marketing campaigns.

Financial templates

If you’re not familiar with financial terminology or calculations, use a financial template to help you develop your business’s financial projections as well as including an income statement and balance sheets.

Accounting and Legal Advice 

It’s important to seek out accounting and legal advice from professionals who can help ensure that your business plan is accurate and complete.

Bank Business Plan Template

While there is no one-size-fits-all template for writing a business plan, there are some key elements that should be included. Here is a brief overview of what should be included:

Executive Summary

This is a high-level overview of your company, its products or services, and its financial situation. Be sure to include information on your target market, your competitive advantage, and your plans for growth.

Company Description

This section provides more detail on your company, including its history, structure, and management team. Be sure to include information on your company’s mission and vision, as well as its values and goals.

Products and Services

Here you will describe your company’s products or services in detail, including information on your target market and your competitive advantage.

Market Analysis

In this section, you will provide an overview of your market, including demographic information and information on current and future trends. This is also a good section to add the marketing plan you have developed to appeal to potential customers.

Sales and Marketing

This section will detail your sales and marketing strategy, including information on your pricing, your distribution channels, and your promotion plans.

Financial projections

This is perhaps the most important section of your business plan, as it will provide lenders and investors with an idea of your company’s financial health. Be sure to include detailed information on your past financial performance, as well as your projections for future revenue and expenses. This is also a good section to include your cash flow statements, income statements, and information about any bank accounts opened for your business.

This is where you will include any supporting documents, such as your financial statements, marketing materials, or product data sheets.

While this is not an exhaustive list of everything that should be included in your bank business plan, it covers the most important elements. By taking the time to write a well-thought-out and detailed business plan, you will increase your chances of securing the funding you need to grow your business.

Opening a bank is a detailed and complex process, but it can be enormously rewarding both professionally and financially. The best way to increase your chances of success is to write a business plan that outlines all aspects of opening and running a bank. This document should include market analysis, organizational structure, financial projections, and more. Our team has extensive experience helping entrepreneurs open banks. We have created a comprehensive business plan template that covers all the key points you need to consider when writing your own business plan. By following our template, you can be sure that you haven’t missed any essential elements in your planning process. Investing in professional help when writing your business plan gives you the best chance for success when opening a new bank.

Bank Business Plan Template FAQs

Do i need to use a business plan template.

There is no one-size-fits-all answer to this question. If you are seeking funding from a lender or investor, they may have specific requirements for the format and content of your business plan. In other cases, using a template can be helpful in ensuring that you include all of the important information in your plan.

Where can I find a business plan template?

There are a number of resources that offer business plan templates, including the Small Business Administration (SBA) and the U.S. Chamber of Commerce. Additionally, many software programs that offer business planning tools also include templates.

How long should my business plan be?

Again, there is no one-size-fits-all answer to this question. The length of your business plan will depend on the complexity of your business and the amount of detail you need to include. In general, however, most business plans range from 20 to 50 pages.

Do I need to hire a professional to help me write my business plan?

While you are not required to hire a professional to write your business plan, it may be helpful to do so. A professional can help you ensure that your plan is well-written and free of errors. Additionally, they can offer advice on how to best structure your plan and make it more likely to succeed.

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• Best for customer satisfaction
• Best for older adults
• Best for long-term care
• Best for high returns
• Best for agent support
• Best for term life
• Why you should trust us

Best Life Insurance of June 2024

Affiliate links for the products on this page are from partners that compensate us (see our advertiser disclosure with our list of partners for more details). However, our opinions are our own. See how we rate insurance products to write unbiased product reviews.

Life insurance is as complicated as the policyholders and beneficiaries who use it. That means there's no single "best" life insurance company. Instead, you can find the best option based on what you want or what you prioritize.

Summary of the Best Life Insurance Companies

• Best for customer satisfaction:   State Farm Life Insurance
• Best for older adults:   Prudential Life Insurance
• Best for agent support:   New York Life Insurance
• Best for long-term care:   Columbus Life
• Best for high returns:   Allianz Life
• Best for term life:   North American Company

Best Life Insurance Companies of 2024

While there is no such thing as the objective best life insurance policy, you will be able to find the best insurance policy for your specific needs. Here are our picks for the best life insurance companies, whether you want to use your life insurance policy to build wealth through cash value or you're just looking for a term life insurance policy .

Best Life Insurance for Customer Satisfaction: State Farm Life Insurance

Bundling is standard, and agents often quote with multiple discounts.

• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Best in JD Power customer service ratings
• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Company offers a range of different insurance products to meet buyer needs
• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Agents are knowledgeable about its products
• con icon Two crossed lines that form an 'X'. Life insurance products are conservative and limited
• con icon Two crossed lines that form an 'X'. Buyers may be subject to multi-year waiting periods before they qualify for full payouts on life insurance policies
• con icon Two crossed lines that form an 'X'. State Farm agents cannot offer alternative options if State Farm is unable to bind a life insurance policy

State Farm is one of the insurance industry's most prominent insurers offering auto, home, and other insurance. Bundling is standard, and agents often quote with multiple discounts. Its term, universal, and whole life insurance products are no exception.

• Life insurance products include term and permanent life
• Ranks highly for customer satisfaction

State Farm Life Insurance gets the best life insurance ranking in J.D Power's Individual Life Insurance Study, with a score of 843/1,000. The company is also ranked A++ with AM Best for its financial stability with term, universal, and whole life insurance options. 

All State Farm policies have to be purchased through a State Farm agent. Your agent can help you bundle and save or buy one policy. State Farm is also among the companies offering "survivorship universal life insurance ," which means the policy covers two people, and it kicks in after the second person dies. Couples looking to maximize their death benefit for beneficiaries with one premium payment each month may enjoy lower overall costs.

State Farm agents can run quotes and compare options to find the right plans for each applicant. The range of options, discounts, and familiar name all contribute to the popularity of State Farm's life insurance.

Read our State Farm Life Insurance review here.

Best Life Insurance for Older Adults: Prudential VUL Protector Life Insurance

Offers aggressive financial plans.

• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Available in all 50 states (New York residents may have different plans)
• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Buyers can withdraw money to pay for nursing home bills due to severe illness or disability
• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Knowledgeable agents who can walk you through your options
• con icon Two crossed lines that form an 'X'. Financial returns are limited
• con icon Two crossed lines that form an 'X'. Limited policy options for seniors and other groups who might struggle to find life insurance

The aggressive financial plans offered by Prudential may appeal to many younger buyers and those with a stable income. However, those with lower income or buyers who aren't sure about the financial system may be more hesitant to engage with Prudential. Like many other industry giants, Prudential is working to change this perception.

Prudential Life Insurance is available in all states except New York. New York residents can buy the Pruco Life of New Jersey VUL Protector plan. This plan allows buyers to pull money out of their plan to pay for nursing home expenses. Cash value policy premiums are fixed, so you won't have to worry about extra costs later on. Internal costs are low, which minimizes risk. Due to age, many older adults want a safe investment option for their money. Prudential VUL Protector invests to avoid loss. That also means you're not as likely to see big increases in your available funds outside of what you deposit.

Read our Prudential Life Insurance review here.

Best Life Insurance for Long-Term Care: Columbus Life Insurance

Offers lien method to makes it easier to calculate the financial impact of pulling money out early.

• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Buyers can pull money out for medical and other bills in the event of disease or disability
• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Columbus uses lien method to simplify accelerated death payments
• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Company offers a wide range of riders to customize policies
• con icon Two crossed lines that form an 'X'. Premiums may be higher than competitors
• con icon Two crossed lines that form an 'X'. Term policies are not guaranteed to be converted to whole

Best for long-term care and accelerated death benefits.

Columbus Life offers a wide range of riders to customize your policy with affordable premiums. The company also allows you to convert term policies to whole life insurance policies until the end of your term (generally around age 70). For this and many other reasons, customer satisfaction is high.

When using living health benefits (otherwise known as accelerated death benefits), buyers are allowed to pull money from policies early to pay for medical bills, living costs, etc. under certain circumstances. Most companies use a discounted death benefit, which reduces your final payout using two models. Columbus uses the lien method, which makes it easier to calculate the financial impact of pulling money out early.

Best Life Insurance for High Returns on Income: Allianz Life Insurance

Offers life insurance policies for foreign nationals with H-1B visas.

• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Plans offer high returns on investment
• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Great for investment and long-term retirement planning
• Check mark icon A check mark. It indicates a confirmation of your intended interaction. May increase your income by as much as 20%
• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Allianz offers plans for foreign nationals including H-1B visas
• con icon Two crossed lines that form an 'X'. Plans are meant specifically for high-income adults, alternatives may not be offered

Best for investing and high returns on income.

Allianz Life plans are geared towards high-income adults looking for more tax-free income. Allianz offers a 40% multiplier bonus with a 1% annual assets charge. In short, the professionals managing your investments take 10%. Overall, your investments would pull in an extra 14%-1% asset charge. This means you end up with 3% more than what you deposit every year your life policy is active. This plan offers strong returns when using a life policy to supplement your retirement savings. Allianz also offers specialized plans to grow your income by as much as 20% according to some estimates.

Of note: Allianz also offers plans for foreign nationals, including those with H-1B visas.

Best Life Insurance for Agent Support: New York Life Insurance

Offers aggressive financial products and extensively trained agents.

• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Strong life insurance options for financial planning and wealth building
• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Policies available nationwide
• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Knowledgeable life insurance agents
• con icon Two crossed lines that form an 'X'. May require a medical exam
• con icon Two crossed lines that form an 'X'. Buyers looking for more modest policies may not find the most competitive pricing

If you're preparing for a comfortable retirement or looking to build generational wealth, New York Life is one of the strongest options. If you have questions or genuinely want to understand your life insurance options, New York Life agents are among the most qualified professionals in the business.

• Life insurance provider with policies available across the US

New York Life Insurance agents go through extensive training before they ever hit the sales floor. What does this get you? Policies vary widely, and New York Life offers both large and small payouts. Some policies have significant penalties for early withdrawal, but taking a loan offers more options. Whatever your questions, New York Life agents are trained to offer comprehensive support giving you accurate information about its policies every time. The company comes in at position eight in J.D. Power's latest life insurance customer satisfaction study.

Read our New York Life Insurance review here.

Best Life Insurance for Term Life: North American Life Insurance

Offers term policies alongside accelerated death benefits for critical, chronic, and terminal illnesses and more.

• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Offers accelerated death benefits for critical, chronic, and terminal illnesses
• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Offers conversion for life policies up to 70 years old
• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Term policies can be renewed up to age 95 for qualifying applicants
• con icon Two crossed lines that form an 'X'. Not all term policies qualify for renewal or conversion

Best Term Policy.

North American Company offers term policies alongside accelerated death benefits for critical, chronic, and terminal illnesses and more. The company allows one conversion on a 20-year policy at 15 years or 70 years old (whichever is earlier). The conversion cannot happen later than the five-year marker regardless of which policy you choose or the length. North American Company also offers a term policy with a lower premium renewable up to the age of 95 for qualifying insureds.

Types of Life Insurance

While there's many different types of life insurance policies , broadly speaking, there are two types of life insurance: temporary and permanent. Let's go over each in detail.

Temporary life insurance

Temporary life insurance is often called term life insurance. This type of policy covers you for a set amount of time before expiring, usually between 10-30 years. If you pass away after your policy expires, your family won't receive any benefits. Additionally, your policy won't accrue cash value like a permanent policy. That said, some term life insurance policies offer a conversion from term to whole life insurance, so you can extend your coverage. 

Because its benefits aren't guaranteed, term life policies are generally cheaper than permanent life insurance. That said, the vast majority of term life insurance policies never pay out. on

Permanent life insurance

Permanent life insurance is an umbrella term for a variety of life insurance policies that will insure you indefinitely and guarantee a payout as long as you maintain your policy. Policy types that fall under permanent life insurance includes:

• Whole life insurance
• Universal life insurance
• Variable life insurance
• Variable universal life insurance
• Simplified life insurance
• Guaranteed issue life insurance

These policies vary widely in purpose and intended buyers, but all guarantee death benefits to your loved ones. Some permanent life insurance policies, like whole, universal, and variable have a cash value component , which you can use as a savings tool or to leave your heirs a larger death benefit.

