business plan for private banking

Sample Private Banking Business Plan

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

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

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

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

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

What Are Your Motivations?

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

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

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

Identifying a Gap in the Market

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

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

Private Banking Business Plan Guide

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

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

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

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

Requirements For Starting A Private Bank

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

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

Minimum of Two Partners

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

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

Senior Directive Staff

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

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

Appoint Compliance and Risk Management Officers

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

Local Office Setup

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

Experienced Directive Staff

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

Having an MBA or similar qualifications will be in order.

Audit of All Directors and Shareholders

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

Your Application Must be Submitted with a Business Plan

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

Initial Paid-Up Capital Requirement

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

Extensive Experience Among Staff a Certain Cadre

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

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

Reporting Back-end Banking Software Operation

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

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

Raising Capital

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

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

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

Obtaining a Bank Charter

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

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

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

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

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

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How to Start Your Own Private Bank?

• BY GlobalBanks Team
• Updated Jul 10, 2023

In this article, we’re going to discuss how to start your own private bank, including why you may and may not want to consider this option.

We’ll also break down the key requirements that you’ll need to meet to even consider starting your own private bank and a few jurisdictions you might want to explore.

This article is part of our free series on banking in the best jurisdictions available, including a detailed step-by-step guide to opening a private bank account for yourself.

Feel free to use the table of contents to jump ahead to the sections most relevant to you.

Table of Contents

Benefits of Having a Private Bank License?

Capital requirements when starting a small private bank, frequently asked questions, do you want help opening bank accounts.

To start your own private bank you will need to apply and be approved for a private banking license. That said, banking regulations and banking license requirements vary between jurisdictions, so it’s important to select a jurisdiction that matches your resources and desired banking model.

In general, the minimum requirements to apply for a banking license include a detailed business plan, risk management and compliance plan, corporate governance documents, capital requirements, and an overview of all banking operations.

That said, banking regulators also want a clear picture of the financial services that you plan to offer, your plans for client acquisition, and future capitalization plans.

Of course, depending on what you mean by “private banking” the requirements listed above and the services that you can offer will vary.

In fact, in most jurisdictions private banking licenses are categorized as Class B banking licenses, which typically cater to a closed group of individuals or international clients.

For these reasons, it’s important to note that there is a difference between “private banking” in the traditional sense, which is commonly associated with wealth management and registering a private financial institution in an offshore jurisdiction.

The perceived benefits of having a private bank license include autonomy, control, and the ability to manage your finances in a way that matches your personal preferences. While this may be true for certain individuals, it isn’t always the case.

In fact, if you’re like most people and decide to register a bank in an offshore jurisdiction where banks struggle to maintain correspondent accounts, you will be worse off than when you started. This is because, after investing time, money, and energy into the process of registering your bank, you won’t be able to use the bank unless you can obtain a correspondent account.

But, correspondent banks are extremely careful with the financial institutions that they onboard as clients. As a result, it can take months or even years to open a correspondent bank account.

In certain cases, and in certain jurisdictions, your bank may never get a correspondent account opened at all. This is the unfortunate reality for many entrepreneurs that decide they want to open a private bank.

The specific requirements to start a private bank will largely depend on the jurisdiction that you choose for registration. On the low end of the spectrum, the capital requirements can range between USD 300,000 to USD 5,000,000. This range reflects the registration of a private bank in a small offshore banking hub. More established banking jurisdictions have considerably higher capital reserve requirements.

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Below are a few of the most common questions we receive from people looking into how to start your own private bank. If you have further questions you would like to ask our team, don’t hesitate to get in touch.

Can You Make Your Own Private Bank?

Yes, you can make your own private bank. However, you should consider the pros and cons of doing so before investing time and energy into the process. In most cases, setting up a private bank is complicated, costly, and bureaucratic, and has unforeseen challenges that can make it not worth pursuing.

How Much Does It Cost to Start a Private Bank?

The cost to start a private bank ranges between a few hundred thousand dollars and tens of millions, depending on the jurisdiction you choose to register in and the fees associated with applying. Of course, the costs also need to include the initial capital injection, which will be necessary to meet the regulatory requirements.

Do Private Banks Create Money?

No, private banks do not create money. However, when managed efficiently they can earn revenue and generate profit for its shareholders. Likewise, private banks tend to offer high interest rate products and lucrative investments to their customers.

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The GlobalBanks editorial team comprises a group of subject-matter experts from across the banking world, including former bankers, analysts, investors, and entrepreneurs. All have in-depth knowledge and experience in various aspects of international banking. In particular, they have expertise in banking for foreigners, non-residents, and both foreign and offshore companies.

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

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

Four important reasons to write a business plan:

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

Business plan guide: How to get started

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

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

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

Business plan: An outline

Use this exercise to gather important information about your business.

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

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

Objectives 

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

Startup capital 

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

Monthly expenses

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

Monthly income 

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

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

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Disclosures.

Loan approval is subject to credit approval and program guidelines. Not all loan programs are available in all states for all loan amounts. Interest rates and program terms are subject to change without notice. Mortgage, home equity and credit products are offered by U.S. Bank National Association. Deposit products are offered by U.S. Bank National Association. Member FDIC.

Bank Business Plan Template

Written by Dave Lavinsky

Bank Business Plan

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

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

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

Download our Ultimate Business Plan Template here >

What Is a Bank Business Plan?

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

Why You Need a Business Plan for Your Bank Business

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

Sources of Funding for Banks

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

Finish Your Business Plan Today!

How to write a business plan for a bank.

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

Executive Summary

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

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

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

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

Company Overview

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

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

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

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

Include answers to questions such as:

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

Industry Analysis

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

While this may seem unnecessary, it serves multiple purposes.

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

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

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

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

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

Customer Analysis

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

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

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

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

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

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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 banks.

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

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

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

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

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

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

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

Marketing Plan

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

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

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

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

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

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

Operations Plan

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

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

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

Management Team

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

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

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

Financial Plan

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

Income Statement

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

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

Balance Sheets

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

Cash Flow Statement

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

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

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

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

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

Bank Business Plan Template FAQs

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

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

How Do You Start a Bank Business?

Starting a bank business is easy with these 14 steps:

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

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

OR, Let Us Develop Your Plan For You

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

Other Helpful Business Plan Articles & Templates

How To Write a Business Plan for Bank in 9 Steps: Checklist

By henry sheykin, resources on bank.

• Financial Model
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• One-Page Business Plan
• SWOT Analysis
• Business Model
• Marketing Plan

Welcome to our blog post on How To Write a Business Plan for a Bank in 9 Steps. In today's digital age, the banking industry is undergoing a significant transformation with the rise of online banking platforms. According to recent statistics, the global digital banking market is projected to reach $22.3 trillion by 2027, with a CAGR of 8.6% from 2020 to 2027. This exponential growth highlights the immense potential for entrepreneurs and aspiring bankers to establish their own digital banking platform.

When it comes to starting a digital banking platform, having a well-designed business plan is crucial for success. A comprehensive business plan not only serves as a roadmap, but also helps attract potential investors and secure necessary funding. In this article, we will guide you through the essential steps to create a compelling business plan that banks will find irresistible.

