• ABA: Proposed revisions to bad debt regulation need reworked
  • ABA Data Bank: Tooth Fairy Index declines for first time in five years
  • Podcast: How the ‘apolitical’ Fed moves during presidential elections
  • FATF pushes forward with beneficial ownership information guidance
  • Six ways for board directors to reduce the ‘unknown unknowns’
  • FDIC issues regulatory relief guidance for California
  • Nichols discusses ‘real-world impacts’ of regulatory tsunami
  • Mortgage rates rise
  • CFPB revises supervisory appeals process
  • Survey: Rewards credit cards most popular borrowing tool for small businesses

ABA Banking Journal

A Marketer’s Guide to Branch Planning

By Mary Ellen Georgas-Tellefsen

When was the last time you, as a bank marketer, visited a branch? Do you know what the branch managers are doing on the front lines every day to market the bank’s products and services? Have you asked for their insights on the customer experience? Or what they think about bank sales goals and marketing plans?

If you can’t remember the last time you visited a branch or talked with a branch manager…

You’ll want to finish reading this article and make an appointment to visit a branch as soon as possible. You’ll be amazed at what you learn and—if you are open to it—just how many insights and aha! moments you can have at a branch. These insights will help you build stronger value propositions, create more effective sales and cross-sell campaigns, make smarter spending decisions, and understand better what your customers really think of your bank.

You might be thinking that’s a crazy idea. Branch traffic is down, after all, and the number of U.S. bank branches is in decline. But consider these three things:

  • About half of new customers still choose a bank based on branch location.
  • Over half of new checking account sales occur in the branch channel.
  • For most banks, branches remain the most critical channel for delivering essential customer interactions and experiences.

Digital channels have not outmoded personal advice, guidance, or even certain transactions for many people—including millennials. This is especially true when it comes to big-ticket credit and investment decisions. Customer experience is about using all channels in a seamless way, including the branch.

Don’t assume branches are going away. Assume instead that you can help your branch managers find a better, more productive use of the branch space.

You’ve heard of banks reconfiguring branches or using extra branch space as a yoga studio, a community meeting space, or a coffee bar with free Wifi. Of course, it may not be logical or practical to turn every branch into the neighborhood coffee bar. The point is to identify the particular features most needed in each specific branch location. That could mean:

  • Work space for independent contributors—especially sole proprietors and small businesses—with secure Wifi and a quiet work environment
  • Small, hyper-efficient transaction zones—dedicated to high volume, digitally-oriented activity
  • Credit and lending answer centers staffed by knowledgeable advisors

These innovative ideas have the potential to bring more people into the branches for a specific purpose, utilize the space in a more cost-effective and profitable way, and introduce your brand to people who may not have considered your bank for their financial needs. Now, maybe they will.

Overcoming the consistency conundrum.

For years being a mass market retailer has meant consistency—an idea that has manifested as a cookie cutter approach to branches, offering all branch capabilities in all locations. The underlying philosophy was that every branch had to be all things to all people. But by sharing and analyzing better data from customer channel usage and branch traffic, we can challenge that philosophy and create branches that cater to the needs of the neighborhood.

At many institutions, bank management sets branch-level sales and retention goals from their offices. And in many cases, goals are based solely on historic performance—without real knowledge of what’s happening in the branches. As we’ve seen, this can lead to overly-aggressive behavior and poor sales protocols. Perhaps we’ve been looking at this all wrong. Perhaps we should be supporting each branch manager, and looking at each branch as an independent small business.

Here’s how to build a plan for branch success from the ground up, based on the knowledge we use in marketing every day.

Apply market opportunity analytics.

  • Determine whether market households and businesses are growing or shrinking in your bank’s geographies.
  • Identify which consumer and business segments are large and growing—and which are small and decreasing in size.
  • Assess what the branch manager knows about his or her neighborhood. Which Main Street businesses are opening/closing? Are home values increasing or decreasing? What about shifts in the local workforce, unemployment trends, and product inquiries and sales?
  • Realize that micro-trends could be one of the keys to success for the branch of the future. The branch manager is probably in the best position to know what’s happening in their neighborhood—and can help the bank capitalize on micro-trends and happenings.

Define bank strategy and value proposition.

  • Ensure there is a clearly articulated and differentiated value proposition that every bank employee can understand and communicate to customers and prospects.
  • Utilize the value proposition as ‘guide rails’ for assisting branch managers in creating and prioritizing sales and marketing plans.

Measure branch transaction trends.

  • Provide branch managers with a consistent set of key performance metrics and a performance dashboard so that they can see how they are doing against their own plan—and that of other branch managers.
  • Don’t forget that some of the most important performance metrics include omni-channel transaction and product usage patterns of customers domiciled in the branch, in addition to sales and customer retention stats.

Understand branch performance relative to peers.

  • Work with branch managers to conduct a strategic assessment of market and branch analytics. Perhaps some branches should be targeting cost savings and efficiencies while others should be hotbeds of sales and new customer acquisition.
  • Set appropriate goals for the appropriate branch by providing context, such as market and branch performance rankings. This allows the marketing team and senior management to help guide the direction of each branch plan. And it sets each branch manager up for success.

Devise appropriate marketing and sales programs.

  • Define branch-specific marketing and sales campaigns to fuel new-to-bank acquisition and raise awareness among key segments.
  • Provide calling lists of prospects, informed by branch goals, segmentation strategy, and analytics.
  • Design product bundles and communication standards that help managers to easily sell new products and upsell existing customer relationships.

You have an abundance of data that could help branch managers better understand their own small business.

But marketers aren’t always so good at sharing data with the front line. What if everyone in the organization could benefit from the huge trove of data being collected, so that across your network, branch managers are looking at consistent data? How cool it would be to have something analogous to a Google Analytics dashboard for every branch?

Branch managers would likely use the data to make decisions in diverse ways, and that’s the point. That’s because different branches should have different strategic directions, which might include:

  • Targeting efficiencies
  • Maintaining the base
  • Accelerating new-to-bank acquisition

Using data on a branch’s current and past performance, customer base, and potential of the market, each branch manager can create an informed plan for success.

Given the option to either close a branch or find a better way to utilize the space…

Branch managers often become extremely resourceful in suggesting creative ways to maintain branches and jobs. That’s because they understand the importance of their branch to the local community. And with guidance, they can create a business plan that ensures a level of profitability and the continued ability to contribute to a vibrant local community.

Branch managers have to know bank regulations, operations, financial product sets for consumers and businesses, security measures, and sales practices.  Simultaneously, they need to manage and motivate a team of people while also being great at customer service and relationship management. That’s one tall order. As banks increasingly embrace the capabilities that digital innovations bring to the customer experience, why not capitalize on the knowledge of your branch managers to help create your version of the bank of the future?

Or, at the very least, get their help in understanding options to make their branch and your marketing programs the best they can be.

