the bank business plan

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How to Write a Business Plan to Start a Bank

FEB.10, 2024

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 c omputers and software for banking functions; security systems to protect branches and ATMs; communication systems to communicate with customers and staff; i nventory and supplies to operate branches and ATMs.
• Suppliers and Vendors – We work with reliable suppliers and vendors that provide our inventory and supplies like cash, cards, paper, etc. We have supplier management systems to evaluate performance.
• Staff and Management – Our branches have staff like branch managers, customer service representatives, tellers, and ATM technicians with suitable qualifications and experience.
• Policies and Procedures – We have policies for customer service, cash handling, card handling, and paper handling to ensure quality, minimize losses, and comply with regulations. We use various tools and systems to implement these policies.

Management Team

The following individuals make up our management team:

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

Financial Projections

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

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

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

Our financial projections are as per our:

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

Select the Legal Framework for Your Bank

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

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

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

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

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

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

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

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

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

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

Keys to Success

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

Customer Satisfaction

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

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

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

Operational Efficiency

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

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

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

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

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

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

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

Frequently Asked Questions

How do I start a small bank business?

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

Are banks profitable businesses?

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

Download Bank Business Plan Sample in pdf

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Bank Business Plan Template

Written by Dave Lavinsky

Bank Business Plan

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

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

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

Download our Ultimate Business Plan Template here >

What Is a 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

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

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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 Successful Commercial Bank Business Plan (+ Template)

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

A well-crafted business plan not only 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 key elements that every commercial bank business owner should include in their business plan.

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What is a Commercial Bank Business Plan?

A commercial 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 key document that will convince investors and lenders (if needed) that you are positioned to become a successful venture.

Why Write a Commercial Bank Business Plan?

A commercial 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 Commercial Bank Business Plan

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

Executive Summary

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

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

Industry Analysis

The industry or market analysis is a crucial component of a commercial 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 commercial 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, commercial bank customers may include small businesses, startups, and entrepreneurs.

You can include information about how your customers decide to buy from you as well as 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 commercial 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 commercial bank business may have:

• Proven industry experience
• Extensive knowledge of the market
• Robust and innovative products and services
• Strong financial position
• Excellent customer service

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 commercial bank business via PR, by being quoted in the media, or by writing articles for industry publications.

Operations Plan

This part of your commercial 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?

The operations plan is where you also need to include your company’s business policies. 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 commercial bank business include reaching $X in sales. Other examples include adding new products, entering new markets, or expanding your distribution channels.

Management Team

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

Balance sheet.

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

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

Sample Balance Sheet for a Startup Commercial 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 cash flow from:

• Investments

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

Sample Cash Flow Statement for a Startup Commercial Bank Firm

Finally, you will also want to include an appendix section including:

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

Writing a good business plan gives you the advantage of being fully prepared to launch and grow your commercial 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 commercial bank, you can get started on putting together your own.  

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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.

HOW TO WRITE A BANK BUSINESS PLAN: Simple Steps & All You Need (+ Template)

• by Kenechukwu Muoghalu
• August 13, 2023
• No comments
• 6 minute read

Table of Contents Hide

What is a bank business plan, why do i need a bank business plan, #1. executive summary, #2. company overview, #3. customer analysis, #4. competitive analysis, #5. marketing plan, #6. operations plan, #7. management team, #8. financial plan, #9. appendix, bank business plan template, would you want to finish your bank’s business plan as quickly as possible, what is the easiest way to complete my bank business plan, how do banks make money, can an individual own a bank.

Opening a new bank is a cool investment that requires a stipulated level of attention and responsibilities for growth to take place. However, how can you start up a financial facility without a business plan? How do you intend to nurture the goals and growth of your bank business? Every investment needs a business plan and that is why this article has every little detail on what you need to know about this plan. You will also have access to a free template checklist and basic steps on how to write a bank business plan.

We also have a ready-made bank business plan for your comfort, just in case you wish to skip all procedures and get hold of your plan today. 

A bank business plan is a document that provides a snapshot of your bank and lays out its future growth plan. Not just that, it also explains your business goals and gives strategies that can help you attain them. It is more like a road map for success, and without the road map, you cannot get to your desired destination. 

It is also important to note that only a well-detailed and articulated bank business plan can achieve its potential purposes. Your bank’s business plan should also be updated annually to accommodate new changes in your business. 

The essence of a bank business plan can vary from one business owner to another. One can start up a business plan to attract investors or lenders to aid them in raising funds because, like other businesses, the banking industry also requires capital investment on a large scale to start its operations. 

Most of the time, you will need a bank business plan to map out the goals and growth of your bank and excessively improve your chances of success. You can also need a bank business plan for a combination of both reasons. A banking industry business plan plays an important role in the initiation and expansion of banks. Moreover, a business plan for banks is also required by the financial institutions. 

To write a winning bank business plan, you need to understand some basic steps on how to construct a comprehensive and well-detailed plan. Writing a plan comes with some procedures, and you can only yield results in your company when these procedures are followed. Let’s analyze what these procedures entail. 

Simple Steps on How to Write a Bank Business Plan

The executive summary of your bank’s business plan should be an introduction to your business. It is usually the first to appear on the plan but the last to write. This is because you will need some information from other sections. This section should be interesting to your readers. Don’t fail to explain the kind of bank you run, which can be either a startup or a chain of banks. 

Also one of the steps in how to write this section of your bank business plan is to include an overview of your competitors and your financial plan. 

There are different types of banks that one can invest in, and in your company overview, you will need to detail the type of bank you are operating. 

• Commercial Bank

A commercial bank is built to support both large corporations and small businesses. They can open a savings account, and lend money or trust funds to companies in foreign markets. 

• Retail Bank

Retail banks are normally traditional banks that customers can access online or in person. They also offer loans and insurance. 

• Investment Bank

This bank normally trades in stocks that are mostly between companies and investors. They can offer advice to individuals and corporations who need financial guidance. 

• Credit Union

Credit unions are basically like traditional banks, but they are different because they’re not profit-oriented. Regardless, they perform basic operations like loans and providing savings accounts. 

When you indicate the type of bank that suits you, then you will proceed to give a brief introduction of your company. Tell your readers why you started this business and the things you have achieved. 

This is where you include the details of the customers you will be offering your services to. Your customers might be individuals, small businesses, families, or big corporations. It is important to note that each customer will be following the type of bank you run. You will also need to research your customers and try to meet your target audience. 

This is where you need to mention your competitors which can be either direct or indirect. Direct competitors are other banks, and indirect competitors are other options that your potential customers can purchase from. It can be trust accounts, investment companies, or even the stock market. They are not directly competing with your products. 

You will need to list those competitors and give a brief description of their weaknesses and strengths. Then at the end of this section, you can provide how the services you offer are unique from your competitors.

As a financial facility, your marketing strategy should include your products, price, place, and promotions. In the product section, just talk about the type of bank you run, and state the prices of the products you offer as well. The place should be the location of your bank and how that site will impact your success. The promotion is meant to explain how you will attract potential customers to your company, which can be either an advertisement, websites, flyers, or social media platforms. 

The operation plan should explain how you intend to meet the goals of your business. It should cover both the short-term and long-term processes. You should include how you intend to reshape your company within that time frame. 

Just like the name implies, this section should be all about your strong management team. Highlight your key players by including their backgrounds, skills, and experiences that prove that they are capable enough to grow a company. It is a bonus if your management team has had direct experience in managing banks. If your team is lacking, you can consider assembling an advisory board. 

A financial plan should include your 5-year financial statement. It should also cover your income statement, balance sheet, and cash flow statements. An income statement should contain your profit and loss statement. A balance sheet will cover your assets and liabilities, while a cash flow statement will determine how much money you need to start and grow your business to avoid going bankrupt. 