Step 1: Conduct market research and analysis

Step 2: Determine the target market and customer profile

Step 3: Identify and analyze potential competitors

Step 4: Perform a feasibility study

Step 5: Define the unique value proposition and competitive advantage

Step 6: Develop a comprehensive financial plan

Step 7: Establish strategic goals and objectives

Step 8: Define the organizational structure and management team

Step 9: Obtain necessary licenses and regulatory approvals

In the upcoming sections, we will delve into each step in detail, providing you with valuable insights and practical tips to successfully navigate the process of writing a business plan for a bank.

Building a digital banking platform that offers convenience, security, and financial literacy can revolutionize the banking industry. So, let's dive into the first step - conducting market research and analysis to lay the foundation for your business plan.

Conduct Market Research And Analysis

Conducting thorough market research and analysis is a crucial step in developing a successful business plan for a digital banking platform. This process allows you to gain a deep understanding of the market landscape, identify potential opportunities and challenges, and make informed decisions when it comes to your target market and customer profile.

• Identify the size and growth potential of the market: Begin by gathering data on the size of the market you intend to enter. This will help you assess the growth potential and determine if it presents a viable opportunity for your digital banking platform.
• Analyze your target market: Dive deeper into your target market by identifying demographic characteristics, such as age, income, and location. Understanding the needs and preferences of your target market is crucial in developing tailored financial products and services.
• Assess market trends and competition: Stay updated on the latest market trends and innovations in the digital banking industry. Analyze your potential competitors to understand their strengths, weaknesses, and market positioning. This will help you identify gaps in the market and differentiate your platform.
• Evaluate customer needs and pain points: Interview potential customers and conduct surveys to gather insights into their financial needs, challenges, and pain points. This information will be invaluable in designing solutions that address their specific requirements.

Tips for Conducting Market Research and Analysis:

• Utilize both primary and secondary research methods to gather comprehensive market data.
• Monitor industry reports, publications, and online resources to stay up-to-date with market trends.
• Consider partnering with market research firms or consultants for a more in-depth analysis.
• Engage with potential customers through focus groups or online communities to gather qualitative insights.
• Regularly review and update your market research to adapt to evolving market dynamics.

By conducting thorough market research and analysis, you will be equipped with valuable information to guide your business decisions and develop a compelling business plan for your digital banking platform.

Determine The Target Market And Customer Profile

Identifying and understanding your target market is crucial for the success of your digital banking platform. It allows you to tailor your products, services, and marketing efforts to meet the specific needs and preferences of your customers. Here are the important steps to determine your target market and customer profile:

• Conduct market research: Start by conducting thorough market research to gather insights and data about the demographics, psychographics, and behavior of potential customers. This will help you understand who your ideal customers are and what they are looking for in a digital banking platform.
• Segmentation: Once you have collected the necessary information, segment your target market based on criteria such as age, income level, location, and financial goals. This will allow you to create targeted marketing campaigns and develop personalized offerings for each segment.
• Identify customer needs: Analyze the pain points and challenges faced by your target market. Identify their financial goals and aspirations, and determine how your platform can address their needs effectively.
• Competitor analysis: Evaluate your competitors' target markets and customer profiles to identify any gaps or opportunities in the market. Differentiate your platform by offering unique features or services that specifically cater to your target market's needs.

Tips for determining the target market and customer profile:

• Use surveys, interviews, and focus groups to gather firsthand feedback from potential customers. This will give you valuable insights into their preferences, pain points, and expectations.
• Stay updated with market trends and changes in customer behavior. Continuously monitor and analyze data to ensure your target market profile remains relevant and accurate.
• Consider utilizing data analytics tools to gain a deeper understanding of your target market. This will help you make data-driven decisions and refine your marketing strategies based on customer preferences.
• Regularly review and adapt your target market and customer profile as your platform grows and evolves. Customer needs and preferences may change over time, and it is crucial to stay agile and proactive in meeting those changes.

Identify And Analyze Potential Competitors

Identifying and analyzing potential competitors is a crucial step in creating a business plan for a bank. This step helps you assess the competitive landscape and understand the strengths and weaknesses of other players in the market. Here are some key considerations:

• Research: Conduct thorough research to identify existing banks and financial institutions offering similar services. Look for both traditional brick-and-mortar banks as well as digital banking platforms.
• Online Presence: Explore their online presence and evaluate their digital banking capabilities. Look for features, functionalities, and user experience that differentiate them.
• Competitive Advantages: Identify the unique selling propositions (USPs) of your competitors. Determine what sets them apart from others in terms of product offerings, customer service, technology, or any other factors.
• Customer Reviews: Analyze customer reviews and feedback on various platforms to gain insights into customer satisfaction and grievances. This will help you identify areas where your competitors excel or fall short.
• Market Share: Determine the market share and customer base of each competitor. This will give you an idea of the scale and reach you need to target.
• Financial Performance: Analyze the financial performance of your competitors by studying their annual reports, financial statements, and any available data. This will help you understand their growth trajectory and potential vulnerabilities.
• Look beyond direct competitors and consider indirect ones, such as fintech start-ups or alternative financial service providers.
• Keep an eye on emerging trends and innovations in the banking industry to stay ahead of your competitors.
• Consider conducting a SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis for each major competitor to gain a deeper understanding of their positioning.

Identifying and analyzing potential competitors is not only about understanding the competition but also about finding opportunities to differentiate your digital banking platform. By studying your competitors, you can identify gaps in the market and develop strategies that align with your unique value proposition.

Perform A Feasibility Study

A feasibility study is a crucial step in the business planning process. It involves conducting a comprehensive analysis to determine the viability of your digital banking platform. This study will help you assess the potential risks and benefits associated with your business idea and make informed decisions.

During the feasibility study, you should analyze various aspects of your business idea, including the market demand, competition, technological requirements, financial projections, and regulatory landscape. Here are the key steps to perform a feasibility study:

• Conduct thorough market research to understand the current demand for digital banking services and identify any gaps in the market.
• Evaluate the potential size of your target market and identify your ideal customer profile to tailor your offerings effectively.
• Assess the competitive landscape by analyzing existing digital banking platforms, their features, pricing strategies, and customer base.
• Consider the technological requirements for establishing and maintaining your online banking platform. Ensure that you have access to reliable and secure infrastructure.
• Develop financial projections and assess the profitability and sustainability of your business model. Consider factors such as revenue streams, operating expenses, and potential return on investment.
• Study the regulatory environment and identify the licenses and approvals required to operate a digital banking platform in your target market.
• Engage with industry experts and seek their advice during the feasibility study to gain valuable insights.
• Consider conducting surveys or focus groups to gather feedback from potential customers and validate your assumptions.
• Regularly review and update your feasibility study as market conditions and industry trends evolve.

By conducting a thorough feasibility study, you will gain a deeper understanding of the viability and potential of your digital banking platform. This study will serve as a foundation for making informed decisions throughout the business planning process.

Define The Unique Value Proposition And Competitive Advantage

Defining the unique value proposition and competitive advantage of your digital banking platform is crucial in order to differentiate yourself from other financial institutions and attract customers. Your value proposition is the core promise you make to customers about the benefits they will receive by using your platform. Your competitive advantage is what sets you apart from competitors and gives you an edge in the market.