If there is branch downstairs in your building, I challenge you to take a walk down there right now and introduce yourself to the branch manager. Make an appointment to grab lunch together—if they can spare the time—then spend an hour or two observing what happens in the branch. Observe the operation, the customers and the transactions. Then think about how your bank could make every customer experience better and what impact your findings have on how you do your job.

You might be surprised at your findings.

Mary Ellen Georgas is an experienced banking industry consultant and firm leader at Capital Performance Group, LLC , providing strategy, marketing, and digital channel consulting services to the financial services industry. Email: [email protected] .

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

Business Plan-DG

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 [Sample Template]

By: Author Tony Martins Ajaero

Home » Business ideas » Financial Service Industry » Bank

Open a Bank Business

Are you about starting a bank? If YES, here is a complete sample commercial bank business plan template & feasibility report you can use for FREE .

Okay, so we have considered all the requirements for starting a bank . We also took it further by analyzing and drafting a sample bank business marketing plan template backed up by actionable guerrilla marketing ideas for banks. So let’s proceed to the business planning section.

Why Start a Bank?

Starting your own bank is a huge step and needs a good deal of planning and preparation. Extensive information about the founders, the business plan, senior management team, finances, capital adequacy, risk management infrastructure, and other relevant factors must be provided to the appropriate authorities.

There are also a number of legal regulations and requirements that must be fulfilled in order to start your own bank. Some of these requirements are dependent upon the regulations in the niche you wish to establish your bank.

As hard as the task of starting a bank can be, anyone who wishes to start their own bank is able to enjoy the many benefits of making a major investment. Although the process of registering and setting up a bank involves lengthy planning and a relatively complex licensing procedure, once it is completed, the owner is able to conduct financial activity in their chosen niche.

Note that the very first step when starting your bank is to choose the niche and type of activity which you wish to engage in. Before you obtain the necessary licensing from the financial regulatory body, it is very crucial you identify whether you wish to specialize in investment banking or trade finance.

The advantages of owning your own bank are huge and include the potential to make large profits during a short period.

Note that if you know your target market and your target market’s specific requirements, you will be in a better position to provide a range of attractive services. To successfully start and run this business, it is advised you seek the help of a professional consultancy firm.

Through the advice and guidance of expert consultants, you will be able to establish a banking institution in a professional manner. Also have it in mind that any proposed bank must first receive the approval of a federal or state banking charter.

Before granting a charter, the chartering regulator must determine that the applicant bank has a reasonable chance for success and will operate in a safe and sound manner.

Then, the proposed bank must obtain approval for deposit insurance from the Federal Deposit Insurance Corporation. Additional approvals are required from the Federal Reserve if, at formation, a holding company would control the new bank or a state-chartered bank would become a member of the Federal Reserve.

A Sample Bank Business Plan Template

1. industry overview.

According to global banking industry reports, part of the broad financial services market, bank credit remain the leading market segment, with around 60% of the overall market in terms of value. Statistics has shown that the EU is the largest regional market, with over 57% of the global market.

Note that the economic recession that began in 2008 affected the industry and resulted in the crash of several financial institutions, which in turn led to the examination of practices and deployment of new guidelines in the banking industry.

But reports have it that the sector is beginning to rebound, and cross-border investment is one area contributing to recovery, with a few big banks dominating certain national markets. Advantages of cross-border practices include economies of scale, though institutions must compete with established domestic banks.

It’s very important to state that in the world retail banking and bank lending sectors, mortgage lending represents the leading market segment, accounting for almost 76% of the overall market in terms of value. Other key segments of the banking industry include private banking and payments business.

Note that in the US banking sector, experts believe that market growth will be driven by cross-border expansion due to the breaking down of obstacles to cross-border investment.

Competition between international banks is also expected to aid market growth along with the introduction of new products, reduction of costs and launching of new services. Report also has it that mobile and internet banking are becoming increasingly intertwined, especially due to the advent and success of smartphones. This provides consumers with convenient access to internet banking.

Have it in mind that the global mobile internet market will continue to drive the expansion of the mobile banking services sector. Report has shown that banking institutions are responding by launching downloadable applications and encouraging consumers to bank online and through mobile devices by rolling out mobile and internet banking services.

2. Executive Summary

Apex Investment Bank, LLC (AIB LLC) is a Portland Oregon based investment bank that will provide investment packages, underwriting, proprietary trading, and investment management for its investors. Our objective at AIB LLC is to create value for owners, employees, and investors through the establishment of an investment bank designed for the Third Generation.

This Generation is explicitly defined in the ground breaking research effort by Lincoln Swan & Co., Inc. and Netley Strategic business Group as a stage in the investment industry requiring a special set of skills for success. We at AIB LLC have leveraged this study, with more other studies, and perhaps most importantly, our own experience in the industry, to define a plan for the success of our clients.

Portland’s location is beneficial for several industries. Relatively low energy cost, accessible resources, north–south and east–west Interstates, international air terminals, large marine shipping facilities, and both west coast intercontinental railroads are all economic advantages.

AIB LLC will be structured as a Limited Liability Company with excellent plans to make use of industry research performed by one of our founding entrepreneurs, Solomon Drane during his professional career in investment management research.

Within the past three years, Solomon Drane has conducted research visits at the investment offices of over 80 companies. He has also held countless meetings with key investment professionals from around the globe either in person or via telephone conference.

We at AIB LLC plan to offer our clients the opportunity to assume minority ownership positions in exchange for contributions to our operating capital and for providing seed assets to establish the investment products described herein.

It is very important to state that this document alone does not create an offer of any type, nor does it give any guarantee, financial, or otherwise. This is a well detailed business plan designed to strategically dictate AIB LLC plans and visions for the next five years. It is open to correction or improvement within or after the specified time.

3. Our Products and Services

We at AIB LLC will provide investment packages and underwrite securities for sale to private investors and the general public among companies that are seeking to raise capital. At the onset of operations, we at AIB LLC will solely seek to sell debt instruments on behalf of our customers.

The standard fee for this service is 8% of the total underwritten instrument. We at AIB LLC will also solicit capital from accredited investors with the purpose of making use of this capital to make investment marketable securities. Our goal is to generate compounded annual returns of 30% to 35% per year on capital invested into our Bank’s portfolio holdings. We also plan to make sure that our management retains a 25% ownership interest at AIB LLC.

4. Our Mission and Vision Statement

  • Our vision at AIB LLC is to develop into a large scale investment bank that will provide underwriting income, advisory income, dividend income, capital appreciation, and interest income to investors.
  • Our mission at AIB LLC 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

We at AIB LLC understand that the strength of our management team and board of directors is perhaps the most important factor in starting a bank and effectively providing for its future success. We also found out through our detailed research that for a new bank charter to be approved for us, all our senior management team must be experienced bankers with a history of relevant success.

The more reason we made sure our board of directors are made up of individuals with successful careers in business, banking, and other fields, and have representation in the necessary disciplines.