How to Pick the Best Life Insurance Policy for You

Finding the right fit in life insurance starts with finding a trusted insurance agent. Because there are so many state regulations, shopping for homeowners or auto insurance can be easily done online. Life insurance is not required. So it's a voluntary purchase. Many buyers don't know what they need or when they need it. Before making your selection, consider a few things:

Some companies will sell you a policy for your child as soon as they're born. While this may seem morbid, early sign-up means lower rates for a policy your child could enjoy in the future. Regardless, early sign-up equates to more policy for lower premiums and a higher likelihood of acceptance. At 20, you may be healthier and be able to pay into the policy for a longer period compared to when you're 50 with more age-related conditions.

As a general rule, never agree to more than you can afford. For the average life insurance agent, their job is to sell you a large policy with a large commission. Consider not only how much you make now, but how likely your current income is to continue. If you work on a project basis and your project is scheduled to end in 12 months, you may want to reconsider a policy premium outside your monthly savings.

How much are you prepared to buy? Some people only want a small policy to cover funerals and other end-of-life expenses. Others build a life policy into their retirement plan. Whatever direction you're going, involving a financial planner could help you make the right decisions. Depending on the carrier, customers can also compare set limits with index universal life policies, which set no limit. These policies never expire, and the value builds over the entirety of your life.

Living Benefits

Life happens unexpectedly. You could be healthy one day and in the hospital the next. Many life policies offer living benefits. These allow you to draw a limited amount out of your policy to cover medical and other bills you cannot pay while sick.

Much like a 401(k), many life insurance policies have penalties for early withdrawal. No matter what policy you want, this question is critical to an informed decision. It's a question of how early you can withdraw and how much you'll lose from the total to have the money in 10 years instead of 30 or after death.

Some policies require insured parties to pay premiums for at least one year before any significant payout would be available. Suicide exclusions are common. Even with no medical exam policies, the company may still do a check for known conditions. An insurance company has to mitigate its risk.

Flexibility

Once you've been denied a life insurance policy, a mark goes on your record. No matter the reasons, other insurance companies may deny you coverage based on the first denial. So consider your whole situation and choose your policy carefully before you submit any applications. Some policies have greater flexibility if you lose your job or otherwise can't make payments. Others will lapse if you miss even one payment.

Payment Type

Even within whole life or term life insurance policies, customers have the option to choose guaranteed fixed or variable rates. Some have guaranteed payouts, but you'll need to ask your agent for details.

What is your intended use? Why are you shopping for a life insurance policy in the first place, and what are your goals? Many successful financial planners also have a background in life insurance. So while they may not be able to find you a specific life insurance policy, financial planners can help you set out a blueprint for your purchase.

Why You Should Trust Us: How We Reviewed the Best Life Insurance Companies

In life insurance, it's easy to get "sold a bill of goods." Many life insurance agents pass a state test to be thrown into the deep end. Agents sell the company product, but not all know the products. In this vein, we look at the products each company offers. We also look at agent training.

A good life insurance agent may not volunteer all facts upfront. But a company's agents should answer questions about its products accurately and in a way the average consumer can digest. Agents should be able to inform you about the long-term benefits and limitations. This will help customers find the right policy for their long-term plan.

We consider affordability, policy sizes available, and performance for a comprehensive assessment in our insurance rating methodology . If you can, we recommend also working with a financial advisor to make a plan for your future with life insurance.

Our Expert Panel for The Best Life Insurance Companies

To inform our choices for the best life insurance companies, we spoke with the following experts:

• Paul LaPiana , head of product at MassMutual
• Barbara Pietrangelo , CFP, CLU, and chair of the nonprofit Life Happens
• Wykeeta Peel , Corporate Vice President and Market Manager, African American Market Unit at New York Life

The Experts' Advice on Choosing The Best Life Insurance for You

How much life insurance coverage do you believe the average buyer should have.

Paul LaPiana, Head of Product at MassMutual

"There are different approaches to determining how much life insurance you need. One is the 'human life' approach, which estimates the current value of your future earning potential. Another is securing specific coverage to pay off debts such as a mortgage or provide for the education of children. A comprehensive protection plan should provide the right amount of coverage over the course of your working life and into retirement."

Barbara A. Pietrangelo, Chair of Life Happens

"There is no one-size-fits-all life insurance policy because everyone is different. One way to get a rough estimate is to multiply your income by 10 to 15; another is adding $100,00 to that amount, should you have a child and anticipate college education expenses.

Your best bet is to talk to a financial professional or use the Life Insurance Needs Calculator on LifeHappens.org to analyze what's right for you."

Wykeeta Peel, Corporate Vice President & Market Manager African American Market Unit at New York Life

"As you consider what policy best meets your needs, it can help to answer four key questions: First, how much death benefit do you need? Second, how long will you need that coverage? Third, what is your budget (or how much monthly premium can you afford to pay?), and finally, what is your investment risk tolerance?

To determine how much death benefit makes sense, it's helpful to think beyond using life insurance to cover funeral expenses and consider whether anyone is relying on the policy owner's income to maintain a lifestyle, pay rent or a mortgage, or fund a child's education and for how long.

There are various rules of thumb regarding the right amount of Life insurance coverage. Some tips can be found online, but they only provide an estimate and don't necessarily factor in an individual's specific needs. In my opinion, human guidance, powered by technology, is required. Basically, it comes down to how much money your loved ones would need to remain on firm financial ground if your earnings were no longer in the picture and that is different for everyone."

What is the biggest opportunity you see for improvement in the life insurance industry?

"Increased accessibility through digital and other channels as well as through underwriting enhancements. Increased tailoring of products and features. And an increased emphasis on health and wellness programs."

"Having enough qualified insurance professionals to walk potential buyers through the multiple benefits of life insurance will be pivotal to the growth of the industry. Education is a key factor here, as professional agents also need to be able to explain life insurance and its benefits in an easy, digestible way, especially when there are so many misconceptions about life insurance."