• Identify Your Unique Selling Points: Determine what makes your platform unique and why customers should choose it over others. Consider features such as advanced security measures, user-friendly interface, personalized financial advice, or innovative banking solutions. These selling points will help you stand out and provide value that your competitors might not offer.
• Prioritize Customer Needs: Understand your target market's pain points and financial needs. Tailor your offerings and services to address these specific needs. Whether it is offering low-interest rates on loans, providing competitive investment options, or simplifying the account opening process, make sure your value proposition directly addresses the challenges your customers face.
• Analyze Competitors: Study your competitors' value propositions and competitive advantages. Identify the gaps and areas where you can excel. Look for opportunities to offer a better customer experience, more innovative products, or superior customer service. This analysis will allow you to position your platform as a market leader and attract customers seeking a better banking experience.

Tips for Defining Your Value Proposition and Competitive Advantage:

• Emphasize the convenience and accessibility of your digital banking platform.
• Showcase your commitment to security and privacy.
• Highlight any partnerships or collaborations that add value to your platform.
• Demonstrate your expertise in financial education and advisory services.
• Offer unique features such as budgeting tools, financial planning, or rewards programs.

By clearly defining your unique value proposition and competitive advantage, you can effectively market your digital banking platform to potential customers and secure their trust and loyalty. Remember, your value proposition should clearly communicate the benefits customers will gain by choosing your platform and should differentiate you from competitors. Building a strong value proposition will be instrumental in the success of your business plan.

Develop A Comprehensive Financial Plan

Developing a comprehensive financial plan is a crucial step in creating a business plan for a bank. This plan outlines the projected financial performance of your digital banking platform and demonstrates to potential investors and lenders that your business is financially viable.

When developing your financial plan, consider the following:

• Revenue projections: Estimate the revenue your digital banking platform is expected to generate. This can include income from various sources such as transaction fees, interest on loans, and commissions from financial products.
• Expense projections: Forecast the expenses associated with running your platform, including personnel costs, technology infrastructure, marketing expenses, and regulatory compliance costs.
• Capital requirements: Calculate the amount of capital needed to start and operate your digital banking platform. This includes upfront costs such as software development, marketing campaigns, and initial infrastructure investments.
• Profitability analysis: Assess the profitability of your platform by calculating the net income and profit margin. This analysis helps determine the financial feasibility and sustainability of your business.
• Cash flow projections: Forecast the cash flow of your digital banking platform, including the inflows from revenue and investment, as well as the outflows from expenses and loan repayments.
• Funding sources: Identify potential funding sources for your platform, such as bank loans, venture capital investments, or crowdfunding campaigns.
• Research industry benchmarks and financial ratios to ensure your projections are realistic and market-aligned.
• Consider the potential impact of external factors such as economic conditions, regulatory changes, and customer behavior on your financial plan.
• Regularly review and update your financial plan to reflect any changes in your business or market conditions.

By developing a comprehensive financial plan, you can demonstrate to banks and investors that your digital banking platform has a clear pathway to profitability and long-term success.

Establish Strategic Goals And Objectives

Establishing strategic goals and objectives is a crucial step in writing a business plan for a bank. These goals and objectives will serve as a roadmap for your digital banking platform, guiding all your actions and decisions towards a defined direction. It is important to clearly define and articulate these goals and objectives to ensure that everyone in the organization is aligned and working towards a common vision.

When establishing strategic goals and objectives, consider the long-term vision of your digital banking platform . What do you envision your platform to become in the next five or ten years? How do you see it evolving and growing? Define these aspirations into specific goals that are achievable and measurable.

Additionally, it is important to set objectives that are SMART - Specific, Measurable, Achievable, Relevant, and Time-bound. This means that each objective should be clearly defined, quantifiable, realistic, relevant to your business, and have a deadline for completion.

Here are some tips to consider when establishing strategic goals and objectives for your digital banking platform:

• Take into account market trends and customer demands when defining goals and objectives.
• Align your goals and objectives with your unique value proposition and competitive advantage.
• Consider both financial and non-financial objectives, such as customer satisfaction and innovation.
• Involve key stakeholders in the goal-setting process to ensure buy-in and commitment.
• Regularly review and update your goals and objectives to adapt to changes in the market and industry.

By establishing clear strategic goals and objectives, you are providing a direction for your digital banking platform to strive towards. These goals will serve as a compass, guiding your decisions and actions as you work towards success in the competitive banking industry.

Define The Organizational Structure And Management Team

Defining the organizational structure and management team is a crucial step in writing a business plan for a bank. This section outlines the key individuals who will be responsible for managing the operations and achieving the strategic goals of the digital banking platform.

To begin, it is important to clearly outline the various departments and positions within the organization. This includes roles such as CEO, CFO, CTO, and COO, as well as departments like finance, technology, operations, and customer service. Clearly defining these roles and responsibilities helps establish a clear chain of command and ensures that all areas of the business are properly managed.

• Consider including an organizational chart to visually depict the structure of the organization.
• Provide a brief description of each key management team member's background, skills, and experience.
• Highlight any unique qualities or expertise that these individuals bring to the table that make them a valuable asset to the organization.
• Consider including any advisory boards or external consultants that will be involved in decision-making processes.

Furthermore, it is essential to emphasize the qualifications and experience of each member of the management team. This includes their educational background, professional accomplishments, and relevant industry experience. Demonstrating that the team possesses the necessary skills and expertise significantly strengthens the credibility of the business plan and instills confidence in potential investors or lenders.

Lastly, it is important to consider and outline any plans for future expansion or growth. As the digital banking platform evolves, so too may the organizational structure and management team. Clearly articulate the expected growth trajectory and how the team will adapt to the changing needs of the business.

By properly defining the organizational structure and management team, the business plan for a digital banking platform becomes a comprehensive document that demonstrates a solid foundation for success. This section showcases the individuals driving the business forward, while also addressing how the organization will adapt and grow over time.

Obtain Necessary Licenses And Regulatory Approvals

Obtaining the necessary licenses and regulatory approvals is a crucial step in establishing a digital banking platform. Compliance with legal and regulatory requirements ensures that your business operates within the boundaries set by governing authorities. Here are the key steps to take when seeking licenses and approvals:

• Research Licensing Requirements: Begin by researching the specific licenses and permits required for operating a digital banking platform in your jurisdiction. Different countries and regions may have varying regulations, so it is essential to be well-informed. Consult with legal experts or industry professionals to navigate the complexities of licensing.
• Submit Applications: Once you have identified the licenses and permits needed for your digital banking platform, prepare and submit the required applications. Be sure to provide accurate and comprehensive information, as any discrepancies or oversights could lead to delays or rejection of your application.
• Engage with Regulatory Authorities: Throughout the licensing process, it is important to maintain open lines of communication with the relevant regulatory authorities. Address any queries or requests for additional information promptly and transparently. This will help in establishing a positive relationship with the authorities and expediting the approval process.
• Comply with Regulatory Requirements: As you progress towards obtaining licenses and approvals, ensure that your business fully complies with all relevant regulatory requirements. This may include maintaining appropriate capital adequacy ratios, implementing robust anti-money laundering measures, and adhering to data protection and privacy laws.
• Seek Legal Counsel: Working with experienced legal counsel specializing in financial regulations can prove invaluable during this process. They can offer guidance, review your compliance efforts, and help navigate any legal complexities that may arise.
• Stay Updated: Regulatory frameworks and requirements are subject to change, so it is crucial to stay informed about any updates or amendments. Continuously monitor regulatory developments to ensure that your digital banking platform remains compliant.
• Start the licensing process early: Obtaining licenses and regulatory approvals can be a time-consuming process. Starting early allows for any unexpected delays and ensures you meet your desired launch timeline.
• Be thorough and accurate: Pay meticulous attention to detail when completing license applications. Provide all necessary documentation and information to avoid unnecessary delays or complications.
• Engage with industry associations: Connecting with industry associations or peer networks can provide you with valuable insights into navigating the licensing process. Networking with experienced professionals can help you anticipate challenges and streamline the approval process.
• Maintain ongoing compliance: Obtaining licenses and regulatory approvals is just the first step. Develop robust compliance procedures and internal controls to ensure ongoing adherence to regulatory requirements. Regularly review and update your compliance practices as regulations evolve.

In conclusion, writing a business plan for a bank requires careful research, analysis, and strategic thinking. By following the nine steps outlined in this checklist, you can create a comprehensive and compelling plan that demonstrates the viability of your digital banking platform. From conducting market research to obtaining necessary licenses, each step is crucial in building a strong foundation for your business. Remember to highlight your unique value proposition and competitive advantage, develop a comprehensive financial plan, establish strategic goals, and define your organizational structure. With a well-crafted business plan, you can confidently approach banks and secure the funding needed to bring your digital banking platform to life.

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Writing a business plan in 9 steps

Discover all the doors a solid business plan can help open for you, including business banking accounts, loans and other forms of funding.  Presented by Chase for Business .

Whether you're starting your first business or your company is seeking funding , a business plan is essential for charting your path to success.

A well-written and researched business plan can act as a roadmap that outlines your plan for selling and marketing your products and services, making profits and growing over a period of three to five years. Your plan can also help position your company within the industry and set your business apart from competitors.

With the right tools and a little excitement, you can write a business plan. In this article, you'll learn how to write a business plan in a step-by-step process.

1. Ask these questions

To get in the right frame of mind and gather necessary details for writing an effective business plan, ask yourself the following questions:

• Why do I want to start this business? What’s my reasoning or inspiration?
• How does my business stand out from the competition?
• What is my unique value proposition?
• Who are my target customers? How can I reach them?
• Who is already on my management team? What gaps do I need to fill?
• How can my business make a profit? How soon will it break even?

Knowing the answers to these questions will help guide the structure and cadence of your business plan.

2. Research before you write

Your business plan should be a well-researched, actionable document that you can return to again and again. To get the information you need, use the following tactics when writing a business plan:

• Do a SWOT analysis. Consider your company’s strengths, weaknesses, opportunities and threats. This type of analysis allows you to identify what sets your business apart and plan for potential risks.
• Perform due diligence. If you’re planning to buy an existing business, make sure you research the company’s finances, sales, inventory and other aspects to ensure it’s a sound investment.
• Use Porter’s Five Forces . This analytical approach is a framework for analyzing your company’s competitive environment.

3. Think about your audience

Ask yourself, who will read my business plan, and what kind of information do they need? For example, if you’re looking for funding, you should include plenty of financial data and forecasting. If you’re seeking to bring on new business partners, you should include a detailed section where you outline how the business intends to support growth over the next three to five years.

If you want to share your business plan with different types of stakeholders, think about writing more than one version. This will allow you to make sure every reader has the right, targeted details about your business.

4. Include market analysis

Writing and researching a business plan gives you the opportunity to learn more about your industry, market, competitors, audience, local government, suppliers, sales channels and more. It also allows you to assess risk related to your market or supply chain.

To do this research, you can start by looking for online data related to your industry and target audience. It’s a good idea to include data that's recent enough to still be relevant and from a credible source.

With a bit of patience, the information you need can be found online for free. Services also exist that provide customized data for a fee — which can be a good option for business owners without the luxury of time.

5. Make realistic projections

When writing a business plan, you’re naturally going to be excited, and it may feel easy to think positively and overestimate how well your business will perform. Optimism may cause you future distress when investors or business partners expect more than your business is able to provide.

It’s always better to aim low and blow your projections out of the water than to do the opposite. Make your business plan as realistic as possible. When you include accounting data, carefully consider the market, your competitors and the demand for your products.

6. Share your vision

Although financial projections, product descriptions and management charts serve as the focus for most business plans, including a vision statement can help you personalize your goals and refer back to your initial mission.

In this section, briefly discuss your reason for starting the business, share any underlying motivations and hypothesize on how your company can contribute to a larger cause.

7. Keep it concise

As you write your business plan, it's tempting to include every detail about your company. Before you know it, your market analysis alone might be 10 pages long. If your business plan becomes too big, it may become less actionable, or your readers may not devote the time to reading and comprehending it.

Take care to feature only the essential data when you write your business plan. Be sure to include the standard sections mentioned above.

A good suggestion is to feature a page or two for each section plus any financial statements or resumes. If you have additional research or notes that don't fit neatly into your plan, keep them on file for your own internal use.

8. Include a visual element

Most business plans tend to be text-heavy — but that doesn’t mean you can’t make yours visually appealing for the reader. Include relevant graphics, pictures, charts and diagrams.

9. Keep the style simple

Focus on presenting your information and storytelling in a clear way that doesn’t require additional context to be understood. Keep the formatting as simple as possible. Use a classic serif font like Times New Roman to maintain readability. The last thing you want is for investors to focus more on your font choice than your financial projections.

A business plan can help you review your idea and put actionable goals in place. Once you’ve worked out the details, a  business banker  can walk you through important next steps like  setting up a business checking account .

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How to Write a Business Plan, Step by Step

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What is a business plan?

1. write an executive summary, 2. describe your company, 3. state your business goals, 4. describe your products and services, 5. do your market research, 6. outline your marketing and sales plan, 7. perform a business financial analysis, 8. make financial projections, 9. summarize how your company operates, 10. add any additional information to an appendix, business plan tips and resources.

A business plan outlines your business’s financial goals and explains how you’ll achieve them over the next three to five years. Here’s a step-by-step guide to writing a business plan that will offer a strong, detailed road map for your business.

ZenBusiness

A business plan is a document that explains what your business does, how it makes money and who its customers are. Internally, writing a business plan should help you clarify your vision and organize your operations. Externally, you can share it with potential lenders and investors to show them you’re on the right track.

Business plans are living documents; it’s OK for them to change over time. Startups may update their business plans often as they figure out who their customers are and what products and services fit them best. Mature companies might only revisit their business plan every few years. Regardless of your business’s age, brush up this document before you apply for a business loan .

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

This is your elevator pitch. It should include a mission statement, a brief description of the products or services your business offers and a broad summary of your financial growth plans.

Though the executive summary is the first thing your investors will read, it can be easier to write it last. That way, you can highlight information you’ve identified while writing other sections that go into more detail.

» MORE: How to write an executive summary in 6 steps

Next up is your company description. This should contain basic information like:

Your business’s registered name.