We also understand the role of the board and management as investors 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.

We also understand that the typical investment bank is operated on a rigid, strict hierarchy, than most corporate or financial institutions. We have taken our time to analyse our market and what we need that is why we have decided to start with the listed workforce.

Managing director

  • Senior vice president

Vice president

Investment Banking Associate

Investment Banking Analyst

  • Marketing manager
  • Security man

5. Job Roles and Responsibilities

  • Broaden and/or enhance the bank’s industry coverage,
  • Will partner with the firm’s leadership to grow and build the bank
  • Will tirelessly work to deliver superior results to the firms’ clients
  • Participate as a key member of the senior leadership team, contributing to the strategy, growth and success of the firm
  • Lead efforts on sell-side and buy-side acquisition assignments, refinancing, recapitalization and restructuring assignments
  • Interact seamlessly with prospects, clients, acquirors, 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 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 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 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 analyzing 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.
  • Attends industry conferences and training sessions so as to present innovative ideas to clients
  • Responsible for providing leadership and overseeing the work of the subordinate members.
  • Call on prospective clients such as privately held business owners, publicly traded companies and private equity firms.
  • Conceptualize, organize and deliver new business presentations.
  • Lead transaction implementation across industry groups.
  • Manage, educate and develop banking analysts and associates.
  • Develop marketing and new business presentations.
  • Monitor financial analysis and modeling.
  • Perform and analyze industry research.
  • Create client presentations, proposals, engagement letters term sheets, legal agreements and offer memorandums.
  • 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.
  • 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 pitchbooks.
  • 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.

Sales and Marketing director

  • In charge of organizing external research and coordinating all the internal sources of information to retain the organizations’ best customers and attract new ones
  • 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
  • It’s the job of the director to supervise implementation, advocate for the customer’s needs, and communicate with clients
  • Keep all customer contact and information
  • Represents the company in strategic meetings
  • Aid to increase sales and growth for the business
  • Keep note and make sure the toiletries and supplies don’t run out of stock
  • Ensures that both the interior and exterior of the firm are always clean
  • Handles any other duty as assigned by the Vice president

Security guard

  • The security guard is in charge of protecting the firm and its environs
  • Also controls traffic and organize parking
  • He is 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

We at AIB LLC understand that the very first step of starting a new bank is to build a strong business and strategic plan. We believe that this plan must consider the proposed business of the new bank, its financial and managerial resources and prospects for success, the convenience and needs of the public, and the effect of competition.

This strong business and strategic plan supported by detailed financial projections and appropriate policies and procedures form the basis of successful regulatory applications of a bank charter.

We at AIB LLC hope to establish a lucrative investment bank that will serve the needs of our clients and also bring in profits for our founders. We took time to conduct a detailed SWOT analysis for AIB LLC. The details and results are explained below.

According to our SWOT analysis, our strength at AIB LLC 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 company profile even before bidding for investment banking contracts from corporate organizations.

As the investment 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 bank after completing the proper examinations and filings.

  • Opportunities

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

In time past, most financial firms 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 firm 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;

  • Market Risk – A high correlation 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.
  • Performance Risk – It is understood that 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.
  • Business/Operating Risk – Beyond the third full year of operation, 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.


  • Market Trend

Experts believe this industry will continue to experience growth in all parts of the world especially in developed countries such as united states of America, Canada, United Kingdom , Germany, Australia, South Korea, Japan, China et al.

According to industry data, the industry brings in a whooping sum of $105 billion annually with an annual growth rate projected at -13.0 percent within 2011 and 2016. Although the number of industry activities has not deviated dramatically over the five-year period, the share of revenue that each activity accounts for has undergone substantial volatility.

It is believed that the products and services in the Investment industry differ considerably on a company-by-company basis, largely depending on operator size.

It’s very important to state that small and medium size investment banks target niche industries and small companies and depend more heavily on traditional investment banking activities such as underwriting and financial advisory. Alternatively, major industry players earn a substantial share of revenue from trading activities.

Note that one factor that attract entrepreneurs to the investment banking business despite the huge capital requirements and the high risk is that the venture is profitable. We have made plans to always stay ahead of industry trend and also to get the required certifications and license and also meet the standard capitalization for an investment bank in the United States.

8. Our Target Market

Our target market at AIB LLC will be greatly dependent on the phase of our product in its development cycle. Have it in mind that most of the marketing opportunities 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.”

We at AIB LLC also believe that the high net worth and retail marketplace 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 businesses 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

Our Competitive Advantage at AIB LLC is specified in the three P’s commonly associated with investment firms: People, Process, and Performance. The first two determine the latter. Although 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 AIB LLC.

We believe that the very first is the people. Bright, energetic, talented, and knowledgeable individuals compose the core of the team we have at AIB LLC. We were able to note from our rigorous research that the most qualified investment professionals are attracted to efficient investment 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.


We at AIB LLC understand 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. After that, successful products should be aggressively marketed if capacity to manage additional assets exists.

Although a three to five-year period tend to seem like a century compared to the technology world, it is really quite reasonable considering 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.

AIB hallmark investment product will be the AIB 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.

Sources of Income

We believe that our primary income at AIB LLC will come from providing our clients with investment packages, securities underwriting and advisory services in regards to mergers and acquisitions. AIB LLC 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 for mergers and acquisition operations. 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

We at AIB LLC expect to turn over approximately 1/3 of our portfolio each year. We strongly believe that this is consistent with an average holding period of three years. Generally, we would love for all holdings to be long-term investments, so we will identify stocks we will be comfortable with if we were “locked in” for three years.

This forces 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.

11. Publicity and Advertising Strategy

We understand the importance of creating a good publicity plan that will boost our brand and help us stay consistent in the industry.

That is why we contacted Advertising Experts called Kinks Global, to help us create publicity and advertising strategies that will help us at AIB LLC to attract and keep our target audience interested. Listed below is the summary of strategies detailed by Kinks Global for our Bank.

  • Place adverts on both print (community based newspapers and magazines) and electronic media platforms; we will also advertise AIB LLC on financial magazines, real estate and other relevant financial programs on radio and TV
  • Introduce AIB LLC 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 Alexandria.
  • Advertise AIB LLC in important financial and business related magazines, newspapers, TV and radio stations.
  • Place AIB LLC on yellow pages ads (local directories)
  • Attend important international and local real estate, finance and business expos, seminars, and business fairs et al
  • 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 billboards at strategic locations
  • Share our fliers and handbills in target areas all around Portland

12. Our Pricing Strategy

Firms in this industry 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 investment banking is a very risky venture, it is still profitable, 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 AIB LLC plan to charge based on percentage and also a fix consultancy/business administrative fee. We believe that in the 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 diverse platforms 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 AIB LLC.