"The need for life insurance is greater than ever. In fact, a recent New York Life Wealth Watch survey found that 37% of adults have been thinking about life insurance more often these days – and half of adults report that financial products that provide protection (50%) and reliability (50%) are more important now compared to last year. This may be especially true for middle-market and Cultural Market families.

Our organizational structure of having Cultural Market agents embedded in the communities where we live and work allows us to understand the needs of diverse communities and develop solutions that resonate with them."

What advice would you give to buyers who are debating whether or not to buy life insurance?

"It is difficult to say with any certainty how healthy you will be years from now. That's why securing life insurance, and insuring your insurability, today, when you are the youngest you'll ever be again, and perhaps your healthiest is a wise decision."

"Do you love someone? If the answer is yes, then life insurance is certainly something you should consider. Many buy gifts and experiences to express their love, but haven't considered that life insurance is just another way to say I love you. Nothing says support like ensuring your family's financial security and peace of mind."

"If you have someone depending on your income, you should consider purchasing life insurance. A death benefit from a life insurance policy can replace income from the loss of a breadwinner, ensure a family can stay in their home, fund educational or retirement expenses, address debt and so much more.

A life insurance policy can also help you grow your family's wealth over time. Once the risk of an unexpected loss has been managed, you can begin to think more broadly about your family's financial future. Life insurance can enable your mindset to shift from death to growth."

What's the most important thing buyers should look for when choosing a life insurance agent/company to buy from?

"With life insurance, you are securing a future commitment that may be decades away. Research the company behind the policy to ensure it has high financial strength ratings, longevity, and an excellent track record of paying claims."

"When looking for an insurance agent or company, be sure to do your research. When comparing companies, be sure to remember that the policy features that fit you and your loved ones best is the most important factor. Don't automatically assume you should buy from the higher-rated company.

If the policy from the other company has more of what you're looking for, it might be the better choice. If you're unsure where to start, try the Life Happens Agent Locator to find an insurance professional in your area."

• "The insurers' track record: At its core, life insurance is protection - a hedge against the unexpected - and you are paying premiums in exchange for the promise that the insurer will be there when you need them, so the financial strength and track record of the company backing your policy is critical.
• Customer service: Are service professionals available by phone and digital channels? Is there is an online dashboard where you can manage your policy? Beyond ensuring assistance is available after you purchase a policy, it's also critical to ensure you have access to trusted advice and guidance before you buy.
• Flexibility in conversion: How easy is it to change? Life can be unpredictable and while term insurance can cover your loved ones through a critical period of time, you may decide that access to cash value is an important piece of your strategy.
• Accelerated online applications : Online applications are convenient but don't replace human guidance. Keep in mind that accelerated online applications may have a maximum coverage amount, meaning that you may not be able to get all the coverage you may need exclusively through an online process.
• A range of payment options: It's important to understand how often you're required to make premium payments and whether and how often you can change the frequency of payments."

Best Life Insurance FAQs

According to JD Power's 2023 life insurance study, State Farm is the highest-rated life insurance company when it comes to overall customer satisfaction. However, you still may want to shop around for quotes from various insurers if you're looking to purchase a new policy.

There isn't one best life insurance company, because the best option for you will depend on the type of policy you're looking for. It's best to work with a qualified insurance agent to help you find the best coverage. If you're deciding between multiple similar options, it's also worth consulting J.D. Power's life insurance customer satisfaction study . The latest study ranks State Farm as the top pick for individual life insurance, outpacing Nationwide by three points.

The best type of life insurance policy for you will differ from someone else's, as your policy should be tailored to your needs. The best policy for you will be affordable and will offer the benefits best suited to your situation. For example, some policies are only meant to cover end-of-life expenses such as burial and funeral arrangements, whereas others include living benefits like a cash value insurance plan , which you can borrow against during your lifetime.

Some life insurance policies are advertised as "no medical exam." This doesn't mean the insurer won't ask you about known conditions or look at medical records. Policies with no medical exam also tend to offer lower benefits with higher premiums. Most companies have a network of medical examiners, some of whom can come to your home. You can find our guide on the best no exam life insurance here.

Each situation is different and requires a knowledgeable life insurance agent to assess your best options. Bring all your questions and the coverage you're looking for to an insurance agent near you to explore your options.

Editorial Note: Any opinions, analyses, reviews, or recommendations expressed in this article are the author’s alone, and have not been reviewed, approved, or otherwise endorsed by any card issuer. Read our editorial standards .

Please note: While the offers mentioned above are accurate at the time of publication, they're subject to change at any time and may have changed, or may no longer be available.

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• Main content

How To Start A Business In 11 Steps (2024 Guide)

Updated: Apr 7, 2024, 1:44pm

Table of Contents

Before you begin: get in the right mindset, 1. determine your business concept, 2. research your competitors and market, 3. create your business plan, 4. choose your business structure, 5. register your business and get licenses, 6. get your finances in order, 7. fund your business, 8. apply for business insurance, 9. get the right business tools, 10. market your business, 11. scale your business, what are the best states to start a business, bottom line, frequently asked questions (faqs).

Starting a business is one of the most exciting and rewarding experiences you can have. But where do you begin? There are several ways to approach creating a business, along with many important considerations. To help take the guesswork out of the process and improve your chances of success, follow our comprehensive guide on how to start a business. We’ll walk you through each step of the process, from defining your business idea to registering, launching and growing your business .

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The public often hears about overnight successes because they make for a great headline. However, it’s rarely that simple—they don’t see the years of dreaming, building and positioning before a big public launch. For this reason, remember to focus on your business journey and don’t measure your success against someone else’s.

Consistency Is Key

New business owners tend to feed off their motivation initially but get frustrated when that motivation wanes. This is why it’s essential to create habits and follow routines that power you through when motivation goes away.

Take the Next Step

Some business owners dive in headfirst without looking and make things up as they go along. Then, there are business owners who stay stuck in analysis paralysis and never start. Perhaps you’re a mixture of the two—and that’s right where you need to be. The best way to accomplish any business or personal goal is to write out every possible step it takes to achieve the goal. Then, order those steps by what needs to happen first. Some steps may take minutes while others take a long time. The point is to always take the next step.