Address of your business location .

Names of key people in the business. Make sure to highlight unique skills or technical expertise among members of your team.

Your company description should also define your business structure — such as a sole proprietorship, partnership or corporation — and include the percent ownership that each owner has and the extent of each owner’s involvement in the company.

Lastly, write a little about the history of your company and the nature of your business now. This prepares the reader to learn about your goals in the next section.

» MORE: How to write a company overview for a business plan

The third part of a business plan is an objective statement. This section spells out what you’d like to accomplish, both in the near term and over the coming years.

If you’re looking for a business loan or outside investment, you can use this section to explain how the financing will help your business grow and how you plan to achieve those growth targets. The key is to provide a clear explanation of the opportunity your business presents to the lender.

For example, if your business is launching a second product line, you might explain how the loan will help your company launch that new product and how much you think sales will increase over the next three years as a result.

» MORE: How to write a successful business plan for a loan

In this section, go into detail about the products or services you offer or plan to offer.

You should include the following:

An explanation of how your product or service works.

The pricing model for your product or service.

The typical customers you serve.

Your supply chain and order fulfillment strategy.

You can also discuss current or pending trademarks and patents associated with your product or service.

Lenders and investors will want to know what sets your product apart from your competition. In your market analysis section , explain who your competitors are. Discuss what they do well, and point out what you can do better. If you’re serving a different or underserved market, explain that.

Here, you can address how you plan to persuade customers to buy your products or services, or how you will develop customer loyalty that will lead to repeat business.

Include details about your sales and distribution strategies, including the costs involved in selling each product .

» MORE: R e a d our complete guide to small business marketing

If you’re a startup, you may not have much information on your business financials yet. However, if you’re an existing business, you’ll want to include income or profit-and-loss statements, a balance sheet that lists your assets and debts, and a cash flow statement that shows how cash comes into and goes out of the company.

Accounting software may be able to generate these reports for you. It may also help you calculate metrics such as:

Net profit margin: the percentage of revenue you keep as net income.

Current ratio: the measurement of your liquidity and ability to repay debts.

Accounts receivable turnover ratio: a measurement of how frequently you collect on receivables per year.

This is a great place to include charts and graphs that make it easy for those reading your plan to understand the financial health of your business.

This is a critical part of your business plan if you’re seeking financing or investors. It outlines how your business will generate enough profit to repay the loan or how you will earn a decent return for investors.

Here, you’ll provide your business’s monthly or quarterly sales, expenses and profit estimates over at least a three-year period — with the future numbers assuming you’ve obtained a new loan.

Accuracy is key, so carefully analyze your past financial statements before giving projections. Your goals may be aggressive, but they should also be realistic.

NerdWallet’s picks for setting up your business finances:

The best business checking accounts .

The best business credit cards .

The best accounting software .

Before the end of your business plan, summarize how your business is structured and outline each team’s responsibilities. This will help your readers understand who performs each of the functions you’ve described above — making and selling your products or services — and how much each of those functions cost.

If any of your employees have exceptional skills, you may want to include their resumes to help explain the competitive advantage they give you.

Finally, attach any supporting information or additional materials that you couldn’t fit in elsewhere. That might include:

Licenses and permits.

Equipment leases.

Bank statements.

Details of your personal and business credit history, if you’re seeking financing.

If the appendix is long, you may want to consider adding a table of contents at the beginning of this section.

How much do you need?

with Fundera by NerdWallet

We’ll start with a brief questionnaire to better understand the unique needs of your business.

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

Here are some tips to write a detailed, convincing business plan:

Avoid over-optimism: If you’re applying for a business bank loan or professional investment, someone will be reading your business plan closely. Providing unreasonable sales estimates can hurt your chances of approval.

Proofread: Spelling, punctuation and grammatical errors can jump off the page and turn off lenders and prospective investors. If writing and editing aren't your strong suit, you may want to hire a professional business plan writer, copy editor or proofreader.

Use free resources: SCORE is a nonprofit association that offers a large network of volunteer business mentors and experts who can help you write or edit your business plan. The U.S. Small Business Administration’s Small Business Development Centers , which provide free business consulting and help with business plan development, can also be a resource.

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How to Write a Business Plan to Start a Bank

Feb.29, 2024

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Table of Content

Bank Business Plan Checklist

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

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

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

Sample Business Plan for Bank

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

Executive Summary

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

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

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

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

Industry Analysis

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

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

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

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

Customer Analysis

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

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

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

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

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

Competitive Analysis

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

1. National Banks

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

2. Regional Banks

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

3. Community Banks

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

4. Online Banks

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

Market Research

Our market research shows that:

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

We conclude that:

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

Operations Plan

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

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

Management Team

The following individuals make up our management team:

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

Financial Projections

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

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

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

Our financial projections are as per our:

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

Select the Legal Framework for Your Bank

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

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

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

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

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

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

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

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

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

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

Keys to Success

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

Customer Satisfaction

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

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

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

Operational Efficiency

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

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

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

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

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

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

Frequently Asked Questions

How do I start a small bank business?

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

Are banks profitable businesses?

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

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Writing a Bank Business Plan

• Written By Dave Lavinsky

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

What is a Business Plan?

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

Why Write a Business Plan

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

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

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

Sources of Business Funding for Banks

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

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

Resources to Write a Bank Business Plan

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

Sample Plans for Your Business

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

Business planning software

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

Market Research

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

Industry Analysis

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

Target Market Analysis

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

Competition Analysis

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

Customer Segments

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

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

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

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

Financial templates

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

Accounting and Legal Advice 

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

Bank Business Plan Template

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

Executive Summary

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

Company Description

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

Products and Services

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

Market Analysis

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

Sales and Marketing

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

Financial projections

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

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

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

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

Bank Business Plan Template FAQs

Do i need to use a business plan template.

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

Where can I find a business plan template?

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

How long should my business plan be?

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

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

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

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What is private banking, and how does it work?

Find out why private banking might (or might not) be right for you..

Private banking refers to a host of services offered to a bank’s wealthiest customers. You can think of private banking versus regular banking as the difference between flying first class and coach.

In other words, private banking involves the same types of services that regular customers can access, but includes a few more perks and far more personal attention. If you have a higher income or large amount of assets, private banking might benefit you.

Private banking is a form of banking that is customized for an individual or household with a high net worth.

Depending on your bank and how it handles private banking, you might have one banker who works with you one-on-one or access to a team of financial professionals. In either case, one thing is for sure: If you’re a private banking customer, you will be treated well. You aren’t likely to be waiting on hold for 20 minutes, hoping to talk to a bank manager, or having any conversations about getting an overdraft fee refunded .

Common private banking services

If you engage in private banking, there will be numerous wealth management services that you may take advantage of, often including the following:

Tax specialists. They can offer insight on everything from income tax planning to how an investment will affect your taxes.

Estate planning specialists. They can help you transfer your wealth to your heirs.

Insurance specialists. If you’re looking for products such as life insurance or long-term care insurance, they can make sure your assets are well protected.

Philanthropic guidance. If you want to set up a foundation or make the most effective impact with your donations, private banking services can help with that.

Lending services . If you’re interested in any loan, from real estate loans to bridge loans, your private bankers can help.