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

13. Startup Expenditure (Budget)

We have noted that banks are expected 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 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 banks are generally subject to additional criteria that remain in place until the bank’s operations become well established and profitable. We at AIB LLC 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 for developing local and other investors in the bank. We have analyzed our needs and we plan to spend our startup funds judiciously. Outlined below is a detailed financial projection and costing for starting AIB LLC;

  • 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 Portland Delta State (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 AIB LLC 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 AIB LLC.

  • Generating Startup Capital for AIB LLC

AIB LLC is a licensed and registered investment bank which is capitalized by five principal investors, Mr Solomon Drane, Mrs Agnes Church, Dr Mel Stanford, Mr Kelvin Cruff and Prof. John Thomas.

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, we have outlined the few ways we can acknowledge funding. These ways may include;

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

Note: AIB LLC has been able to generate an enormous $15 million from its five principal investors, who aligned and individually dished out $3,000,000 each. We have also aligned with angel investors to inject $20 million into AIB LLC, with the hope of making profits and establishing a solid business.

14. Sustainability and Expansion Strategy

Our primary goal of the first full quarter of operation (February- May 2019) is to secure funding from outside sources. Before that, our management team at AIB LLC has a budget of $300,000 to be used for finding investors, forming a legal LLC, and registering the bank and its products with the SEC.

The amount sought from investors will be approximately $20 million, which should see the business through to profitability near the completion of the third year. We at AIB LLC believe that this break-even point equates roughly to an asset under management level of approximately $130 million.

One can easily see that even modest points beyond this break-even level can be highly lucrative. It is also important to note that excess cash will be re-deployed into the business once a level of sustainability in revenue has been reached. Our primary purpose for this type of reinvestment would solely focus on a “second stage” marketing plan to increase distribution.

We also believe that a word of note is also warranted as it relates to the cash flow statement of our bank. Have it in mind that one appealing 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 note that common practice in the investment industry is to bill at each quarter-end. For instance, our annual fee of 1% would be applied to our clients’ accounts five times per year at 0.20%. We at AIB LLC can strongly attest to the fact that economic motivation is great.

Growth rates for the investment industry are projected to range from 25% to 24% in each of the next three years. We believe that 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 at AIB LLC believe that the certainty coupled with the above average growth rate differentiates this opportunity from other venture investments. Also have it in mind that our conservative 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 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 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 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 banks, financial lending institutions, vendors and key players in the industry: In Progress

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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?   


  • 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. 

Learn how U.S. Bank can support you and your business needs at usbank.com/small-business.

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How to balance a digital banking strategy with the banking branch

Distribution, not channel, is key to a digital and branch strategy..

US banks continue to reduce the number of branches as they address expense, but branch count doesn’t tell the whole story. Rather it is the sum of all products and interactions—ATMs, digital adoption, branch visits—that now establish the primary bank relationship.

For basic banking products, most new digital accounts today are savings or spending (credit or loan) as opposed to primary deposit accounts. And digital-only accounts tend to have lower balances or are single-purpose in nature. But as digital account opening and other functionality improves, it will bring a tipping point for digital to become a primary channel.

Success will ultimately involve finding the right balance between building deeper banking relationships with digital customers while persuading branch customers to take advantage of digital capabilities. However, there is no single strategy. Each institution, whether national or regional, will have different strengths to best manage overall customer distribution and servicing.

“In branch evaluation discussions, it will be increasingly critical to a) identify the purpose of the branch—whether it be experience, marketing, deposits, or complex advice, and b) identify proper KPIs for branch measurement. Should bank branches evolve into “marketing outposts” where sales then occur through digital channels? How will the branch be measured and how will marketing dollars be allocated?”

branch business plan

Download How to balance a digital strategy with the branch

We see three factors that determine how banks can evolve their branch strategy to balance with digital., 1. customer choice and convenience rather than digital versus physical.

In an environment with many different paths and unknowns for digital banking adoption, the best strategy might be to focus on convenience. An easier path to achieve customer satisfaction is by providing immediate assistance or the ability to open any type of account through a mobile device or a branch visit (or both), rather than trying to determine the right channel strategy for each.

2. Workplace barriers need to be addressed at the outset.

Traditional compensation and branch operational targets may prove to be the biggest hurdles banks face when planning an omnichannel strategy. For example, avoiding the conflict that could arise between digital sales targets and the branch employees who are still focused on in-branch product sales.

3. Demographic shifts require multiple tiers of branch design.

Widening demographic shifts such as population, job and income growth have had a far larger impact on deposit growth than technology or branch investment. With roughly half of all US deposits coming from the top 25 markets, the ability to tier branch design to various demographics and geographic regions will prove critical in developing the role and profitability of a branch in a bank’s ecosystem.

Program design structures to support omnichannel relationships

Specific data factors for branch performance, customizing branch strategies to specific markets, the bottom line on digital banking and the branch.

The future of the branch is not just about real estate. In an ever-changing world — where consumer propensity for digital and omnichannel tendencies fluctuate on an individual and demographic level — the best strategy will be relationship-driven. This may involve new top-of-funnel customer acquisition strategies, deposit-tiering (based on strength) and new methods of “trial” conversion. But these steps could ultimately result in deeper relationships, lower attrition and better performance.

Rahul Wadhawan

Principal, Strategy&, PwC US

Dean Nicolacakis

Principal, PwC US

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© 2017 - 2024 PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details.

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Six Battle-Tested Strategies to Establishing a Branch Office

PSMJ Resources, Inc.

In most cases they walk, ill-equipped, into battle against something new and unexpected, like a two-headed blood thirsty battle cat that hurls spears at your armor while whisking your legs out from under them with its lethal tail. Some adapt and conquer the beast while others are cut off at the knees and impaled in the throat.

Expanding your business, into more locations, is much like stepping into battle with an adversary that you are not prepared to defeat. There are A/E firms that have conquered these beasts. Every experience is unique, challenging, and rewarding. Here are six strategies learned along the way that have helped firms like yours be successful and grow in new locations :

Be true to your Core Values, Vision, and Strategic Plan.  Assuming your opportunity and location is recognized, you must question your motives. For us this was a regular conversation. Revisit your values and mission, and make sure the new office is staying in line with the company culture and goals.

Expect battle wounds while establishing a new location.  Battle wounds may come in the form of big costs, unexpected  costs,and lost projects. We dodged and took several unexpected  lashings while we established and grew our business. Keep your  eyes open, press forward, and remember, from your current  business experience, you can take a punch.

Know your battle plan and teammates.  Progress and success will  hinge on a well-executed revenue forecast and business development plan…without sacrificing profits! Inasmuch, your current financial and  organizational business needs to be well organized and capitalized.  Find a new financial teammate if your current group or institution is unwilling to grow with you.

Be different. Define success and growth on your own terms. You are successful, so act like it. You are good at what you do, so keep doing it. Who cares what your competition is doing!

Choose your weapon wisely . The person, or Champion, you identify for leading this new location may be one of the most important decisions you make. Our company invested quite a bit of time into this decision. Please don’t mess this up.