In the appendix section, you can include any information that can make your bank business plan more compelling. You can attach your financial projections to a list of loans you plan to give. 

Having learned how to effectively write a bank business plan, you will also need to practice the use of a template. A bank business plan template is essential when starting a bank business. It is with this template checklist that you will understand the full processes that are involved with starting a bank business. So, before you proceed with your investment, you need to keep these steps in check.

• Know the business 
• Write a business plan
• Raise Capital
• Choose a business name
• Get a license 
• Attract customers 

Don’t you wish there was an easier way to finish your bank’s business plan? Understandably, creating a business plan can be overwhelming, but there is a way around it. At BusinessYield Consult, we specialize in creating business plans for entrepreneurs like you. 

That is why we have composed a unique, ready-made bank business plan for your comfort. Now you won’t have to spend hours trying to get over a section of your business plan. 

All you need to do is to grab a copy of your bank business plan now! 

A business plan is essential in every company, whether a big or small business. It tends to bring some changes into every business and also helps you manage that business effectively. Although sometimes creating one for yourself might be a bit daunting, when you follow the steps above, you can come up with a successful bank business plan that will boost the growth of your company.

If you need an easier way to complete your business plan without having to go through the long process of writing one yourself, then you can try our ready-made bank business plan . 

Banks mainly make money by borrowing money from depositors and then compensating them with an interest rate. Then that same bank will lend the money to borrowers and charge them a high-interest rate. It is from that profit that their profit comes.

Yes. There is a possibility of individual ownership but most times individuals commonly buy shares of bank stock which can be directly from the bank or fund managers. 

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Kenechukwu Muoghalu

Kenny, an accomplished business writer with a decade of experience, excels in translating intricate industry insights into engaging articles. Her passion revolves around distilling the latest trends, offering actionable advice, and nurturing a comprehensive understanding of the business landscape. With a proven track record of delivering insightful content, Kenny is dedicated to empowering her readers with the knowledge needed to thrive in the dynamic and ever-evolving world of business.

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SUPPORTED LIVING BUSINESS PLAN: Template And How to Write One

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Bank Business Plan [Sample Template]

By: Author Tony Martins Ajaero

Home » Business ideas » Financial Service Industry » Bank

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

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

Why Start a Bank?

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

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

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

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

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

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

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

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

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

A Sample Bank Business Plan Template

1. industry overview.

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

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

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

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

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

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

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

2. Executive Summary

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

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

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

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

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

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

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

3. Our Products and Services

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

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

4. Our Mission and Vision Statement

• Our vision at AIB LLC is to develop into a large scale investment bank that will provide underwriting income, advisory income, dividend income, capital appreciation, and interest income to investors.
• Our mission at AIB LLC is to ensure that investment decisions are implemented quickly and efficiently across all portfolios, to also make sure a trading research and rotation is used to avoid any type of systematic advantage or disadvantage an account may experience.

Our Business Structure

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

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

We also understand the role of the board and management as investors and how important they are. Regulators and other investors will look to the investment of these directors and senior officers as an important sign of their commitment to the bank.

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

Managing director

• Senior vice president

Vice president

Investment Banking Associate

Investment Banking Analyst

• Marketing manager
• Security man

5. Job Roles and Responsibilities

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

Senior Vice president

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

Sales and Marketing director

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

Security guard

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

6. SWOT Analysis

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

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

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

According to our SWOT analysis, our strength at AIB LLC rests on the expertise and experience of our management team. With the experience and discipline of our team, our SWOT analysis predict we can build a robust company profile even before bidding for investment banking contracts from corporate organizations.

As the investment banking industry expands and grows in revenue and market reach, so does the level of competition in the industry. Due to the very low barriers to entry, any individual or business may register itself as an investment bank after completing the proper examinations and filings.

• Opportunities

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

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

According to our SWOT analysis, the risks we will be facing include;

• Market Risk – A high correlation exists between the growth rate of the investment industry and the performance of equity markets. While evidence suggests an attractive environment for equities in the future, no forecasts can be made with absolute certainty.
• Performance Risk – It is understood that our products are measured by their performance. Although the goal is to achieve competitive performance over three to five-year time periods, short-term periods may result in underperformance based on the critical measures.
• Business/Operating Risk – Beyond the third full year of operation, assets under management must produce revenues that will be sufficient to support operations in their entirety. Otherwise our options will be to acquire additional funding or to reduce costs.

7. MARKET ANALYSIS

• Market Trend

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

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

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

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

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

8. Our Target Market

Our target market at AIB LLC will be greatly dependent on the phase of our product in its development cycle. Have it in mind that most of the marketing opportunities will happen beyond the first year of product development. But we remain very certain that some initial opportunities do exist.

For instance, our bank can utilize its transfer agent’s distribution services, which would put the product in a highly visible online platform. Note that extra opportunities include marketing to programs that invest specifically in “emerging managers.”

We at AIB LLC also believe that the high net worth and retail marketplace can be accessed to a limited degree, even in the early stages, through similar innovative opportunities and already-established relationships with clients. Just like manufacturing organizations, investment businesses are expected to develop products to provide to their customers.

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

Our competitive advantage

Our Competitive Advantage at AIB LLC is specified in the three P’s commonly associated with investment firms: People, Process, and Performance. The first two determine the latter. Although our business plan highlights many areas (market research, financial projections, etc.), we believe there are two areas that will surely determine the level of success achieved by AIB LLC.

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

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

9. SALES AND MARKETING STRATEGY

We at AIB LLC understand that the key to marketing an investment product is to create a successful and attractive product, develop a pattern of success, and show that pattern can be repeated in the future. After that, successful products should be aggressively marketed if capacity to manage additional assets exists.

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

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

Sources of Income

We believe that our primary income at AIB LLC will come from providing our clients with investment packages, securities underwriting and advisory services in regards to mergers and acquisitions. AIB LLC will earn substantial fees for the equity and debt instruments that it underwrites and then resells to the general public.

We also believe that we will engage primarily in debt instruments among middle market companies that will be sold on a best efforts basis. This will place minimal risk on our capital reserve.

We will also earn substantial per hour management and deal fees regarding advisory services for mergers and acquisition operations. We also plan to make investments directly into marketable securities and hedge funds that specialize in specific areas of trading.

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

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

10. Sales Forecast

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

This forces us to look beyond short-term noise in quarter-to-quarter results and focus on the big picture, such as our management’s vision for the future and their probability of executing their plan.

11. Publicity and Advertising Strategy

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

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

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

12. Our Pricing Strategy

Firms in this industry get funds from investors who are interested in investing, and charge them for assisting them in investing their funds over a period of time as agreed by both parties. Even though investment banking is a very risky venture, it is still profitable, hence there is an agreement between the investment bank and the client as it relates to the commission they are expected to make from the deal.

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

• Payment options

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

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

13. Startup Expenditure (Budget)

We have noted that banks are expected raise their initial capital from investors after completing regulatory processes before they can open. In the industry, all insured banks must comply with the capital adequacy guidelines of their primary federal regulator.

The guidelines require a bank to demonstrate that it will have enough capital to support its risk profile, operations, and future growth even in the event of unexpected losses.

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

Successful capital generation in these amounts is generally the result of a well formulated and executed plan for developing local and other investors in the bank. We have analyzed our needs and we plan to spend our startup funds judiciously. Outlined below is a detailed financial projection and costing for starting AIB LLC;

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

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

• Generating Startup Capital for AIB LLC

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

Our founders plan to become the very first financiers of the business, although we have plans of selling shares and stocks as the business matures. Due to less constraint in financing, we have outlined the few ways we can acknowledge funding. These ways may include;

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

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

14. Sustainability and Expansion Strategy

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

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

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

We also believe that a word of note is also warranted as it relates to the cash flow statement of our bank. Have it in mind that one appealing feature of the investment industry is that collection of fees (i.e. revenues) is highly certain because fees are frequently charged directly to the client’s accounts (or to the mutual fund).