Private banking eligibility

Who is eligible for private banking? Every bank has its own eligibility requirements, but commonly, private banking services are available to clients with assets of at least $250,000. Some banks will have higher thresholds of $750,000 or $1 million in household income, but if you have at least $250,000, you should be able to find a bank that will offer private banking services.

Pros and cons of private banking

There are pluses and minuses with just about anything, and private banking isn’t any different. Some pros and cons you’ll want to consider include:

Convenience: With private banking, you should be able to handle all of your finances under one roof, with one financial institution.

Speed: When accessing private banking services, you shouldn’t have to stay on hold or stand in line, waiting for your turn to talk to somebody. Even if you do, your private bankers will do everything they can to make sure you’re in and out of a branch or that a phone call you make is conducted as efficiently as possible.

A brain trust at your disposal: Maybe one of the best things about private banking is that you have access to so many professionals, and you may get a lot of consulting and advice for free that you wouldn’t if you had to hire all of your financial professionals (like an estate planning attorney or financial adviser) separately.

It can be expensive. If you’re investing money through private banking services, you’re going to pay some fees or commissions. The fees may be worth it since they’re probably offset by the free professional advice you receive. But you’ll want to crunch numbers and make sure you’re comfortable with the costs involved. For instance, you might pay a 1% asset management fee on an investment portfolio. Or you may have to pay a monthly fee if your checking account balance goes under $50,000. Every financial institution is different, so before starting a private banking relationship, you’ll want to know how much this will cost you.

There may be turnover at your bank: When you work with independent professionals, such as an insurance broker or a tax accountant, they may have their own practices and are likely to be in business until they retire. That makes it easy to establish a relationship that lasts years if not decades. If you’re working with private banking professionals, your bank could be swallowed up by another bank, and some of the employees you’ve been working with could be shuttled out. Or, some of the gifted professionals you’re working with may leave to work at another bank or open up their own practice. It could be harder to maintain an enduring relationship with the private banking staff.

You may not be working with somebody who has a fiduciary duty: On the whole, private bankers will work toward your best interests. But the private bankers you work with may or may not be a fiduciary; if they’re not, they aren’t legally and ethically obligated to act in your best interest. For instance, a non-fiduciary professional could steer you toward investments owned by the bank instead of another investment that may be more profitable for you. Still, fiduciaries can give bad investment advice, and non-fiduciaries can give excellent financial advice. So whether you want a fiduciary is something to consider, but it shouldn’t be a deal breaker.

Is private banking right for you?

Whether you should or shouldn’t engage in private banking is purely a judgment call. If your income is on the high side, you really like your bank, and you want to supercharge your financial portfolio by saving and investing more, or perhaps working on your estate planning, it’s probably worth having a conversation with your bank about whether their private banking team can help you.

Preparing to cash a money order

Where to cash a money order, steps to cash a money order.

• Tips for cashing a money order

How to Cash a Money Order: A Step-by-Step Guide

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• A money order is a method of sending money that's more secure than a personal check or cash.
• To cash a money order, verify its authenticity and find a bank, credit union, or check-cashing store.
• Bring photo ID when you cash a money order, and expect to pay a fee in most cases.

If you're receiving a payment from someone you don't know — especially through the mail — you might want to consider a money order instead of a personal check or cash payment.

"A money order is a method of sending a prepaid amount of money to somebody," explains Chane Steiner, CEO of Crediful. "It's considered very secure and is an excellent way to send money quickly in situations where a personal check is not appropriate. In some instances, money orders are even preferred to cash in hand."

Here's how to cash a money order quickly and securely.

The first thing to do when you receive a money order is to review the document and make sure the money order was filled out correctly. Double-check its value to make sure the amount is correct; money orders are prepaid, so you should know in advance how much you're receiving. Also, make sure the name on the money order matches the name on your ID.

You'll also want to verify that the money order is legitimate. If you know the sender, this might not be a concern, but if you aren't familiar with the person sending it — maybe you sold an item on Facebook Marketplace, for example — you'll want to confirm the amount is what it's supposed to be.

Banks and credit unions

Going directly to the issuer is also a way to verify the money order. If you're cashing with a bank or credit union  where you're an account holder, you should be able to avoid fees.

Grocery stores and check-cashing businesses

Many retail locations have a money-transfer outlet like Moneygram or Western Union counter to make the process convenient. 

If you go directly to the place that issued your money order — that could be a place like Western Union, Moneygram, or Walmart — you might be able to minimize your fees.

Postal services for postal money orders

Many consumers send money orders from the United States Post Office, and a local post office will cash USPS money orders. If you receive a USPS money order , you can cash it for free.

Plan to cash your money order in a timely fashion

The longer you hold on to the money order, there's a chance it can be lost, damaged, or misplaced.

Plus, cashing a money order quickly is a way to protect yourself against possible fraud, since the sender can cancel their money order. If you've already cashed it with the issuer, the sender won't be able to cancel.

Present valid identification

You will need to provide a photo ID, such as a driver's license, passport, or other government-issued ID, to cash a money order.

Endorse the money order

Don't sign the money order in advance; add a signature to the back of the money order when you are at the counter in front of a bank teller or other customer service representative.

"Sign your money order only once you are handing it over to be cashed. Signing it beforehand can be risky if it is stolen," says Steiner.

Pay associated fees

Fees vary by financial institution or retailer. If you're worried about overpaying, call and ask about fees before you go. Some banks also have a Schedule of Fees online, which is a document with all common bank fees .

Receive your cash

Count the money that you receive, and make sure to save your receipt. Put the cash away securely before leaving the location.

Tips for safely cashing a money order

Avoiding scams and fraudulent money orders.

The easiest way to avoid a money order scam is to call the money order issuer, or visit its website, to verify the funds. Every money order includes a serial number for verification.

For Postal Service money orders, visit this webpage to learn more about how to spot a fake.

What to do if a money order is lost or stolen

If you need to cancel a money order because it was lost or stolen, contact the issuer immediately. You will likely be asked to fill out a request form and pay a cancelation fee.

Postal money orders cannot be canceled, but they can be replaced for a fee of $18. It may take up to 60 days.

Cashing a money order FAQs

The best banks will cash money orders for free for customers. Non-customers may have to pay a fee.

You will need a valid photo ID to cash a money order.

Retail and check-cashing stores usually charge a fee to cash a money order. You can avoid this fee by visiting your bank or credit union instead.

A bank where you are not a customer may charge a fee to cash a Postal Service money order. The Post Office will cash it for free if you present a valid photo ID.

Alert your bank and the money order issuer, and do not attempt to cash it.

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

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

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Canada's capital-gains tax hike faces heat from business groups

Letter to finance minister from six major industry associations urges Ottawa to cancel plan to raise tax inclusion rate

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Article content

Some of Canada’s biggest business groups are urging Prime Minister Justin Trudeau to reverse his government’s plan to raise the tax inclusion rate on capital gains.

Canada's capital-gains tax hike faces heat from business groups Back to video

The government should cancel the proposed tax hike, six major industry associations, including the Canadian Chamber of Commerce and the Canadian Venture Capital and Private Equity Association , wrote in a letter Thursday to Finance Minister Chrystia Freeland.