Appeal to everyone in the firm for this new endeavor. Tell your friends and close clients. Create positive commotion and chanting in the arena. This noise is a huge motivator and creates momentum for your Champion and the principals of the firm. This is an endeavor of the entire firm, not merely the leading individual.

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Other Branch Office related blog posts:

Data Dive: Best Practices in Branch Office Management

Letter from the Field: Growing a Branch Office

Might as Well Jump: Tips for Branch Office Success

Three Pieces of Advice for Evaluating Branch Office Success

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Increasing Efficiencies

How to improve bank branch performance & streamline branch operations processes.

Streamline your branch operations

The last two years have called for undeniable change in the financial industry. They’ve called for forced branch closures, highlighted the importance of contact centers, and accelerated adoption of digital channels. They’ve shined a spotlight on the need for banks and credit unions to have technology in place that will improve branch performance so they can offer the service their accountholders deserve.

By improving branch performance, you can be there for your accountholders where they need you to be – whether that’s at the branch, on the phone, or through a digital channel. After all, branch support doesn’t stop at the branch doors.

To streamline your branch operations and enhance accountholder service through the speed, accuracy, and convenience that comes with automation, start by:

  • Improving staff mobility and accountholder convenience.
  • Empowering contact center agents to provide high quality service.
  • Optimizing your core and complementary solutions to enhance accountholder service, convenience, and loyalty.

Improve Staff Mobility & Accountholder Convenience

“In an industry built on having human connection at branches, the coronavirus pandemic has and will continue to change the way [people] interact with their bank or credit union,” said Connie Hancock, Technical Product Manager at Jack Henry SM . By offering branch employees a modern mobile application that has seamless integrations to multiple back-end systems, they’ll be able to offer the technology, speed, and convenience accountholders have become accustomed to in their everyday lives – during and even before the pandemic.

What if you or your employees could walk up to a branch visitor and help them open an account using a tablet? Or meet them down the street to discuss a home or business loan? (With a connection to your core system in hand.) How much easier would it be for your employees? How much more convenient would it be for your customers and members?

When your employees can support sales and operational processes from anywhere with real-time accountholder information at their fingertips in the branch or remotely, these digitally empowered employees can respond to requests in a more personable way – taking the conversation to the branch lobby, to a coffee shop, or over a Zoom call. “Having the ability to engage with the [accountholder] from anywhere inside or outside the branch and build those relationships makes doing business more efficient and appealing.”

How to improve bank branch performance using this? Look for a solution that improves the mobility of your staff, allowing for personal service at the moment of need.

Empower Contact Center Agents to Provide High Quality Service

As its adoption and usage continues to grow in popularity, digital bankin g has become the new lobby. Banks and credit unions are fast-tracking transformation efforts and increasing investments in digital experience enhancements with a strong focus on service and engagement – looking for the optimal balance between self-service automation and high-touch personal service when and where the accountholder needs it. And where they need it is everywhere: a consumer expectations survey published found that when it comes to user engagement, 82% of consumers reach out by phone (making it crucial for banks and credit unions to offer live phone support even outside of regular business hours), 62% contact via email, and 43% use live chat.

As the role of traditional banks and credit unions continue to evolve, improving digital agility and maintaining your ability to create authentic connections will require improved integration of contact center and branch channels with a holistic digital-first strategy. That’s why you’ll see traditional call centers evolving into true contact centers – with banks and credit unions upskilling their agents and empowering them with the tools they need (quick and easy access to information, single logins, and authentication – to name a few) to improve the service they deliver.

How to improve bank branch performance using this? Be proactive when it comes to accountholder engagement by implement ing solutions with deep digital capabilities, covering channels like phone support, online and mobile, and live chat.

Optimize Your Technology Platform to Enhance Accountholder Service, Convenience & Loyalty

Your core platform is the heart of your service, innovation, efficiency, and future. And when paired with automated, accountholder- and employee-friendly complementary solutions like payments and lending, it stands to be the difference between accountholders who leave and ones who stay for life. Because at the end of the day, when branches offer automated solutions for repetitive processes, there’s more time for financial counseling, relationship development, and learning about real accountholder needs.

All systems require some type of regular investment, and this is particularly true for your core. Whether you’re on a cloud-based platform or in-house, it’s important to stay up to date. Things are changing at a hurried pace in the industry and it’s paramount that you stay at the forefront. To maximize your most significant investment, regularly review it, keep it clean, keep it in the know, and keep it up to date.

How to improve bank branch performance using this? Make sure your core processes are functioning at their optimum levels to best support your accountholders and your employees. Consider partnering with a consulting service that knows your core and can help you increase its efficiency, implement automation, and assist with planning, design, or re-engineering of your banking processes.

Why Streamlining Branch Operations Processes Is Key

When it comes to streamlining branch operations and improving branch performance, the right technology in the hands of your branch employees can provide more than automated workflows and processes. Without multiple logins, lengthy information searches, or being confined to a desk, tellers and advisors can offer faster service – creating a more satisfying experience for everyone involved.

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Mortgage Broker Business Plan Template

Written by Dave Lavinsky

mortgage broker business plan

Over the past 20+ years, we have helped thousands of mortgage brokers start and grow their businesses. On this page, we will first give you some background information with regards to the importance of business planning. We will then go through a mortgage brokerage company business plan step-by-step so you can create your plan today.

Download our Ultimate Business Plan Template here >

What Is a Business Plan?

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

Why You Need a Business Plan

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

Finish Your Business Plan Today!

How to write a business plan for a mortgage company.

If you want to start a mortgage business or expand your current one, you need a business plan. Below are links to each section of your mortgage business plan template:

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 type of mortgage broker business you are operating and the status. For example, are you a startup, do you have a mortgage broker business that you would like to grow, or are you operating mortgage broker businesses in multiple markets?

Next, provide an overview of each of the subsequent sections of your plan. For example, give a brief overview of the mortgage industry. Discuss the type of mortgage broker business you are operating. Detail your direct competitors. Give an overview of your target market. Provide a snapshot of your marketing and sales strategy. Identify the key members of your team. And offer an overview of your financial plan.  

Company Analysis

In your company analysis, you will detail the type of mortgage broker business you are operating.

For example, you might operate one of the following types of mortgage broker businesses:

  • Retail Mortgage Broker : this type of mortgage broker business focuses on being a broker for individuals or small businesses.
  • Business/Corporate Mortgage Broker: this type of mortgage broker interacts with and provides services for mid-size businesses and corporate entities.
  • Private Mortgage Brokers: this type of mortgage broker’s clients are wealthy individuals and families with high net-worth levels.

In addition to explaining the type of mortgage broker business you will operate, the Company Analysis section of your business plan needs to provide background on the business.

Include answers to question such as:

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

Industry Analysis

In your industry analysis, you need to provide an overview of the mortgage industry.