That is the more reason why revenue certainty is very high and is directly related to the amount of assets under management.

Also note that common practice in the investment industry is to bill at each quarter-end. For instance, our annual fee of 1% would be applied to our clients’ accounts five times per year at 0.20%. We at AIB LLC can strongly attest to the fact that economic motivation is great.

Growth rates for the investment industry are projected to range from 25% to 24% in each of the next three years. We believe that the demographic, economic, political and social evidence supporting these projections make this industry one of the most attractive industries due to the high degree of certainty in the estimates.

We at AIB LLC believe that the certainty coupled with the above average growth rate differentiates this opportunity from other venture investments. Also have it in mind that our conservative estimates outline a plan-to-profitability over a period much shorter than typical venture investments that sometimes need up to ten years to make profits.

Check List/Milestone

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

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

By alex ryzhkov, resources on commercial banking.

• Financial Model
• Business Plan
• Value Proposition
• One-Page Business Plan

Welcome to our blog post on how to write a business plan for commercial banking in 9 steps! As the financial industry continues to evolve, it is important for commercial banks to adapt and stay competitive. In this blog post, we will guide you through the key steps to creating a comprehensive business plan that will enable your bank to thrive in today's market.

Before we dive into the steps, let's take a moment to explore the current state of the commercial banking industry in the US. According to recent statistics, the sector has experienced steady growth over the past few years, with total assets reaching [statistical information about industry growth] .

Now, let's move on to the first step in writing a business plan for commercial banking: conducting market research. This crucial step involves gaining a deep understanding of the current market trends, customer preferences, and potential opportunities for growth. By thoroughly researching the market landscape, you will be better equipped to identify your target market and customer segments.

Once you have identified your target market, it's time to analyze your competitors and industry trends. This step will help you understand the competitive landscape and allow you to position your bank effectively.

Next, you need to define your business objectives and goals. This step will provide clarity on what you want to achieve and will guide the rest of your business plan.

After defining your objectives, conducting a SWOT analysis is crucial. This analysis will help you identify your bank's strengths, weaknesses, opportunities, and threats, allowing you to develop strategies to capitalize on strengths and address weaknesses.

To ensure the financial feasibility and viability of your business plan, you must determine the financial aspects of your bank. This includes assessing your projected revenue, expenses, and profitability.

Identifying the resources and skills required to execute your business plan is another critical step. Knowing what you need in terms of infrastructure, technology, and human resources will help you plan and allocate resources effectively.

Developing a strong marketing strategy is essential to attract and retain customers. This step involves creating a comprehensive plan to promote your bank's products and services and differentiate yourself from competitors.

Lastly, establishing a timeline and milestones will enable you to track your progress and ensure that you are on track to achieve your goals. This step provides a roadmap for implementation and helps you stay focused on executing your business plan.

By following these nine steps, you will be well-equipped to create a thorough and effective business plan for commercial banking. Stay tuned as we dive deeper into each step in our upcoming blog posts!

Conduct Market Research

Market research is a crucial step in the process of writing a business plan for commercial banking. It allows you to gather essential information about the market and industry in which you plan to operate. By conducting thorough market research, you can identify key trends, understand customer needs and preferences, and gain insights into your competitors' strategies.

Here are some important steps to consider when conducting market research:

• Identify the target market and customer segments: Determine the specific group of customers you want to serve and understand their characteristics, preferences, and behaviors. This will help you tailor your banking services to meet their needs.
• Analyze competitors and industry trends: Study your competitors to understand their strengths, weaknesses, and strategies. Identify any emerging trends or changes in the industry that may impact your business. This knowledge will help you position your bank effectively.
• Explore customer needs and pain points: Conduct surveys, interviews, or focus groups to gather insights into what customers want and what problems they are facing. This will allow you to develop products and services that address their needs.
• Stay updated with regulatory requirements: Understand the legal and regulatory framework in the banking industry. Ensure that your business plan aligns with the necessary compliance standards.

Market Research Tips:

• Use a combination of primary and secondary research methods: Primary research includes direct interaction with customers through surveys or interviews, while secondary research involves analyzing existing data and reports.
• Seek professional assistance if needed: If you are new to market research or lack the necessary expertise, consider hiring a market research firm or consultant to help you gather and analyze the data.
• Continuously update your market research: Market trends and customer preferences can change rapidly. Regularly revisit your market research to ensure you stay ahead of the curve and remain responsive to customer needs.

Identify Target Market And Customer Segments

Identifying your target market and customer segments is a crucial step in developing a successful business plan for commercial banking. It involves clearly understanding the needs and preferences of your potential customers and tailoring your products and services to meet those needs. Here are some key points to consider when identifying your target market and customer segments:

• Demographics: Start by examining the demographic characteristics of your potential customers, such as age, gender, income level, and location. This information will help you create targeted marketing campaigns and determine the best ways to reach your target market.
• Industry-specific needs: Depending on the nature of your business, you may want to focus on specific industries or sectors that are more likely to require commercial banking services. Analyze the needs and challenges faced by these industries and tailor your offerings accordingly.
• Behavior patterns: Understanding the behavior patterns of your target market can provide valuable insights into their preferences and decision-making processes. Consider factors such as their banking habits, preferences for digital or in-person banking, and likelihood to use additional services like investment advice.
• Unique selling proposition: Identify what sets your commercial banking services apart from competitors and how it aligns with the needs of your target market. Highlighting your unique selling proposition will help you attract and retain customers in a competitive market.
• Conduct surveys or interviews with potential customers to gain insights into their banking preferences and expectations.
• Segment your target market into more specific groups based on their characteristics and needs. This will allow you to tailor your messaging and offerings more effectively.
• Regularly monitor market trends and changes in customer preferences to ensure you stay relevant and adaptable in an evolving commercial banking industry.

By identifying your target market and customer segments, you can refine your business strategy and develop products and services that meet their specific needs. This customer-centric approach will increase the likelihood of attracting and retaining loyal customers, driving the growth and success of your commercial banking business.

Analyze Competitors And Industry Trends

Conducting a thorough analysis of competitors and industry trends is crucial for developing a successful business plan for commercial banking. This step will provide valuable insights into the current market landscape, competition, and potential opportunities. Here are key aspects to consider when conducting this analysis:

• Identify key competitors: Research and identify the main players in the commercial banking industry. This includes both traditional banks and online banking platforms. Analyze their market share, product offerings, customer base, and financial performance.
• Assess competitive advantage: Determine what sets your bank apart from competitors. This could be innovative technology, exceptional customer service, or specialized financial products. Understanding your competitive advantage is crucial for attracting and retaining customers.
• Analyze industry trends: Stay up-to-date with the latest industry trends and developments. This includes changes in customer preferences, advancements in technology, regulatory updates, and emerging market opportunities. Adapt your business plan to align with these trends to stay competitive.
• Examine customer satisfaction: Investigate customer satisfaction levels with current banking services. Look for areas where competitors may be falling short and strive to excel in those aspects. Providing a superior customer experience can be a significant competitive advantage.

Tips for Analyzing Competitors and Industry Trends:

• Consider conducting surveys or focus groups to gather feedback from potential customers about their banking needs and preferences.
• Stay updated on industry publications, reports, and conferences to stay informed about emerging trends.
• Monitor social media channels and online forums to gain insights into customer opinions and experiences with competitors.
• Regularly review competitor websites and promotional materials to understand their marketing strategies and product offerings.