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“We are calling on the government to heed the advice of many of Canada’s most respected leaders and commit to scrapping the ill-advised inclusion rate increase,” the groups wrote.

In last month’s budget, Freeland unveiled plans to tax Canadian companies and individuals on two-thirds of their realized capital gains, up from half currently. The government said the changes, which are scheduled to come into effect June 25, would impact just 0.13 per cent of Canadians and 12.6 per cent of businesses. For individuals, only gains over $250,000 are taxed at the new, higher rate.

The industry groups dispute the government’s estimates, arguing that one in five Canadians will be “directly impacted over the next 10 years and the effects of this tax hike will be borne by all Canadians, directly or indirectly.”

The letter adds to a chorus of groups criticizing the planned tax increase. The Canadian Medical Association also opposes the changes, saying the many doctors that incorporate their practices will face a higher tax burden. More than one in 10 Canadians owns an investment property, according to a report by Royal Lepage, and they’ll pay more if they sell for a large gain. Primary residences are exempt from capital gains taxes in Canada.

“If enacted, this change will have significant knock-on impacts, including making it harder for Canadians to access medical practitioners, limiting employment opportunities and making the prospect of starting, growing or succession planning a business more difficult, especially for multigenerational businesses such as farms, fisheries and small businesses,” the groups said.

The tax change is expected to generate $19.4 billion in revenue over a five-year period, the government estimates. That money may help contain deficits, even as the government ramps up new spending, including measures intended to help with housing affordability and improve the prospects of young people.

Freeland did not include the tax change in her main budget bill on April 30, saying she plans to bring in separate legislation for it.

The four other industry associations that signed the letter are Canadian Manufacturers and Exporters, the Canadian Federation of Independent Business, the Canadian Franchise Association and the Canadian Canola Growers Association.

“Our country must end its reliance on tax-and-spend politics, which is undermining innovation and growth to the detriment of both today’s Canadians and future generations,” the groups wrote.

With assistance from Jay Zhao-Murray

Bloomberg.com

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

Creating a business plan is essential for any business, but it can be especially helpful for digital bank businesses that want to improve their strategy or raise funding.

A well-crafted business plan outlines the vision for your company, but also 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 critical elements every digital bank business owner should include in their business plan.

Download the Ultimate Business Plan Template

What is a Digital Bank Business Plan?

A digital 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 Digital Bank Business Plan?

A digital bank business plan is required for banks and investors. The document is a clear and concise guide to 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 Digital Bank Business Plan

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

Executive Summary

The executive summary of a digital 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 digital 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 digital 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 digital bank firm, mention this.

You will also include information about your chosen digital 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 important component of a digital 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 digital 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 digital bank business’ customers may include:

• Small businesses that need online banking solutions
• Start-ups and tech companies that are looking for innovative ways to manage their finances
• Freelancers and consultants who need a simple way to get paid and track expenses

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 digital 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 digital bank business may have:

• 24/7 customer service
• Higher deposit limits
• More locations
• Better mobile app

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 digital bank business via a PR or influencer marketing campaign.

Operations Plan

This part of your digital 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 digital bank business include reaching $X in sales. Other examples include expanding to new markets, developing new products and services, and hiring new personnel.

Management Team

List your team members here, including their names and titles, as well as their expertise and experience relevant to your specific digital 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, as well as 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 Digital Bank Firm

Balance sheet.

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

• Assets : All of the things 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 Digital Bank Firm

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 ash flow from:

• Investments

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

Sample Cash Flow Statement for a Startup Digital Bank Firm

Finally, 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.

Create Your Digital Bank Business Plan

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

Now that you know how to write a business plan for your digital 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!

Money latest: Mortgage rates could go lower than expected, BoE hints; 'era of cheap food over,' says supermarket boss

The Bank of England has hinted a base rate cut is coming, and it's "not ruled out in June". Read all today's personal finance and consumer news - and listen to the latest Ian King Business Podcast below.

Thursday 9 May 2024 23:09, UK

• Interest Rates
• Interest rate held at 5.25% | June rate cut 'not ruled out but not fait accompli' - BoE | Cuts may take interest rate 'lower than currently priced into market'
• Supermarket boss declares end of the 'cheap food era'
• Gordon Ramsay to open new restaurants on London skyscraper

Essential reads

• Ed Conway on interest rates : Waiting game almost over - but Bank needs to be bold to jump US
• 10 cheapest popular destinations in Europe - and how costs compare
• The top-paying savings account on the market right now
• Iconic tea brand enlists Top Boy star for £12m ad to revive fortunes - but poll suggests Britons prefer rival
• Cheap Eats : Chef at Tom Kerridge pub picks Buckinghamshire spot
• Listen to the Daily above and  tap here to follow wherever you get your podcasts

Looking for some longer Money reads for your evening/commute/lunch break?

Here's four from the last few months you might like...

Should you offer kids cash rewards for good grades? The psychologist's view

As exam season gets under way, some parents are putting hundreds of pounds aside to reward their children if they achieve certain grades. 

While some parents lambasted the idea as "absolute potatoes", others told Sky News they saw their children's focus increase after offering up to £250 for the top results.

We also spoke to teachers and a psychologist...

What can I do if flexible working request declined?

Every Monday we put your financial dilemmas or consumer disputes to industry experts. A few weeks ago Sky News reader AJ2024 asked...

"While on maternity leave my employer rejected my flexible work request and told me to pick from four new shift patterns or take redundancy if they didn't suit me. All new shifts were full working hours. No support as a new mother and ruined my last few precious weeks. What are my rights?"

We got an employment lawyer to answer...

'£2,000 landed in my account' - The people who say they're manifesting riches

Money blogger Jess Sharp spoke to people who swear they've made money from manifestation - before finding herself meditating under a tree to see if she could get in on the action...

The world of dark tourism - what is it, is it ethical, and where can you go?

Interest in a phenomenon known as "dark tourism" has been steadily rising in recent years - but what is it?

To find out, we spoke with tourism academic  Dr Hayley Stainton  and renowned dark tourist and author Dr Peter Hohenhaus, who runs a  dark tourism website ...

Fraud is "rife" on second hand marketplaces including Depop, Shpock and Preloved, according to a new survey by Which?.

The consumer magazine/website found that, of 1,300 buyers, 32% had been scammed on a second hand marketplace in the two years to January.

The most common ruse involved consumers receiving incorrect goods or nothing at all, while others were delivered an empty package or fake goods.

57% of those surveyed said they had experienced a scam on Depop.

This compares with 53% for Shpock and 51% for Preloved and Nextdoor. 

Amazon Marketplace came in at 35%, while for Gumtree and eBay the figures were both 29%. 

The number for Facebook and Vinted was 24% and 22%, respectively.

Rocio Concha, Which? director of policy and advocacy, said the survey’s findings were "worrying". 

"It's important that people properly check the seller's reviews and profile," she said, adding that marketplaces need to have proper checks in place and ensure that scam profiles are removed quickly.

Depop told the Guardian it offered protection for buyers and sellers and was investing in new technology. 

"We strongly encourage consumers who are buying and selling anywhere online never to share personal information with other users, to be very wary about following links to other sites, and to report any suspicious behaviour via in-app reporting systems."