Most business advice tells you to monetize what you love, but it misses two other very important elements: it needs to be profitable and something you’re good at. For example, you may love music, but how viable is your business idea if you’re not a great singer or songwriter? Maybe you love making soap and want to open a soap shop in your small town that already has three close by—it won’t be easy to corner the market when you’re creating the same product as other nearby stores.

If you don’t have a firm idea of what your business will entail, ask yourself the following questions:

• What do you love to do?
• What do you hate to do?
• Can you think of something that would make those things easier?
• What are you good at?
• What do others come to you for advice about?
• If you were given ten minutes to give a five-minute speech on any topic, what would it be?
• What’s something you’ve always wanted to do, but lacked resources for?

These questions can lead you to an idea for your business. If you already have an idea, they might help you expand it. Once you have your idea, measure it against whether you’re good at it and if it’s profitable.

Your business idea also doesn’t have to be the next Scrub Daddy or Squatty Potty. Instead, you can take an existing product and improve upon it. You can also sell a digital product so there’s little overhead.

What Kind of Business Should You Start?

Before you choose the type of business to start, there are some key things to consider:

• What type of funding do you have?
• How much time do you have to invest in your business?
• Do you prefer to work from home or at an office or workshop?
• What interests and passions do you have?
• Can you sell information (such as a course), rather than a product?
• What skills or expertise do you have?
• How fast do you need to scale your business?
• What kind of support do you have to start your business?
• Are you partnering with someone else?
• Does the franchise model make more sense to you?

Consider Popular Business Ideas

Not sure what business to start? Consider one of these popular business ideas:

• Start a Franchise
• Start a Blog
• Start an Online Store
• Start a Dropshipping Business
• Start a Cleaning Business
• Start a Bookkeeping Business
• Start a Clothing Business
• Start a Landscaping Business
• Start a Consulting Business
• Start a Photography Business
• Start a Vending Machine Business

Most entrepreneurs spend more time on their products than they do getting to know the competition. If you ever apply for outside funding, the potential lender or partner wants to know: what sets you (or your business idea) apart? If market analysis indicates your product or service is saturated in your area, see if you can think of a different approach. Take housekeeping, for example—rather than general cleaning services, you might specialize in homes with pets or focus on garage cleanups.

Primary Research

The first stage of any competition study is primary research, which entails obtaining data directly from potential customers rather than basing your conclusions on past data. You can use questionnaires, surveys and interviews to learn what consumers want. Surveying friends and family isn’t recommended unless they’re your target market. People who say they’d buy something and people who do are very different. The last thing you want is to take so much stock in what they say, create the product and flop when you try to sell it because all of the people who said they’d buy it don’t because the product isn’t something they’d buy.

Secondary Research

Utilize existing sources of information, such as census data, to gather information when you do secondary research. The current data may be studied, compiled and analyzed in various ways that are appropriate for your needs but it may not be as detailed as primary research.

Conduct a SWOT Analysis

SWOT stands for strengths, weaknesses, opportunities and threats. Conducting a SWOT analysis allows you to look at the facts about how your product or idea might perform if taken to market, and it can also help you make decisions about the direction of your idea. Your business idea might have some weaknesses that you hadn’t considered or there may be some opportunities to improve on a competitor’s product.

Asking pertinent questions during a SWOT analysis can help you identify and address weaknesses before they tank your new business.

A business plan is a dynamic document that serves as a roadmap for establishing a new business. This document makes it simple for potential investors, financial institutions and company management to understand and absorb. Even if you intend to self-finance, a business plan can help you flesh out your idea and spot potential problems. When writing a well-rounded business plan, include the following sections:

• Executive summary: The executive summary should be the first item in the business plan, but it should be written last. It describes the proposed new business and highlights the goals of the company and the methods to achieve them.
• Company description: The company description covers what problems your product or service solves and why your business or idea is best. For example, maybe your background is in molecular engineering, and you’ve used that background to create a new type of athletic wear—you have the proper credentials to make the best material.
• Market analysis: This section of the business plan analyzes how well a company is positioned against its competitors. The market analysis should include target market, segmentation analysis, market size, growth rate, trends and a competitive environment assessment.
• Organization and structure: Write about the type of business organization you expect, what risk management strategies you propose and who will staff the management team. What are their qualifications? Will your business be a single-member limited liability company (LLC) or a corporation ?
• Mission and goals: This section should contain a brief mission statement and detail what the business wishes to accomplish and the steps to get there. These goals should be SMART (specific, measurable, action-orientated, realistic and time-bound).
• Products or services: This section describes how your business will operate. It includes what products you’ll offer to consumers at the beginning of the business, how they compare to existing competitors, how much your products cost, who will be responsible for creating the products, how you’ll source materials and how much they cost to make.
• Background summary: This portion of the business plan is the most time-consuming to write. Compile and summarize any data, articles and research studies on trends that could positively and negatively affect your business or industry.
• Marketing plan: The marketing plan identifies the characteristics of your product or service, summarizes the SWOT analysis and analyzes competitors. It also discusses how you’ll promote your business, how much money will be spent on marketing and how long the campaign is expected to last.
• Financial plan: The financial plan is perhaps the core of the business plan because, without money, the business will not move forward. Include a proposed budget in your financial plan along with projected financial statements, such as an income statement, a balance sheet and a statement of cash flows. Usually, five years of projected financial statements are acceptable. This section is also where you should include your funding request if you’re looking for outside funding.

Learn more: Download our free simple business plan template .

Come Up With an Exit Strategy

An exit strategy is important for any business that is seeking funding because it outlines how you’ll sell the company or transfer ownership if you decide to retire or move on to other projects. An exit strategy also allows you to get the most value out of your business when it’s time to sell. There are a few different options for exiting a business, and the best option for you depends on your goals and circumstances.