Define Business Objectives And Goals

Defining clear and specific business objectives and goals is essential for any commercial banking venture. These objectives serve as a guidepost, helping you stay focused and aligned with your overall vision. Here are a few key steps to help you establish your business objectives and goals:

• Identify your mission: Define the purpose and mission of your commercial banking venture. What value do you aim to provide to your customers and the industry as a whole?
• Set measurable goals: Determine the specific outcomes you want to achieve and ensure they are measurable. This could include targets for loan portfolio growth, deposit growth, customer acquisition, or profitability.
• Consider market trends: Take into account current market trends and customer demands while setting your goals. Stay informed about industry developments and anticipate future shifts that could impact your business.
• Align with customer needs: Ensure that your objectives and goals align with the needs and preferences of your target market. Consider conducting market research or engaging with potential customers to better understand their requirements.
• Be realistic: While it's important to set ambitious goals, it's equally crucial to be realistic. Consider the financial and operational resources available to you and set achievable targets accordingly.
• Stay adaptable: As the banking industry continues to evolve, it's crucial to have flexibility in your objectives and goals. Be open to adjusting and refining them as market conditions change.

Additional Tips:

• Involve key stakeholders, such as senior management and relevant team members, in the process of defining business objectives and goals. This ensures buy-in and a shared vision.
• Regularly review and evaluate your progress towards achieving your objectives. This will allow you to make necessary adjustments and measure your success along the way.
• Communicate your objectives and goals internally to align your entire organization around a common purpose. This fosters a sense of unity and clarity among your employees.

By clearly defining your business objectives and goals, you can create a roadmap for success in the competitive landscape of commercial banking. This step sets the stage for the subsequent development of strategies and tactics to achieve your desired outcomes.

Conduct a SWOT Analysis

Performing a SWOT analysis is a crucial step in developing a comprehensive business plan for commercial banking. SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. This analysis helps you gain a deeper understanding of your bank's internal strengths and weaknesses, as well as external opportunities and threats in the market.

Strengths: Begin by identifying the unique strengths of your bank. These could be factors such as a strong customer base, a well-established brand, a diverse portfolio of services, or a talented team. By recognizing these strengths, you can leverage them to gain a competitive advantage in the market.

Weaknesses: Acknowledge the areas where your bank may be falling short. These could include limited branch network, outdated technology, or a lack of expertise in certain financial areas. Pinpointing weaknesses allows you to develop strategies to improve upon them and address any potential vulnerabilities.

Opportunities: Assess the external factors that could present new opportunities for your bank. Are there emerging markets or segments that you can tap into? Are there any regulatory changes that could benefit your banking operations? Identifying opportunities enables you to position your bank proactively and capitalize on favorable conditions.

Threats: Evaluate the potential threats that your bank may face in the market. Consider factors such as increasing competition, economic uncertainty, changing consumer preferences, or regulatory hurdles. Understanding these threats helps you devise contingency plans and adapt your strategies accordingly.

Tips for Conducting a SWOT Analysis:

• Foster open and honest discussions among your team to gain diverse perspectives.
• Research and analyze market trends, industry reports, and customer feedback to gather relevant data for your analysis.
• Focus on actionable insights rather than vague observations.
• Regularly revisit and update your SWOT analysis to stay aligned with changing market dynamics.

A SWOT analysis serves as a valuable tool for business planning in commercial banking. It helps you identify areas for improvement, capitalize on opportunities, and mitigate potential risks. By conducting a thorough SWOT analysis, you can develop a sound strategy that positions your bank for long-term success in the ever-evolving banking industry.

Determine The Financial Feasibility And Viability

One of the most crucial steps in developing a business plan for commercial banking is determining the financial feasibility and viability of your venture. This step involves evaluating the potential profitability and sustainability of your business model.

The following are key factors to consider when determining the financial feasibility and viability of your commercial banking business:

• Market demand: Evaluate the demand for banking services in your target market. Are there enough potential customers to sustain your business?
• Competition: Analyze the competitive landscape. Understand the strengths and weaknesses of your competitors and identify ways to differentiate your bank.
• Profitability: Assess the potential profitability of your banking model. Calculate the projected revenue from lending activities, fees, and other revenue streams. Consider the associated costs, such as overhead expenses and regulatory compliance.
• Risk assessment: Identify and analyze the potential risks associated with your banking business. This includes credit risk, interest rate risk, operational risk, and regulatory risk. Develop risk mitigation strategies to minimize those risks.
• Capital requirements: Determine the amount of capital needed to start and operate your commercial bank. Consider the initial investments required for technology infrastructure, talent acquisition, and marketing efforts.
• Financial projections: Develop detailed financial projections, including income statements, balance sheets, and cash flow statements. These projections should cover at least the first three to five years of your business.
• Consult with financial experts and industry professionals to ensure accurate evaluation of financial feasibility.
• Stay updated with the latest industry trends and regulatory changes that may impact the financial viability of your venture.
• Consider creating different financial scenarios to assess the potential outcomes under various market conditions and risk scenarios.

Determining the financial feasibility and viability of your commercial banking business is essential for attracting investors, securing loans, and making informed strategic decisions. By carefully evaluating the market demand, competition, profitability, risks, capital requirements, and financial projections, you can build a solid case for the success of your business venture.

Identify Resources and Skills Required

Identifying the resources and skills required for your commercial banking business plan is crucial for ensuring its success. By understanding the specific resources and skills needed, you can adequately prepare and allocate the necessary assets to drive your business forward.

To identify the resources required for your commercial banking venture, consider the following:

• Financial Capital: Determine the amount of capital required to commence operations and sustain the business in the initial phase. This includes calculating the funds needed to secure office space, hire employees, invest in technology and security systems, and cover other operational expenses.
• Human Capital: Assess the skills and expertise required to run a commercial banking business. This includes hiring professionals with experience in lending, credit analysis, risk management, customer service, compliance, and other relevant areas. Additionally, consider the number of employees needed to handle the projected workload and ensure efficient operations.
• Technological Infrastructure: Identify the necessary technology and systems required for your banking operations. This may include secure servers, online banking platforms, customer relationship management (CRM) software, and other tools that enable efficient and secure banking transactions.
• Legal and Regulatory Compliance: Ensure that you have a thorough understanding of the legal and regulatory requirements applicable to the commercial banking industry. This includes obtaining appropriate licenses and permits, complying with anti-money laundering regulations, and adhering to consumer protection laws.
• Consider outsourcing certain functions, such as IT support or marketing, to experienced third-party service providers. This can help reduce costs and enhance efficiency.
• Stay updated with industry trends and advancements in technology to ensure that your banking operations remain competitive and relevant.
• Invest in continuous training and development programs to enable your employees to stay abreast of the latest banking practices and regulations.

By identifying the necessary resources and skills, you can effectively plan and allocate your business's resources to enhance its viability and success in the commercial banking industry. Remember, a well-prepared and properly allocated resource plan is vital for achieving your business objectives and serving your customers effectively.

Develop A Marketing Strategy

Once you have conducted market research, identified your target market and customer segments, analyzed competitors and industry trends, defined your business objectives and goals, and conducted a SWOT analysis, it is time to develop a marketing strategy. This will be crucial in attracting and retaining customers, as well as creating brand awareness and positioning your bank in the market.