Sky News has reached out to the other companies mentioned.

You may remember our coverage here a few weeks back on the proliferation of scams targeting Taylor Swift fans hoping to buy tickets to see one of her current run of shows across Europe...

The Shake It Off star will hold a series of concerts in the UK as she continues her Eras tour, with the first taking place in Edinburgh on 7 June.

But the artist's megastardom has seen a huge demand for tickets, which were not cheap even before they sold out within minutes - with prices ranging from £58.65 - £194.75.

Resale prices from legitimate websites have been in the region of £700 each - with some fans reported to have spent well in excess of that to see their hero.

However, such is her popularity among an army of mostly young female devotees that the market has become a target for people seeking to exploit the widespread desperation for tickets.

As reported here, a spate of attempts had seen Facebook users' accounts hacked by scammers, who would then create seemingly genuine posts in groups on the site that the users were members of.

Initially, the posts would suggest the user was seeking to sell tickets - generally four - that were invariably just a few rows from the front of a specific venue for one of Swift's UK shows.

The price suggested in the posts was generally around £180, more expensive than the face value of most tickets, but a fraction of the cost of those being advertised on legitimate resale sites - especially for such desirable seating.

More recent instances indicate the methods being employed by scammers have since evolved and, it appears, become significantly more sophisticated.

In these more recent attempts to defraud so-called Swifties (and in many cases, the parents purchasing the tickets), the posts detail the specific rows and seat numbers.

A further departure from the previous efforts is the scammers no longer including the asking price for the (non-existent) tickets.

Both these changes were evident in one attempt Sky News has become aware of - as was another and decidedly sinister tactic.

In this case, given the number of previous scams that have flooded Facebook, the admin for the group in question first removed the post - correctly assuming it was fraudulent.

But, he told Sky News, he was subsequently sent a photo of what appeared to be the user's passport as a means of verifying her post was genuine.

This development indicates the scammer in question had used some form of photo-editing software to create an image that appeared to be of the user's passport.

"I contacted her to explain that I had deleted her post and removed her account from the group as there are so many scams around, and I could not verify their identity or the validity of the ticket offer," said Trevor Williams, who runs the local community Facebook group in Birmingham.

"Within a few minutes, I received a photo of a passport in this name and an assurance that she was genuine.

"This was enough to change my decision and the post was put it back on the group.

"Most people have no idea of the problems of being an admin on these groups, as you simply cannot win."

How can you protect yourself against these scams?

For those looking to buy resale tickets, the main advice is to simply avoid being tempted into seemingly genuine offers posted on Facebook, unless it is from someone you know and have spoken to directly (and not just over Facebook).

Those looking to sell on their tickets will invariably use the established and legitimate resale sites such as Viagogo or StubHub.

Perhaps the most useful piece of advice is an old one - if it looks too good to be true, it probably is.

In terms of protecting yourself against your account on Facebook (or any social media site) being hacked by scammers, the best measure is to ensure you have enabled two-step or two-factor authentication.

This can be found through the security and privacy settings on your Facebook account, and involves the use of your telephone number or a separate authentication app on your phone whenever someone attempts to log in.

TV chef Gordon Ramsay has announced he will open new restaurants and a cooking academy in one of London's tallest skyscrapers. 

The 60th floor of 22 Bishopsgate will have a 14-seat chef's table experience - run by the team from the chef's three-Michelin-starred Chelsea restaurant, Restaurant Gordon Ramsay.

In addition, Lucky Cat restaurant, a Lucky Cat terrace bar and a Bread Street Kitchen will open on the 59th floor.

Finally, he'll be opening a cooking academy in the building, The Gordon Ramsay Academy. 

Mr Ramsay said: "This is more than just a new opening - it's a significant milestone for our business. 

"We're not only launching the highest culinary experiences in London, but also creating a vibrant culinary hub at the incredible 22 Bishopsgate."

City editor Mark Kleinman   has revealed that high street billionaire Mike Ashley is closing in on a deal to become the new British partner of struggling fashion chain Ted Baker.

He learnt that Frasers Group had emerged as the preferred partner for the chain following the collapse of No Ordinary Designer Label (NODL), Ted Baker's existing UK licensing partner.

It is hoped a deal could be agreed over the coming days - read more on this story here ...

Eating ultra-processed meat is linked to an increased risk of early death.

A Harvard study over 30 years tracked more than 114,000 adults.

The highest risks were linked with the most processed meats such as sausages and ham. 

Regular eaters had a 13% higher chance of dying over the 34 years tracked.

Diets high in sugary and artificially sweetened drinks had a 9% increased risk, the study found.

The used car market increased by 6.5% in the first quarter of the year , with sales of over 1.9 million vehicles, new figures show.

The Society of Motor Manufacturers and Traders (SMMT) says the total reveals the strongest start to a year since pre-pandemic 2019.

Sales of used hybrids also increased.

That's all from an enlightening news conference in which we heard an interest rate cut in June hadn't been ruled out - and that rates could fall more than markets expect. 

Scroll through to read and watch some of the key moments - meantime, we'll return to general money and consumer news.

We're now hearing the final questions of this news conference. 

The governor of the Bank of England is asked if August is more likely than June to see the Monetary Policy Committee cut interest rates. 

"Nice try to introduce the 'is it June' question again," Andrew Bailey says with a smile.

"We're going meeting by meeting," he adds, stressing that more data [which will be at the MPC's disposal over the coming months] will allow them more visibility and more scope to make a decision."

Our  economics editor Ed Conway  is next to ask the governor a question.

He asks whether increasing government interest in the Bank's workings has any influence on an interest rate cut.

"We [the Monetary Policy Committee] never discuss politics," Andrew Bailey replies. 

"We are an independent central bank, we have a remit and it is our duty to exercise that remit at all times."

"Our remit applies at all times, so it [politics] isn't a consideration."

Asked if inflation dynamics in the UK are different to the US, Andrew Bailey says there is no law that says the US moves first on interest rate cuts and everyone else afterwards.

"There is no law," he says.

"Moreover, we have a remit and target which is related to domestic inflation in the UK.

"We're an open economy so we take the rest of the world into consideration 

"But there is no law to say we can only move once the Federal Reserve (central bank of the US) moves."

There is a feeling among economists that, although the US often leads, the European Central Bank may be the first to move with an early June cut.

This could, it has been suggested, push the UK to cut on 20 June.

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Cerberus eyes private debt growth in India as shadow banks retreat

India is fast emerging as a big market for private credit activity, as global firms deploy billions, lured by the fastest-growing major economy.

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Bengaluru to experience zero shadow day today: what you need to know, vedanta resources to raise $1.25 bn through foreign investors at high rates, shadow lenders decline after rbi tightened norms for investments by banks, evergrande risking liquidation if creditors veto plan for handling debts, niif-backed shadow bank considers raising $100 mn with $600 mn valuation, cbdc pilot programmes for cps, cds likely: rbi governor shaktikanta das, short-term bond yields soften ahead of govt's buyback on thursday, govt adopted pro-poor approach in gst implementation: fm sitharaman, rbi provisioning norms singe psu banks, infrastructure financers, rbi to make digital currency available offline, says governor das.

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First Published: May 07 2024 | 7:13 AM IST

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