The most common exit strategies are:

• Selling the business to another party
• Passing the business down to family members
• Liquidating the business assets
• Closing the doors and walking away

Develop a Scalable Business Model

As your small business grows, it’s important to have a scalable business model so that you can accommodate additional customers without incurring additional costs. A scalable business model is one that can be replicated easily to serve more customers without a significant increase in expenses.

Some common scalable business models are:

• Subscription-based businesses
• Businesses that sell digital products
• Franchise businesses
• Network marketing businesses

Start Planning for Taxes

One of the most important things to do when starting a small business is to start planning for taxes. Taxes can be complex, and there are several different types of taxes you may be liable for, including income tax, self-employment tax, sales tax and property tax. Depending on the type of business you’re operating, you may also be required to pay other taxes, such as payroll tax or unemployment tax.

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When structuring your business, it’s essential to consider how each structure impacts the amount of taxes you owe, daily operations and whether your personal assets are at risk.

An LLC limits your personal liability for business debts. LLCs can be owned by one or more people or companies and must include a registered agent . These owners are referred to as members.

• LLCs offer liability protection for the owners
• They’re one of the easiest business entities to set up
• You can have a single-member LLC
• You may be required to file additional paperwork with your state on a regular basis
• LLCs can’t issue stock
• You’ll need to pay annual filing fees to your state

Limited Liability Partnership (LLP)

An LLP is similar to an LLC but is typically used for licensed business professionals such as an attorney or accountant. These arrangements require a partnership agreement.

• Partners have limited liability for the debts and actions of the LLP
• LLPs are easy to form and don’t require much paperwork
• There’s no limit to the number of partners in an LLP
• Partners are required to actively take part in the business
• LLPs can’t issue stock
• All partners are personally liable for any malpractice claims against the business

Sole Proprietorship

If you start a solo business, you might consider a sole proprietorship . The company and the owner, for legal and tax purposes, are considered the same. The business owner assumes liability for the business. So, if the business fails, the owner is personally and financially responsible for all business debts.

• Sole proprietorships are easy to form
• There’s no need to file additional paperwork with your state
• You’re in complete control of the business
• You’re personally liable for all business debts
• It can be difficult to raise money for a sole proprietorship
• The business may have a limited lifespan

Corporation

A corporation limits your personal liability for business debts just as an LLC does. A corporation can be taxed as a C corporation (C-corp) or an S corporation (S-corp). S-corp status offers pass-through taxation to small corporations that meet certain IRS requirements. Larger companies and startups hoping to attract venture capital are usually taxed as C-corps.

• Corporations offer liability protection for the owners
• The life span of a corporation is not limited
• A corporation can have an unlimited number of shareholders
• Corporations are subject to double taxation
• They’re more expensive and complicated to set up than other business structures
• The shareholders may have limited liability

Before you decide on a business structure, discuss your situation with a small business accountant and possibly an attorney, as each business type has different tax treatments that could affect your bottom line.

Helpful Resources

• How To Set Up an LLC in 7 Steps
• How To Start a Sole Proprietorship
• How To Start a Corporation
• How To Start a Nonprofit
• How To Start a 501(c)(3)

There are several legal issues to address when starting a business after choosing the business structure. The following is a good checklist of items to consider when establishing your business:

Choose Your Business Name

Make it memorable but not too difficult. Choose the same domain name, if available, to establish your internet presence. A business name cannot be the same as another registered company in your state, nor can it infringe on another trademark or service mark that is already registered with the United States Patent and Trademark Office (USPTO).

Business Name vs. DBA

There are business names, and then there are fictitious business names known as “Doing Business As” or DBA. You may need to file a DBA if you’re operating under a name that’s different from the legal name of your business. For example, “Mike’s Bike Shop” is doing business as “Mike’s Bikes.” The legal name of the business is “Mike’s Bike Shop,” and “Mike’s Bikes” is the DBA.

You may need to file a DBA with your state, county or city government offices. The benefits of a DBA include:

• It can help you open a business bank account under your business name
• A DBA can be used as a “trade name” to brand your products or services
• A DBA can be used to get a business license

Register Your Business and Obtain an EIN

You’ll officially create a corporation, LLC or other business entity by filing forms with your state’s business agency―usually the Secretary of State. As part of this process, you’ll need to choose a registered agent to accept legal documents on behalf of your business. You’ll also pay a filing fee. The state will send you a certificate that you can use to apply for licenses, a tax identification number (TIN) and business bank accounts.

Next, apply for an employer identification number (EIN) . All businesses, other than sole proprietorships with no employees, must have a federal employer identification number. Submit your application to the IRS and you’ll typically receive your number in minutes.

Get Appropriate Licenses and Permits

Legal requirements are determined by your industry and jurisdiction. Most businesses need a mixture of local, state and federal licenses to operate. Check with your local government office (and even an attorney) for licensing information tailored to your area.

• Best LLC Services
• How To Register a Business Name
• How To Register a DBA
• How To Get an EIN for an LLC
• How To Get a Business License

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Open a Business Bank Account

Keep your business and personal finances separate. Here’s how to choose a business checking account —and why separate business accounts are essential. When you open a business bank account, you’ll need to provide your business name and your business tax identification number (EIN). This business bank account can be used for your business transactions, such as paying suppliers or invoicing customers. Most times, a bank will require a separate business bank account to issue a business loan or line of credit.

Hire a Bookkeeper or Get Accounting Software

If you sell a product, you need an inventory function in your accounting software to manage and track inventory. The software should have ledger and journal entries and the ability to generate financial statements.

Some software programs double as bookkeeping tools. These often include features such as check writing and managing receivables and payables. You can also use this software to track your income and expenses, generate invoices, run reports and calculate taxes.

There are many bookkeeping services available that can do all of this for you, and more. These services can be accessed online from any computer or mobile device and often include features such as bank reconciliation and invoicing. Check out the best accounting software for small business, or see if you want to handle the bookkeeping yourself.

Determine Your Break-Even Point

Before you fund your business, you must get an idea of your startup costs. To determine these, make a list of all the physical supplies you need, estimate the cost of any professional services you will require, determine the price of any licenses or permits required to operate and calculate the cost of office space or other real estate. Add in the costs of payroll and benefits, if applicable.