Here are some important steps to consider when developing your marketing strategy:

• 1. Identify your Unique Selling Proposition (USP): Determine what sets your bank apart from competitors and highlight your unique features and benefits. This will help you differentiate and position your bank in the market.
• 2. Define your target audience: Now that you have identified your target market and customer segments, it is important to create buyer personas to understand their characteristics, needs, and preferences. This will allow you to tailor your marketing efforts and messages accordingly.
• 3. Set marketing objectives: Determine specific and measurable objectives for your marketing efforts. Examples could include increasing customer acquisition, boosting brand awareness, or promoting specific financial products or services.
• 4. Choose marketing channels: Consider which marketing channels will be most effective in reaching your target audience. Traditional channels like television, radio, and print advertisements may still be relevant, but also explore digital channels such as social media, email marketing, content marketing, and search engine optimization (SEO).
• 5. Craft compelling messages and offers: Develop compelling messaging that communicates your USP and resonates with your target audience. Create offers or promotions that incentivize potential customers to choose your bank over competitors.
• Ensure your marketing messages align with your bank's brand identity and values.
• Regularly analyze and adapt your marketing strategy based on performance metrics and customer feedback.
• Consider utilizing partnerships or collaborations with other businesses or organizations to expand your reach.

By developing a well-thought-out marketing strategy, you can effectively communicate your bank's value proposition and attract customers in a competitive market. It is an ongoing process that requires continuous monitoring and adaptation to stay relevant and successful.

Establish A Timeline And Milestones

Once you have defined your business objectives and goals in your business plan, it is crucial to establish a timeline and milestones to track your progress. This will not only keep you organized but also help you stay motivated and ensure that you are making measurable progress towards your goals. Here are some important steps to consider when establishing a timeline and milestones for your commercial banking business:

• Break down your objectives into achievable milestones: Start by breaking down your long-term objectives into smaller, more manageable milestones. This will make your goals seem less daunting and allow you to measure your progress more effectively. For example, if your objective is to acquire a certain number of customers within a year, you can set quarterly milestones to track your customer acquisition progress.
• Set realistic deadlines: It is important to set realistic deadlines for each milestone based on your market research, analysis of competitors, and available resources. Avoid setting overly ambitious deadlines that may put undue pressure on you and your team. Instead, create a timeline that gives you a realistic timeframe to complete each milestone while considering any potential challenges or obstacles you may encounter along the way.
• Assign responsibilities and roles: Clearly define responsibilities and roles for each milestone to ensure that everyone on your team is aware of their tasks and accountabilities. This will help streamline the execution of your business plan and minimize any confusion or potential delays that may arise from overlapping responsibilities.
• Monitor and track progress: Regularly monitor and track your progress against the established timeline and milestones. This will allow you to identify any delays or deviations from the original plan and take appropriate actions to address them. Consider setting up key performance indicators (KPIs) or metrics to measure the success of each milestone and keep a record of your achievements and challenges along the way.
• Stay flexible and adaptable: While it is important to stick to your timeline and milestones, it is equally important to remain flexible and adaptable in the face of unexpected developments or changing market conditions. Be prepared to adjust your timeline or revise your milestones if necessary to stay aligned with your overall business objectives.
• Use project management tools or software to help you visualize and manage your timeline and milestones effectively.
• Regularly communicate with your team to ensure everyone is aware of the progress and any changes in the timeline or milestones.
• Celebrate your achievements when you reach a milestone to boost morale and motivation among your team members.

In conclusion, writing a business plan for commercial banking involves several important steps that will guide your strategy and help you navigate the competitive landscape. By conducting thorough market research, identifying target markets and segments, and analyzing competitors and industry trends, you can develop a solid foundation for your business. Additionally, defining clear business objectives, conducting a SWOT analysis, and determining the financial feasibility and viability of your plan are crucial for success. It is also important to identify the necessary resources and skills, develop a marketing strategy, and establish a timeline and milestones to track your progress.

With a well-structured and comprehensive business plan, you can demonstrate your understanding of the industry, set achievable goals, and attract the necessary funding and support. Remember that the commercial banking industry may be evolving with the rise of online platforms, but the core principles of deposit and lending remain the foundation of success. By following these steps and adapting to the changing landscape, you can position your commercial banking business for long-term growth and profitability. Good luck!

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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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How to write an effective business plan in 11 steps (with workbook)

February 02, 2023 | 14 minute read

Writing a business plan is a powerful way to position your small business for success as you set out to meet your goals. Research suggests that business founders who write one are 16% more likely to build businesses that are viable than those who don’t, and that entrepreneurs focused on high growth are 7% more likely to have written a business plan. HBR. July 14, 2017. Available online at https://hbr.org/2017/07/research-writing-a-business-plan-makes-your-startup-more-likely-to-succeed" data-footnote="sevenpercent" aria-label="Footnote 1" data-options="{"interstitialType":"leaving-site","targetAction":"new-tab"}" class="spa-ui-layer-link spa-fn spa-ui-layer-interstitial"> Footnote [1] Even better, other research shows that owners who complete business plans are twice as likely to grow their business successfully or obtain capital compared to those who don’t. J Grad Med Educ. 2014 Mar;6(1):15-7. doi: 10.4300/JGME-D-13-00081.1. PMID: 24701304; PMCID: PMC3963774. Available online at: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3963774/" data-footnote="twiceaslikely" aria-label="Footnote 2" data-options="{"interstitialType":"leaving-site","targetAction":"new-tab"}" class="spa-ui-layer-link spa-fn spa-ui-layer-interstitial"> Footnote [2]

The best time to write a business plan is typically after you have vetted and researched your business idea. (See: How to start a business in 15 steps .) If conditions change later, you can rewrite the plan, much like how your GPS reroutes you if there is traffic ahead. When you update your plan regularly, everyone on your team, including outside stakeholders such as investors, will know where you are headed.

What is a business plan?

Typically 15-20 pages long, a business plan is a document that explains what your business does, what you want to achieve in the business and the strategy you plan to use to get there. It details the opportunities you are going after, what resources you will need to achieve your goals and how you will define success.

Why are business plans important?

Business plans help you think through barriers and discover opportunities you may have recognized subconsciously but have not yet articulated. A business plan can also help you to attract potential lenders, investors and partners by providing them with evidence that your business has all of the ingredients necessary for success.

What questions should a business plan answer?

Your business plan should explain how your business will grow and succeed. A great plan will provide detailed answers to questions that a banker or investor will have before putting money into the business, such as:

• What products/services do you provide?
• Who is your target customer?
• What are the benefits of your product and service for customers?
• How much will you charge?
• What is the size of the market?
• What are your marketing plans?
• How much competition does the business face in penetrating that market?
• How much experience does the management team have in running businesses like it?
• How do you plan to measure success?
• What do you expect the business’s revenue, costs and profit to be for the first few years?
• How much will it cost to achieve the goals stated in the business plan?
• What is the long-term growth potential of the business? Is the business scalable?
• How will you enable investors to reap the rewards of backing the business? Do you plan to sell the business to a bigger company eventually or take it public as your “exit strategy”?

How to write a business plan in 11 steps

This step-by-step outline will make it easier to write an effective business plan, even if you’re managing the day-to-day demands of starting a new business. Creating a table of contents that lists key sections of the plan, with page numbers, will make it easy for readers to flip to the sections that interest them most.

Use our editable workbook to capture notes and organize your thoughts as you review these critical steps. Note: To avoid losing your work, please remember to save this PDF to your desktop before you begin.

1. Executive summary

The executive summary is your opportunity to make a great first impression on investors and bankers. It should be just as engaging as the enthusiastic elevator pitch you might give if you bumped into a potential backer in an elevator.

In three to five paragraphs, you’ll want to explain what your business does, why it will succeed and where it will be in five years. The executive summary should include short descriptions of the following:

• Business concept: What will your business do?
• Goals and vision: What do you expect the business to achieve, both financially and for other key stakeholders, such as the community?
• Product or service: What does your product or service do — and how is it different from those of competitors?
• Target market: Who do you expect to buy your product or service?
• Marketing strategy: How will you tell people about your product or service?
• Current revenue and profits: If your business is pre-revenue, offer sales projections.
• Projected revenue and profits: Provide a realistic look at the next year, as well as the next three years, ideally.
• Financial resources needed: How much money do you need to borrow or raise to fund your plan?
• Management team: Who are the company’s leaders and what relevant experience will they contribute?