While this may seem unnecessary, it serves multiple purposes.

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

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

The third reason for market research 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 mortgage business plan:

  • How big is the mortgage 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 market for your mortgage business? 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 mortgage broker business plan must detail the customers you serve and/or expect to serve.

The following are examples of customer segments : prospective home buyers, families, couples and small businesses.

As you can imagine, the customer segment(s) you choose will have a great impact on the type of mortgage brokerage you operate. Clearly, a single individual would respond to different marketing promotions than a large corporation, for example.

Try to break out your target market 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 understand and define these needs, the better you will do in attracting and retaining your customers.

Finish Your Mortgage Broker Business Plan in 1 Day!

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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 mortgage broker businesses. 

Indirect competitors are other options that customers have to purchase from that aren’t direct competitors. This includes real estate firms, loan officers, and bankers. You need to mention such competition as well.

mortgage brokerage competitive analysis matrix

  • What types of customers do they serve?
  • What type of mortgage brokerage 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 lower interest rates?
  • Will you provide services that your competitors don’t offer?
  • 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

mortgage broker marketing plan diagram

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

Place : Place refers to the location of your mortgage company. Document your location and mention how the location will impact your success. For example, is your mortgage brokerage located in a busy retail district, a business district, a standalone office, etc. Discuss how your location might be the ideal location for your customers.

Promotions : The final part of your mortgage broker marketing plan is the promotions section. Here you will document how you will drive customers to your location(s). The following are some promotional methods you might consider:

  • Advertising in local papers and magazines
  • Reaching out to websites 
  • Social media marketing
  • Local radio and television advertising
  • Other digital marketing efforts such as paid advertising and search engine optimization for you business website

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 mortgage brokerage, including marketing your services, reviewing credit history of clients, shopping amongst mortgage lenders, and gathering and completing all necessary documents to submit and have a loan approved. 

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

Management Team

To demonstrate your mortgage brokerage’s ability 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 mortgage broker businesses. 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 like mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in managing loan services or successfully running their own mortgage brokerage company .  

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.

mortgage brokerage sales growth

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 mortgage broker business, 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 bank 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 make sure 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. 

In developing your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a mortgage broker business:

  • Advertising and marketing
  • Cost of equipment and supplies
  • Payroll or salaries paid to staff
  • Business insurance
  • Taxes and permits
  • Legal expenses

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 office location lease or fees paid to support clients in finding the right mortgage loan.  

Putting together a business plan for your mortgage broker business is a worthwhile endeavor. If you follow the template above, by the time you are done, you will truly be an expert. You will really understand the mortgage industry, your competition, and your customers. You will have developed a marketing plan and will really understand what it takes to launch and grow a successful mortgage broker business.  

Mortgage Broker Business Plan FAQs

What is the easiest way to complete my mortgage broker business plan.

Growthink's Ultimate Business Plan Template allows you to quickly and easily complete your Mortgage Broker Business Plan.

What is the Goal of a Business Plan's Executive Summary?

The goal of your Executive Summary is to quickly engage the reader. Explain to them the type of mortgage broker business you are operating and the status; for example, are you a startup, do you have a mortgage broker business that you would like to grow, or are you operating a chain of mortgage broker businesses?

Don’t you wish there was a faster, easier way to finish your Mortgage Broker 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 Growthink’s professional business plan consulting services can create your business plan for you.

Other Helpful Business Plan Articles & Templates

Business Plan Template & Guide For Small Businesses

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Insurance Business Plan Template

Written by Dave Lavinsky

Business Plan Outline

  • Insurance Business Plan Home
  • 1. Executive Summary
  • 2. Company Overview
  • 3. Industry Analysis
  • 4. Customer Analysis
  • 5. Competitive Analysis
  • 6. Marketing Plan
  • 7. Operations Plan
  • 8. Management Team
  • 9. Financial Plan

Insurance Agency Business Plan

You’ve come to the right place to create your own business plan.

We have helped over 100,000 entrepreneurs and business owners create business plans and many have used them to start or grow their insurance companies.

Essential Components of a Business Plan For an Insurance Agency

Below we describe what should be included in each section of a business plan for a successful insurance agency and links to a sample of each section:

  • Executive Summary – In the Executive Summary, you will provide a high-level overview of your business plan. It should include your agency’s mission statement, as well as information on the products or services you offer, your target market, and your insurance agency’s goals and objectives.
  • Company Overview – This section provides an in-depth company description, including information on your insurance agency’s history, ownership structure, and management team.
  • Industry Analysis – Also called the Market Analysis, in this section, you will provide an overview of the industry in which your insurance agency will operate. You will discuss trends affecting the insurance industry, as well as your target market’s needs and buying habits.
  • Customer Analysis – In this section, you will describe your target market and explain how you intend to reach them. You will also provide information on your customers’ needs and buying habits.
  • Competitive Analysis – This section will provide an overview of your competition, including their strengths and weaknesses. It will also discuss your competitive advantage and how you intend to differentiate your insurance agency from the competition.
  • Marketing Plan – In this section, you will detail your marketing strategy, including your advertising and promotion plans. You will also discuss your pricing strategy and how you intend to position your insurance agency in the market.
  • Operations Plan – This section will provide an overview of your agency’s operations, including your office location, hours of operation, and staff. You will also discuss your business processes and procedures.
  • Management Team – In this section, you will provide information on your insurance agency’s management team, including their experience and qualifications.
  • Financial Plan – This section will detail your insurance agency’s financial statements, including your profit and loss statement, balance sheet, and cash flow statement. It will also include information on your funding requirements and how you intend to use the funds.

Next Section: Executive Summary >

Insurance Agency Business Plan FAQs

What is an insurance agency business plan.

An insurance agency business plan is a plan to start and/or grow your insurance business. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections.

You can  easily complete your insurance agency business plan using our Insurance Agency Business Plan Template here .

What Are the Main Types of Insurance Companies?

There are a few types of insurance agencies. Most companies provide life and health insurance for individuals and/or households. There are also agencies that specialize strictly in auto and home insurance. Other agencies focus strictly on businesses and provide a variety of liability insurance products to protect their operations. 

What Are the Main Sources of Revenue and Expenses for an Insurance Agency Business?

The primary source of revenue for insurance agencies are the fees and commissions paid by the client for the insurance products they choose.

The key expenses for an insurance agency business are the cost of purchasing the insurance, licensing, permitting, and payroll for the office staff. Other expenses are the overhead expenses for the business office, utilities, website maintenance, and any marketing or advertising fees. 

How Do You Get Funding for Your Insurance Agency Business Plan?

Insurance agency businesses are most likely to receive funding from banks. Typically you will find a local bank and present your business plan to them. Other options for funding are outside investors, angel investors, and crowdfunding sources. This is true for a business plan for insurance agent or an insurance company business plan.

What are the Steps To Start an Insurance Business?