Businesses can take years to turn a profit, so it’s better to overestimate the startup costs and have too much money than too little. Many experts recommend having enough cash on hand to cover six months of operating expenses.

When you know how much you need to get started with your business, you need to know the point at which your business makes money. This figure is your break-even point.

In contrast, the contribution margin = total sales revenue – cost to make product

For example, let’s say you’re starting a small business that sells miniature birdhouses for fairy gardens. You have determined that it will cost you $500 in startup costs. Your variable costs are $0.40 per birdhouse produced, and you sell them for $1.50 each.

Let’s write these out so it’s easy to follow:

This means that you need to sell at least 456 units just to cover your costs. If you can sell more than 456 units in your first month, you will make a profit.

• The Best Business Checking Accounts
• The Best Accounting Software for Small Business
• How To Open a Bank Account

There are many different ways to fund your business—some require considerable effort, while others are easier to obtain. Two categories of funding exist: internal and external.

Internal funding includes:

• Personal savings
• Credit cards
• Funds from friends and family

If you finance the business with your own funds or with credit cards, you have to pay the debt on the credit cards and you’ve lost a chunk of your wealth if the business fails. By allowing your family members or friends to invest in your business, you are risking hard feelings and strained relationships if the company goes under. Business owners who want to minimize these risks may consider external funding.

External funding includes:

• Small business loans
• Small business grants
• Angel investors
• Venture capital
• Crowdfunding

Small businesses may have to use a combination of several sources of capital. Consider how much money is needed, how long it will take before the company can repay it and how risk-tolerant you are. No matter which source you use, plan for profit. It’s far better to take home six figures than make seven figures and only keep $80,000 of it.

Funding ideas include:

• Invoice factoring: With invoice factoring , you can sell your unpaid invoices to a third party at a discount.
• Business lines of credit: Apply for a business line of credit , which is similar to a personal line of credit. The credit limit and interest rate will be based on your business’s revenue, credit score and financial history.
• Equipment financing: If you need to purchase expensive equipment for your business, you can finance it with a loan or lease.
• Small Business Administration (SBA) microloans: Microloans are up to $50,000 loans that can be used for working capital, inventory or supplies and machinery or equipment.
• Grants: The federal government offers grants for businesses that promote innovation, export growth or are located in historically disadvantaged areas. You can also find grants through local and regional organizations.
• Crowdfunding: With crowdfunding , you can raise money from a large group of people by soliciting donations or selling equity in your company.

Choose the right funding source for your business by considering the amount of money you need, the time frame for repayment and your tolerance for risk.

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You need to have insurance for your business , even if it’s a home-based business or you don’t have any employees. The type of insurance you need depends on your business model and what risks you face. You might need more than one type of policy, and you might need additional coverage as your business grows. In most states, workers’ compensation insurance is required by law if you have employees.

Work With an Agent To Get Insured

An insurance agent can help determine what coverages are appropriate for your business and find policies from insurers that offer the best rates. An independent insurance agent represents several different insurers, so they can shop around for the best rates and coverage options.

Basic Types of Business Insurance Coverage

• Liability insurance protects your business against third-party claims of bodily injury, property damage and personal injury such as defamation or false advertising.
• Property insurance covers the physical assets of your business, including your office space, equipment and inventory.
• Business interruption insurance pays for the loss of income if your business is forced to close temporarily due to a covered event such as a natural disaster.
• Product liability insurance protects against claims that your products caused bodily injury or property damage.
• Employee practices liability insurance covers claims from employees alleging discrimination, sexual harassment or other wrongful termination.
• Workers’ compensation insurance covers medical expenses and income replacement for employees who are injured on the job.
• Best Small Business Insurance
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• How To Get Product Liability Insurance
• Your Guide to General Liability Insurance
• 13 Types of Small Business Insurance

Business tools can help make your life easier and make your business run more smoothly. The right tools can help you save time, automate tasks and make better decisions.

Consider the following tools in your arsenal:

• Accounting software : Track your business income and expenses, prepare financial statements and file taxes. Examples include QuickBooks and FreshBooks.
• Customer relationship management (CRM) software : This will help you manage your customer relationships, track sales and marketing data and automate tasks like customer service and follow-ups. Examples include Zoho CRM and monday.com.
• Project management software : Plan, execute and track projects. It can also be used to manage employee tasks and allocate resources. Examples include Airtable and ClickUp.
• Credit card processor : This will allow you to accept credit card payments from customers. Examples include Stripe and PayPal.
• Point of sale (POS) : A system that allows you to process customer payments. Some accounting software and CRM software have POS features built-in. Examples include Clover and Lightspeed.
• Virtual private network (VPN) : Provides a secure, private connection between your computer and the internet. This is important for businesses that handle sensitive data. Examples include NordVPN and ExpressVPN.
• Merchant services : When customers make a purchase, the money is deposited into your business account. You can also use merchant services to set up recurring billing or subscription payments. Examples include Square and Stripe.
• Email hosting : This allows you to create a professional email address with your own domain name. Examples include G Suite and Microsoft Office 365.

Many business owners spend so much money creating their products that there isn’t a marketing budget by the time they’ve launched. Alternatively, they’ve spent so much time developing the product that marketing is an afterthought.

Create a Website

Even if you’re a brick-and-mortar business, a web presence is essential. Creating a website doesn’t take long, either—you can have one done in as little as a weekend. You can make a standard informational website or an e-commerce site where you sell products online. If you sell products or services offline, include a page on your site where customers can find your locations and hours. Other pages to add include an “About Us” page, product or service pages, frequently asked questions (FAQs), a blog and contact information.

Optimize Your Site for SEO

After getting a website or e-commerce store, focus on optimizing it for search engines (SEO). This way, when a potential customer searches for specific keywords for your products, the search engine can point them to your site. SEO is a long-term strategy, so don’t expect a ton of traffic from search engines initially—even if you’re using all the right keywords.

Create Relevant Content

Provide quality digital content on your site that makes it easy for customers to find the correct answers to their questions. Content marketing ideas include videos, customer testimonials, blog posts and demos. Consider content marketing one of the most critical tasks on your daily to-do list. This is used in conjunction with posting on social media.