2. Business overview

Here is where you provide a brief history of the business and describe the product(s) or service(s) it offers. Make sure you describe the problem you are attempting to solve, for whom you will solve it (your customers) and how you will solve it. Be sure to describe your business model (such as direct-to-consumer sales through an online store) so readers can envision how you will make sales. Also mention your business structure (such as a sole proprietorship, general partnership, limited partnership or corporation) and why it is advantageous for the business. And be sure to provide context on the state of your industry and where your business will fit into it.

3. Business goals and vision

Explain what you hope to achieve in the business (your vision), as well as its mission and value proposition. Most founders judge success by the size to which they grow the business, using measures such as revenue or number of employees. Your goals may not be solely financial. You may also wish to provide jobs or solve a societal problem. If that’s the case, mention those goals as well.

If you are seeking outside funding, explain why you need the money, how you will put it to work to grow the business and how you expect to achieve the goals you have set for the business. Also explain your exit strategy—that is, how you will enable investors to cash out, whether that means selling the business or taking it public.

4. Management and organization

Many investors say they bet on the team behind a business more than the business idea, trusting that talented and experienced people will be capable of bringing sound business concepts to life. With that in mind, make sure to provide short bios of the key members of your management team (including yourself) that emphasize the relevant experience each individual brings, along with their special talents and industry recognition. Many business plans include headshots of the management team with the bios.

Also describe more about how your organization will be structured. Your company may be a sole proprietorship, a limited liability company (LLC) or a corporation in one or more states.

If you will need to hire people for specific roles, this is the place to mention those plans. And if you will rely on outside consultants for certain roles — such as an outsourced CFO — be sure to make a note of it here. Outside backers want to know if you’ve anticipated the staffing you need.

5. Service or product line

A business will only succeed if it sells something people want or need to buy. As you describe the products or services you will offer, make sure to explain what benefits they will provide to your target customers, how they will differ from competing offerings and what the buying cycle will likely be, so it is clear that you can actually sell what you are offering. If you have plans to protect your intellectual property through a copyright or patent filing, be sure to mention that. Also explain any research and development work that is underway, to show investors the potential for additional revenue streams.

6. Market/industry analysis

Anyone interested in providing financial backing to your business will want to know how big your company can potentially grow, so they have an idea of what kind of returns they can expect. In this section, you’ll be able to convey that by explaining to whom you will be selling and how much opportunity there is to reach them. Key details to include are market size; a strengths, weaknesses, opportunities and threats (SWOT) analysis ; a competitive analysis; and customer segmentation. Make it clear how you developed any projections you’ve made by citing interviews or research.

Also describe the current state of the industry. Where is there room for improvement? Are most companies using antiquated processes and technology? If your business is a local one, what is the market in your area like? Do most of the restaurants where you plan to open your café serve mediocre food? What will you do better?

In this section, also list competitors, including their names, websites and social media handles. Describe each source of competition and how your business will address it.

7. Sales and marketing

Explain how you will spread the word to potential customers about what you sell. Will you be using paid online search advertising, social media promotions, traditional direct mail, print advertising in local publications, sponsorship of a local radio or TV show, your own YouTube content or some other method entirely? List all of the methods you will use.

Make sure readers know exactly what the path to a sale will be and why that approach will resonate with customers in your ideal target markets, as well as existing customer segments. If you have already begun using the methods you’ve outlined, include data on the results so readers know whether they have been effective.

8. Financials

In a new business, you may not have any past financial data or financial statements to include, but that doesn’t mean you have nothing to share. Preparing a budget and financial plan will help show investors or bankers that you have developed a clear understanding of the financial aspects of running your business. (The U.S. Small Business Administration (SBA) has prepared a budget template you can use; SCORE , a nonprofit organization that partners with the SBA, offers a financial planning template to help you look ahead.) For an existing business, you will want to include income statements, profit and loss statements, cash flow statements and balance sheets, ideally going back three years.

Make a list of the specific steps you plan to take to achieve the financial results you have outlined. The steps are generally the most detailed for the first year, given that you may need to revise your plan later as you gather feedback from the marketplace.

Include interactive spreadsheets that contain a detailed financial analysis showing how much it costs your business to produce the goods and services you provide, the profits you will generate, any planned investments and the taxes you will pay. See our Startup costs calculator to get started.

9. Financial projections

Creating a detailed sales forecast can help you get outside backers excited about supporting you. A sales forecast is typically a table or simple line graph that shows the projected sales of the company over time, usually for the next 12 months and as much as five years into the future. If you haven’t yet launched the company, turn to your market research to develop estimates. For more information, see “ How to create a sales forecast for your small business .”

10. Funding request

If you are seeking outside financing such as a loan or equity investment, your potential backers will want to know how much money you need and how you will spend it. Describe the amount you are trying to raise, how you arrived at that number and what type of funding you are seeking (such as debt, equity or a combination of both). If you are contributing some of your own funds, it is worth noting this, as it shows that you have “skin in the game.”

11. Appendix

This should include any information and supporting documents that will help investors and bankers gain a greater understanding of the potential of your business. Depending on your industry, you might include local permits, licenses, deeds and other legal documents; professional certifications and licenses; media clips; information on patents and other intellectual property; key customer contracts and purchase orders; and other relevant documents.

Some business owners find it helpful to develop a list of key concepts, such as the names of the company’s products and industry terms. This can be helpful if you do business in an industry that may not be familiar to the readers of the business plan.

Tips for creating an effective business plan

Use clear, simple language. It’ll be easier to win people over if your plan is easy to read. Steer clear of industry jargon, and if you must use any phrases the average adult won’t know, be sure to define them.

Emphasize what makes your business unique. Investors and bankers want to know how you will solve a problem or gap in the marketplace differently from anyone else. Make sure you’re conveying your differentiating factors.

Nail the details. An ideal business plan will be detailed and accurate. Make sure that any financial projections you make are realistic and grounded in solid market research. (If you need help in making your calculations, you can get free advice at SCORE.) Seasoned bankers and investors will quickly spot numbers that are overly optimistic.

Take time to polish it. Your final version of the plan should be neat and professional, with an attractive layout and copy that has been carefully proofread.

Include professional photos. High-quality shots of your product or place of business can help make it clear why your business stands out.

Updating an existing business plan

Some business owners in rapidly growing businesses update their business plan quarterly. Others do so every six months or every year. When you update your plan make sure you consider these three things:

1. Are your goals still current? As you’ve tested your concept, your goals may have changed. The plan should reflect this.

2. Have you revised any strategies in response to feedback from the marketplace? You may have found that your offerings resonated with a different customer segment than you expected or that your advertising plan didn’t work and you need to try a different approach. Given that investors will want to see a marketing and advertising plan that works, keeping this section current will ensure you are always ready to meet with one who shows interest.

3. Have your staffing needs changed? If you set ambitious goals, you may need help from team members or outside consultants you did not anticipate when you first started the business. Take stock now so you can plan accordingly.

Final thoughts

Most business owners don’t follow their business plans exactly. But writing one will get you off to a much better start than simply opening your doors and hoping for the best, and it will be easier to analyze any aspects of your business that aren’t working later so you can course-correct. Ultimately, it may be one of the best investments you can make in the future of your business.