Starting an insurance business can be an exciting endeavor. Having a clear roadmap of the steps to start a business will help you stay focused on your goals and get started faster.

1. Develop An Insurance Business Plan - The first step in starting a business is to create a detailed insurance business plan that outlines all aspects of the venture. This should include potential market size and target customers, the services or products you will offer, pricing strategies and a detailed financial forecast.  

2. Choose Your Legal Structure - It's important to select an appropriate legal entity for your insurance business. This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your insurance business is in compliance with local laws.

3. Register Your Insurance Business - Once you have chosen a legal structure, the next step is to register your insurance business with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws. 

4. Identify Financing Options - It’s likely that you’ll need some capital to start your insurance business, so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms. 

5. Choose a Location - Whether you plan on operating out of a physical location or not, you should always have an idea of where you’ll be based should it become necessary in the future as well as what kind of space would be suitable for your operations. 

6. Hire Employees - There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events. 

7. Acquire Necessary Insurance Equipment & Supplies - In order to start your insurance business, you'll need to purchase all of the necessary equipment and supplies to run a successful operation. 

8. Market & Promote Your Business - Once you have all the necessary pieces in place, it’s time to start promoting and marketing your insurance business. This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective Search Engine Optimization (SEO) strategy. You should also consider traditional marketing techniques such as radio or print advertising. 

Learn more about how to start a successful insurance business:

  • How to Start an Insurance Business

Where Can I Get an Insurance Business Plan PDF?

You can download our free insurance business plan template PDF here . This is a sample insurance business plan template you can use in PDF format.

I'm a financial planner — I have 4 tips for my business owner clients looking to open a business bank account

Our experts choose the best products and services to help make smart decisions with your money ( here's how ). In some cases, we receive a commission from our partners ; however, our opinions are our own. Terms apply to offers listed on this page.

  • Legally protecting yourself in case of an audit is the No. 1 reason to use a business bank account.
  • Different banks will offer different levels of convenience, and they'll come with different fees.
  • Fraud detection and other security features are especially important for protecting your business.

Insider Today

When starting a business, it can be overwhelming thinking about all the things you need to do and consider. However, it is essential that you do not overlook the value of opening a business bank account — usually both a business checking account and a high-yield business savings account .

As a CPA and financial planner, one of the first things I tell all my business owner clients to do is to keep their personal and business transactions separate. While there are a multitude of reasons you should have a separate bank account for your business, legal protection is certainly the most important.

If you experience an audit, it is important to have an easy way to track your business expenses and income. When business finances are commingled with personal finances, it becomes nearly impossible to provide a clear financial trail.

When choosing a business bank account, there are several important factors to consider. Here are four things I tell my business owner clients to consider when choosing a business bank account.

1. Access to banking services and customer service

When it comes to running a business, a variety of banking services can help you effectively manage your business finances. Beyond just opening a business bank account, you want to ensure that the financial institution you choose can provide access to services such as a checking account, savings account, business loans , wire transfers, fraud prevention services, a notary, checkbooks, business credit cards , online and mobile banking, and bill payment services.

If you want more one-on-one attention from a banker, consider opening an account with your local bank or credit union. You may also prefer a physical branch if you plan to make daily deposits or withdrawals of cash or checks.

This may be more challenging to do with an online bank. Many online banks may offer deposits and withdrawals, but their ATM network may not be as large as a well-known brick-and-mortar bank. For this reason, some small business owners open an account at their local bank where they have their personal accounts and know the level of customer service they will receive.

Consider opening your business checking and savings accounts at different financial institutions so that you can have access to both better banking services at a physical branch and higher interest rates at an online bank.

2. Terms and fees (including minimum balance)

The fees associated with business bank accounts can vary widely depending on the financial institution. Some of the most common fees to be aware of include monthly maintenance fees, overdraft fees , wire transfer fees, minimum balance fees, and ATM fees.

You may find that online banks charge fewer fees than brick-and-mortar banks, but you must consider this in conjunction with the other features.

Seek an account with reasonable fees that can accommodate your business.

3. Ease of paying contractors

Some business bank accounts, especially online accounts, offer free invoicing and bookkeeping software/features.

If you use accounting software (such as QuickBooks) to manage your business finances, accessing a business bank account that offers integration features may be desirable. Trust me, this will make your or your accountant's life much easier.

In addition, some accounts allow integrations with payroll and tax preparation software. This will help to make the process of paying contractors with 1099s more seamless.

4. The bank's security offerings

One of the most important things you should consider when choosing a business bank account is security. There are certain features that you want to look for to make sure your account is protected.

First, you want to make sure that the bank you choose is FDIC-insured (or NCUA-insured if a credit union). In addition, you want to make sure that the institution has additional layers of security such as multi-factor authentication and fraud detection services, which include account monitoring and alerts for suspicious activity.

Ensure that whatever bank you choose offers the best security features to protect your business from fraud.

When choosing a bank account, consider all the various banking features offered by different financial institutions to find the one that best suits your business's financial needs. Also, remember that your decision is not permanent. It is easy to switch banks if necessary.

Watch: The 3 most important things you need to know about starting a business

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Practical and real-world advice on how to run your business — from managing employees to keeping the books.

Our best expert advice on how to grow your business — from attracting new customers to keeping existing customers happy and having the capital to do it.

Entrepreneurs and industry leaders share their best advice on how to take your company to the next level.

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Start » strategy, 9 steps to creating a procurement process for your small business.

An effective procurement strategy is the foundation for implementation success. Learn how to plan your approach, choose the right technologies, and find suitable suppliers.

 A small business owner checks a delivery. Before her is an open box. She is holding the shipping invoice in her right hand and comparing it against the goods delivered.

Disruptions, shortages, and out-of-stock situations impact your uptime and ability to meet customer expectations. Indeed, in the second quarter of 2023, supply chain issues remained a top concern for 23% of small business owners, according to the MetLife and U.S. Chamber Small Business Index . A procurement strategy increases supply chain visibility and resiliency while reducing your financial and operational risks.

In addition, a purposeful approach to procurement can save your company money and bolster relationships with suppliers. Follow this step-by-step guide to develop a procurement process suitable for your business goals and needs.

1. Assess your needs, goals, and budget

Procurement cycles differ by company; small and medium businesses (SMBs) should refrain from trying to create a one-size-fits-all plan. Instead, complete an internal review to learn what goods and services each department requires. Categorize these as direct (raw materials or services for production) or indirect (supports business activities). Then, break them into goods or services. Remember to include pricing and quantities to understand the spend for each group.

This step aims to see how much your business spends on direct and indirect goods and services. These figures will give you an idea of how procurement can benefit your company and how a strategy can help you overcome supply chain challenges .

[ Read more: 6 Ways to Protect Your Business From a Supply Chain Disruption ]

2. Establish metrics to measure your procurement performance

Procurement key performance indicators (KPIs) track your company’s efficiency and process goals. Monitoring metrics increases visibility into your supply chain and shows where you’re improving or need further action. You should set small business KPIs before beginning any new process.