Get Listed in Online Directories

Customers use online directories like Yelp, Google My Business and Facebook to find local businesses. Some city halls and chambers of commerce have business directories too. Include your business in as many relevant directories as possible. You can also create listings for your business on specific directories that focus on your industry.

Develop a Social Media Strategy

Your potential customers are using social media every day—you need to be there too. Post content that’s interesting and relevant to your audience. Use social media to drive traffic back to your website where customers can learn more about what you do and buy your products or services.

You don’t necessarily need to be on every social media platform available. However, you should have a presence on Facebook and Instagram because they offer e-commerce features that allow you to sell directly from your social media accounts. Both of these platforms have free ad training to help you market your business.

• Best Website Builders
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• The Best E-Commerce Platforms
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To scale your business, you need to grow your customer base and revenue. This can be done by expanding your marketing efforts, improving your product or service, collaborating with other creators or adding new products or services that complement what you already offer.

Think about ways you can automate or outsource certain tasks so you can focus on scaling the business. For example, if social media marketing is taking up too much of your time, consider using a platform such as Hootsuite to help you manage your accounts more efficiently. You can also consider outsourcing the time-consumer completely.

You can also use technology to automate certain business processes, including accounting, email marketing and lead generation. Doing this will give you more time to focus on other aspects of your business.

When scaling your business, it’s important to keep an eye on your finances and make sure you’re still profitable. If you’re not making enough money to cover your costs, you need to either reduce your expenses or find ways to increase your revenue.

Build a Team

As your business grows, you’ll need to delegate tasks and put together a team of people who can help you run the day-to-day operations. This might include hiring additional staff, contractors or freelancers.

Resources for building a team include:

• Hiring platforms: To find the right candidates, hiring platforms, such as Indeed and Glassdoor, can help you post job descriptions, screen résumés and conduct video interviews.
• Job boards: Job boards such as Craigslist and Indeed allow you to post open positions for free.
• Social media: You can also use social media platforms such as LinkedIn and Facebook to find potential employees.
• Freelance platforms: Using Upwork, Freelancer and Fiverr can help you find talented freelancers for one-time or short-term projects. You can also outsource certain tasks, such as customer service, social media marketing or bookkeeping.

You might also consider partnering with other businesses in your industry. For example, if you’re a wedding planner, you could partner with a florist, photographer, catering company or venue. This way, you can offer your customers a one-stop shop for all their wedding needs. Another example is an e-commerce store that partners with a fulfillment center. This type of partnership can help you save money on shipping and storage costs, and it can also help you get your products to your customers faster.

To find potential partnerships, search for businesses in your industry that complement what you do. For example, if you’re a web designer, you could partner with a digital marketing agency.

You can also search for businesses that serve the same target market as you but offer different products or services. For example, if you sell women’s clothing, you could partner with a jewelry store or a hair salon.

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To rank the best states to start a business in 2024, Forbes Advisor analyzed 18 key metrics across five categories to determine which states are the best and worst to start a business in. Our ranking takes into consideration factors that impact businesses and their ability to succeed, such as business costs, business climate, economy, workforce and financial accessibility in each state. Check out the full report .

Starting a small business takes time, effort and perseverance. But if you’re willing to put in the work, it can be a great way to achieve your dreams and goals. Be sure to do your research, create a solid business plan and pivot along the way. Once you’re operational, don’t forget to stay focused and organized so you can continue to grow your business.

How do I start a small business with no money?

There are several funding sources for brand-new businesses and most require a business plan to secure it. These include the SBA , private grants, angel investors, crowdfunding and venture capital.

What is the best business structure?

The best business structure for your business will depend entirely on what kind of company you form, your industry and what you want to accomplish. But any successful business structure will be one that will help your company set realistic goals and follow through on set tasks.

Do I need a business credit card?

You don’t need one, but a business credit card can be helpful for new small businesses. It allows you to start building business credit, which can help you down the road when you need to take out a loan or line of credit. Additionally, business credit cards often come with rewards and perks that can save you money on business expenses.

Do I need a special license or permit to start a small business?

The answer to this question will depend on the type of business you want to start and where you’re located. Some businesses, such as restaurants, will require a special permit or license to operate. Others, such as home daycare providers, may need to register with the state.

How much does it cost to create a business?

The cost of starting a business will vary depending on the size and type of company you want to create. For example, a home-based business will be less expensive to start than a brick-and-mortar store. Additionally, the cost of starting a business will increase if you need to rent or buy commercial space, hire employees or purchase inventory. You could potentially get started for free by dropshipping or selling digital goods.

How do I get a loan for a new business?

The best way to get a loan for a new business is to approach banks or other financial institutions and provide them with a business plan and your financial history. You can also look into government-backed loans, such as those offered by the SBA. Startups may also be able to get loans from alternative lenders, including online platforms such as Kiva.

Do I need a business degree to start a business?

No, you don’t need a business degree to start a business. However, acquiring a degree in business or a related field can provide you with the understanding and ability to run an effective company. Additionally, you may want to consider taking some business courses if you don’t have a degree to learn more about starting and running a business. You can find these online and at your local Small Business Administration office.

What are some easy businesses to start?

One of the easiest businesses to start also has the lowest overhead: selling digital goods. This can include items such as e-books, online courses, audio files or software. If you have expertise in a particular area or niche, this is a great option for you. Dropshipping is also a great option because you don’t have to keep inventory. You could also buy wholesale products or create your own. Once you create your product, you can sell it through your own website or third-party platforms such as Amazon or Etsy.

What is the most profitable type of business?

There is no one answer to this question because the most profitable type of business will vary depending on a number of factors, such as your industry, location, target market and business model. However, some businesses tend to be more profitable than others, such as luxury goods, high-end services, business-to-business companies and subscription-based businesses. If you’re not sure what type of business to start, consider your strengths and interests, as well as the needs of your target market, to help you choose a profitable business idea.

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Katherine Haan is a small business owner with nearly two decades of experience helping other business owners increase their incomes.