Business plan FAQs

The biggest mistake you can make when writing a business plan is creating one before the idea has been properly researched and tested. Not every idea is meant to become a business. Other common mistakes include:

• Not describing your management team in a way that is appealing to investors. Simply cutting and pasting someone’s professional bio into the management section won’t do the trick. You’ll want to highlight the credentials of each team member in a way that is relevant to this business.
• Failing to include financial projections — or including overly optimistic ones. Investors look at a lot of business plans and can tell quickly whether your numbers are accurate or pie in the sky. Have a good small business accountant review your numbers to make sure they are realistic.
• Lack of a clear exit strategy for investors. Investors will want to “cash out” eventually and will want to know how they can go about doing that.
• Slapdash presentation. Make sure to fact-check any industry statistics you cite, and that any charts, graphs or images are carefully prepared and easy to read.

There are a variety of styles of business plans styles. Here are three major types:

Traditional business plan. This is a formal document for pitching to investors based on the outline in this article. If your business is a complicated one, the plan may exceed the typical length and stretch to as many as 50 pages.

One-page business plan. This is a simplified version of a formal business plan, designed to fit on one page. Typically, each section will be described in bullet points or in a chart format, rather than in the narrative style of an executive summary. It can be helpful as a summary document to give to investors — or for internal use. Another variation on the one-page theme is the “ business model canvas .”

Lean plan. This methodology for creating a business plan is ideal for a business that is evolving quickly. It is designed in a way that makes it easy to update on a regular basis. Lean business plans are usually about one page long. The SBA has provided an example of what this type of plan includes on its website.

Many elements of a business plan for a nonprofit are similar to those of a for-profit business. However, because the goal of a nonprofit is achieving its mission — rather than turning a profit—the business plan should emphasize its specific goals on that front and how it will achieve them. Many nonprofits set key performance indicators (KPIs) — numbers that they track to show they are “moving the needle” on their goals.

Nonprofits will generally emphasize their fundraising strategies in their business plans, rather than sales strategies. The funds they raise are the lifeblood of the programs they run.

A strategic plan is different from the type of business plan you’ve read about here in that it emphasizes the long-term goals of the business and how your business will achieve them over the long run. A strong business plan can function as both a business plan and a strategic plan.

A marketing plan is different from a business plan in that it is focused on four main areas of the business: product (what you are selling and how you will differentiate it), price (how much your products or services will cost and why), promotion (how you will get your ideal customer to notice and buy what you are selling) and place (where you will sell your products). A thorough business plan may cover these topics, doing double duty as both a business plan and a marketing plan.

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How to Write a Business Plan Banks Can't Resist Here's what your business plan needs if you want startup capital from a bank.

By The Staff of Entrepreneur Media, Inc. • Nov 13, 2014

In the book, Write Your Business Plan , the staff of Entrepreneur Media offer an in-depth understanding of what's essential to any business plan, what's appropriate for your venture and what it takes to ensure success. In this edited excerpt, the authors discuss the ABCs of getting a bank loan for your business.

Many of the most successful businesses are financed by banks, which can provide small to moderate amounts of capital at market costs. They don't want control—at least beyond the control exerted in the covenants of a loan document. And they don't want ownership. Bankers make loans, not investments, and as a general rule, they don't want to wind up owning your company.

Bankers primarily provide debt financing. You take out a loan and pay it back, perhaps in installments consisting of principal and interest, perhaps in payments of interest only, followed by a balloon payment of the principal. One of the nice things about debt financing is that the entrepreneur doesn't have to give up ownership of his company to get it.

Bankers can usually be counted on to want minimal, if any, input into how the business is run. Get behind on the payment schedule, however, and you're likely to find a host of covenants buried in your loan documentation. Loan covenants may require you to do all sorts of things, from setting a minimum amount of working capital you must maintain to prohibiting you from making certain purchases or signing leases without bank approval. Be sure to have your accountant, financial advisor or attorney review your loan documents and spell out everything for you very carefully before you sign.

A banker's first concern is getting the bank's money back plus a reasonable return. To increase their odds, bankers look for certain things, including everything from a solid explanation of why you need the money and what you're going to use it for to details about other borrowing or leasing deals you've entered into.

Bank loan applications can be almost as long and complete as a full-fledged business plan. Plans and loan applications aren't interchangeable, however. A banker may not be interested in your rosy projections of future growth. In fact, when confronted with the kind of growth projection required to interest a venture capitalist, a banker may be turned off. On the other hand, a banker is likely to be quite interested in seeing a contingency plan that will let you pay back the loan, even in the event of a worst-case scenario.

The five things a banker will look for you to address are:

1. Cash flow. One of the most convincing things you can show a banker is the existence of a strong, well-documented flow of cash that will be more than adequate to repay a loan's scheduled principal and interest. You'll need more than a projection of future cash flow, by the way. Most bankers will want to see cash flow statements as well as balance sheets and income statements for the past three or so years. And don't forget your tax returns for the same period.

2. Collateral. If you're just starting out in business or dealing with a banker you don't know well, you're unlikely to be able to borrow from a bank without collateral. Collateral is just something the bank can seize and sell to get back some or all of the money you've borrowed in the event that everything goes wrong and you can't pay it back with profits from operations. It may consist of machinery, equipment, inventory or, all too often, the equity you own in your home.

Why do bankers seek collateral? They have no desire to own second-hand equipment or your house. Experience has taught them that entrepreneurs who have their own assets at risk are more likely to stick to a business than those who have none of their own assets at risk.

3. Co-signers. They provide an added layer of protection for lenders. If your own capacity for taking on additional debt is shaky, a co-signer (who's essentially lending you their creditworthiness) may make the difference.

4. Marketing plans. More than ever before, bankers are taking a closer look at the marketing plans embedded in business plans. Strong competitors, price wars, me-too products, the fickle habits of the buying public and other market-related risks must be addressed. Your banker (and most other investors) have to know that you recognize these risks and have well-thought-out ways to deal with them. Besides, it's the cash flow from operations that pays off bank loans.

5. Management. Bankers like to stress the personal aspect of their services. Many state that they're interested in making loans based on a borrower's character as well as their financial strength. In fact, the borrower's track record and management ability are concerns for bankers evaluating a loan application. If you can show you've run one or more other companies successfully, it will increase your chances of landing a loan to get a startup going.

Bank financing is most appropriate for up-and-running enterprises that can show adequate cash flow and collateral to service and secure the loan. Bankers are less likely to provide startup money to turn a concept into a business, and they're even less likely to put up seed money to prove a concept unless you have a track record of launching previous businesses with successful results.

The old saying about bankers lending only to people who don't need to borrow is almost true. Bankers prefer to lend to companies that are almost, but not quite, financially robust enough to pursue their objective without the loan. Their natural tendency is to be conservative.

This is important to understand because it affects how and when you will borrow. You should try to foresee times you'll need to borrow money and arrange a line of credit or other loan before you need it. That will make it easier and, in many cases, cheaper in terms of interest rates than if you wait until you're a needier and, in bankers' eyes, less-attractive borrower.

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How to Create a Fruitful Bank Business Plan- Free PDF Included

Tamana Gupta

 A bank is a type of financial institution that accepts deposits and extracts money from customers' accounts. The banking industry, like other businesses, needed a large capital expenditure to get off the ground.

A business plan for the banking sector is essential for starting and growing banks. Financial institutions need a business plan for banks because their regulations are based on similar ones. So, it should be designed to grab the interest of lenders, stakeholders, and investors.

Business plans for the banking sector must include clear and attainable goals for the future, marketing strategies, timeliness, ways to use the investments and information about the organization. For the company to achieve its objectives, it must project the estimations of the commercial operations that have been planned during the previous three fiscal years and evaluate their viability.

Guidelines for Writing a Business Plan for the Banking Sector

Prepare a thorough banking business plan by going through all the relevant topics in depth. Provide the reasons for starting the firm and the goals that demonstrate the entrepreneur's skill and pique the interest of venture capitalists. Before creating a business plan for the banking industry, there are a few questions that should be adequately addressed. As follows:

What kind of market do you have, and where?

What is the likely range of your industrial expansion?