Consider tracking the following metrics:

  • Rate of emergency purchases.
  • Procurement return on investment (ROI) and benefits.
  • Supplier defect rate.
  • Purchase order (PO) and invoice accuracy.
  • Compliance rate.
  • Supplier lead time.
  • Vendor availability.
  • PO cycle time.
  • Cost per invoice and PO.
  • Procurement ROI and benefits.
  • Spend under management.
  • Price competitiveness.

[ Read more: Big Brands’ Inventory Management Partners Share Top Tips to Slay Supply Chain Snarls ]

3. Consider current and new procurement technologies

Capterra stated, “Nearly 30% of SMBs plan to implement a new supply chain management tool in 2023.” Moreover, MHI predicts that “digital supply chains will be the norm” by 2033.

Although companies can choose an all-in-one procure-to-pay suite, Capterra found that many organizations opt for specialized tools. Niche programs are easier to use, integrate, and deploy.

See if your current software supports your procurement process, and while planning your strategy, look for opportunities to automate tasks using supply chain tech . Doing so can decrease errors and save time, allowing your procurement team to focus on high-value activities instead of data entry.

Procurement software solutions fall into the following categories (and several tools cover multiple areas):

  • Accounts payable and spend analysis: This software helps companies understand the procurement process and find cost-saving opportunities. Solutions include Coupa , SAP Ariba , Precoro , and PRM360 .
  • Procure to pay: These end-to-end platforms centralize many procurement activities. Consider solutions like mjPRO , Procurify , Precoro , Basware , and MHC Software .
  • Purchasing: Automate your approval workflows and view real-time spend data with SAP S/4HANA Cloud , Emburse Certify Expense , Spendwise , Veeqo , Unleashed , Planergy , Teampay , and Order.co .
  • Request for proposal (RFP): Create a central database for your procurement documents and use artificial intelligence (AI) tools to improve your workflows. Software solutions include Responsive (formerly RFPIO), Loopio , Avnio Response Cloud , RFP360 , QorusDocs , and RocketDocs .
  • Spend management: Manage your expenses automatically and visualize your costs with software like BILL Spend & Expense (Formerly Divvy), Ramp , Brex , Airbase , and Spendesk .
  • Strategic sourcing: Automate your sourcing and procurement process with software such as aPriori , Procol , and Anvyl .
  • Vendor management: Review, track, and manage suppliers with solutions from QuickBooks Online , Vanta , SAP Fieldglass , Venminder , Ncontracts , and Tradeshift Pay .

4. Find and evaluate suppliers

Identify vendors for each good, electronic component, service, raw material, or service your business requires. Obtain supply market intelligence using free resources from the U.S. Small Business Association and the U.S. Census Bureau . Also, consider paid services, such as IBIS World , Crain’s , Bloomberg , and Gartner . Consider each vendor’s cost structure, market information, past performance, and commodity profile.

This prescreening process is enough to move to the next stage for some services and goods (office supplies or standard maintenance items like grease). However, you should further evaluate complex parts and essential production components when the products substantially impact your budget and production capacity. The more risk that’s involved, the more time you should dedicate to the vetting process.

Consider criteria such as the following:

  • Location: Review the geographic stability, distance from your company, and supply chain infrastructure.
  • Cultural and language differences: Determine if barriers will cause communication issues during the process.
  • Working conditions: Focus on health and safety practices, child labor usage, and general working conditions.
  • Employee capabilities: See if there is a history of labor disputes or strikes, the turnover rate, and the workforce skill level.
  • Cost structure: Go over the total costs, including production, marketing, material, administrative, and supply chain expenses.
  • Technological capabilities: Consider the company’s approach to technology in design, equipment, processes, methods, and any current or future investments in research and development.
  • Quality control: Look at what system they use and record to ensure consistency for current and anticipated demand.

In the second quarter of 2023, supply chain issues remained a top concern for 23% of small business owners, according to the MetLife and U.S. Chamber Small Business Index.

5. Choose a sourcing strategy

After approving a purchase, your procurement team must select a supplier and either buy directly from them, send an RFP or a request for quote (RFQ), or enter into an agreement.

An RFP solicits bids from suppliers. It should outline your project and provide delivery requirements, financial terms, pricing structure, and product or service details. Alternatively, a company uses an RFQ when they only need a price quote, not information about products or services.

[ Read more: Do You Have a Supply Chain Backup Plan? How to Plan Ahead ]

6. Select suppliers and negotiate

Once you review the documents and choose a supplier, it’s time to negotiate vendor contracts . The agreement should outline the scope of work, delivery dates, budget, contract duration, legalities, terms, and conditions.

It’s important to remember that, ideally, you’re building a long-term relationship. You need to get the best deal possible. At the same time, compromise is part of negotiation.

7. Finalize documents and keep records

The onboarding process begins immediately after signing and approving the contract. Larger organizations often require individuals to complete a purchase requisition (PR). This form requests the procured goods or services and requires approval from an internal department manager or leader.

From there, the business creates a purchase order (PO). This document goes to the supplier and details the services or goods and negotiated terms and conditions.

Small businesses should keep all records on file, whether those records are paper files or digital forms. Doing so helps show your overall ROI and can support you when negotiating future vendor payment terms . Moreover, it’s essential for business tax and audit purposes.

Store the following documents:

  • Supplier invoices.
  • Delivery reports.
  • Company policies.
  • Purchase orders.
  • Packing lists.
  • RFPs and RFQs.
  • Procurement budget approvals.
  • Goods received note.

8. Inspect shipments and pay suppliers

Check out your first shipment to ensure everything is in good condition and in the correct quantity. Also, note if the supplier met the delivery schedule and satisfied the services outlined in the contract. If you have any concerns, contact the vendor for a meeting. Otherwise, you can go over the invoice for payment.

Companies often use the three-way matching method. It compares the purchase order, invoice, and itemized list for accuracy. From there (depending on your payment terms), your financial department will process the payment and send it to the supplier.

9. Review and adjust your procurement strategy

All business strategies are living documents. Nothing, including contracts, is set in stone.

Your procurement KPIs will highlight opportunities for improvement and areas where you could save money by adjusting your process or negotiating better contract terms. Likewise, you may realize inefficient processes are driving up administrative costs. In this case, automated spend management software or vendor management tools can boost productivity while reducing errors and ensuring policy compliance.

CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.

CO—is committed to helping you start, run and grow your small business. Learn more about the benefits of small business membership in the U.S. Chamber of Commerce, here .

Next Event: Tax Filing Tips!

Join us on Thursday, February 22, at 12 pm ET for the first episode of our expert series, Ready. Set. Scale.: Smart Tax Tips for a Stress-Free Filing. We will have seasoned leaders offering actionable tips to help minimize the stressors of tax time for small businesses.

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