Who are your intended customers?

What types of regulations will you put in place to lure consumers?

How will you carry out your carefully thought-out policies and take the appropriate measures in response?

So, here are a few of the essential slides that you must incorporate into your business plan to make it stand out.

# Detailed overview of the bank

This slide is to portray organization details including name, incorporation date, web address, start-up investment, services, etc. It also covers the quick pitch and goals and objectives of the bank. 

The company overview is part of your business plan that gives the basics and background of your business. It's the foundation on which you will build the rest of your business plan. You need the reader to be well-informed about your business to entice investors or future customers.

This slide is 100% editable, so download it right now.

Download this Template Now

# Market gap and opportunity of a banking firm

The purpose of this slide is to highlight the market gap and focus on devising solutions to overcome those challenges. It also helps to identify unexplored areas that other businesses in the same space are not serving currently. 

A market gap is an area where there is a need from customers but where businesses do not already fill the void.  A market gap opportunity is a chance to create and offer something currently unavailable. 

So, highlight the market gap along with its solution in the slide to give a glimpse to the investor.

# Description of products and services offered by the bank

This slide is to express the benefits the bank provides to its customers or clients. It includes individual, business, and digital banking services in addition to all kinds of loan services.

Your business plan's section on products and services helps the reader understand why you're in business, what you sell, how you compete with existing options, or how you fill a market gap that no one else is filling.

So, highlight the different services your bank is offering to you.

# Choosing an ideal business location for the bank

This slide portrays an ideal business location for the bank that minimizes the risk of failure. It covers gathering and analyzing data in order to select the optimal location in terms of feasibility, economy, and future sustainability.

Choosing an apt location for your business not only helps you in retaining employees but also makes you more accessible in attracting target customers. 

So, highlight the few things you are considering while choosing the location to make the users of the business plan aware.

# Major restraints hampering growth in the banking industry

The idea behind this slide is to guide stakeholders about the problems prevailing in the industry. It covers various challenges such as technology, meaningful experience, and sustainability. 

However, highlighting the major restraints in a business plan will make you understand the clear-cut challenges that they have to overcome.

# Evaluating client journey through a sales funnel

This slide highlights customer journey mapping to track users' actions and key touch points across levels such as awareness, conversion, loyalty, and retention. It enables organizations to see how well each step of the sales process is working.

A sales funnel is a word used in marketing, to sum up and define the path taken by potential clients from prospecting to purchase.

# Understanding the bank’s operational framework to ensure success

The purpose of this slide is to outline the key objectives and goals of an organization and how to reach them by crafting an operational plan. It keeps teams on track while guiding them in making crucial decisions about the banks’ long-term strategy.

In this slide, you can highlight the 1-YEAR plan, 3-YEAR plan, and 5-YEAR onwards plan to achieve the goals and objectives. 

# Deploying an efficient organizational structure for smooth operations

The purpose of this slide is to craft a successful hierarchical framework for the bank to ensure smooth operations. It includes personal bankers, cashiers, clerks, technical supervisors, etc.

An organizational structure is a system that defines how specific tasks are directed in order to fulfill the goals of an organization.

So, highlight the organizational chart in the slide to make it clear to the audience, how the pattern is being followed in the organization.

# Job roles and responsibilities of each department (contd.)

This slide aims to highlight key job roles and responsibilities of the bank staff to ensure effectiveness and efficiency in the operations. It also helps in avoiding duplication of work. Job responsibilities refer to the duties and tasks of their particular roles.

Companies that identify roles and responsibilities can streamline their hiring processes. It may encourage their employees to perform better and pay closer attention at work. It also helps enhance operational efficiency by removing confusion and redundancy.

# Possible exit options for stakeholders

This bank business plan slide represents exit strategy for stakeholders such as IPO, Mergers, Acquisitions, Private offerings, and Venture Capital. It gives a business owner a way to reduce or liquidate their stake in a business and make a substantial profit if the business is successful.

An exit option is a clause in a business plan or project that enables a corporation to abandon the venture with only minor financial repercussions.

So download this ready-to-use PowerPoint presentation and edit the text as per your requirement.

Wrapping up

You can get all the information you need to understand the market, the industry, and both at once for the bank business plan in this PowerPoint. 

At SlideTeam, a group of researchers and designers work together on projects to create material that satisfies customer requirements. You alter our business plan ppt  to suit a person's unique professional needs.

What is the purpose of a business plan for a bank?

A business plan outlines your growth strategy for the next five years and gives a current picture of your bank. It outlines your company's objectives and your plans for achieving them. Market research is also included to help you with your plans.

Which three business models do banks typically use?

A commercial bank with retail funding, a commercial bank with wholesale funding, and a bank focused on the capital markets are the three business models we identify. While the third type stands out principally due to banks' growing involvement in trading activities, the first two models differ primarily in how banks choose to fund their operations.

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• [Updated 2023] How to Design The Perfect Product Launch Presentation [Best Templates Included]
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Business plans for bank & sba loans, when it comes to bank and small business administration (sba) loans for startups and acquisitions, a business plan is the cornerstone of your funding eligibility..

Strategize. Secure. Succeed.

Unlocking business potential with sba-backed loans, bank & sba loans offer a powerful springboard for budding entrepreneurs and established businesses to launch and grow ventures. .

Starting a business journey is a monumental step, and the right financial backing can make all the difference . Securing a business loan, especially one guaranteed by the Small Business Administration (SBA), comes with its set of stringent standards . Central to these requirements is the necessity of a comprehensive business plan . At Masterplans, we recognize the significance of this document and the rigorous standards it must adhere to, ensuring your business is set on a path to success .

“ I’m out there trying to find real estate and sign leases and hire management teams. I don’t have time to write the business plan myself.

Masterplans presented me with an expert piece of work that displayed everything i'm trying to accomplish in the next five years.”.

Travis Grappo Owner/Operator, Oak House

Why Business Owners Trust Masterplans

With 18,000+ business plans crafted across diverse industries, here's why savvy entrepreneurs consistently choose to partner with us when they seek bank funding..

Experience & Expertise

For over two decades, Masterplans has had the privilege of turning the dreams of founders into reality by crafting business plans ready for both traditional bank lending and the SBA loan application process. 

Award-Winning Excellence

Our reputation as an award-winning firm is built on our unwavering commitment to quality and customer satisfaction. We take immense pride in the feedback from lenders who consider our business plans the best they've ever seen.

Proven Track Record

Our approach is grounded in enterprise-level research and analysis from pay-to-access platforms like IBISWorld, Esri, and Statista, ensuring your plan is a tool to obtain business financing and a practical roadmap to achieve your goals.

cutting through the red tape

Navigate the intricacies of the commercial loan process with confidence, we turn complexity into clarity, saving you time and headaches..

The banking landscape, with its maze of requirements, can be overwhelming and intimidating, especially for those venturing into the SBA loan process for the first time.

With Masterplans by your side, you're not navigating this terrain alone. You benefit from two decades of experience to ensure that you are prepared for your loan interview. Our understanding of the nuances of underwriting eliminates potential headaches, saving you invaluable time, and providing you with a clear path to loan approval.

Download Sample Business Plans ›

Key Sections a Bank & SBA Business Plan

Your business plan is structured so loan officers and underwriters can easily find what they need, while ensuring a cohesive, consistent, and comprehensive overview of your venture..

Executive Summary

You never get a second chance to make a great first impression. An Executive Summary provides a concise yet compelling snapshot of your venture , ensuring lenders immediately grasp its potential and viability. Integral to this is clearly stating your startup costs and the specific reasons why. The Executive Summary should stand on its own, but more than that, it should leave the banker wanting to learn more.

Company Overview

This company description provides a comprehensive overview of your business, highlighting its unique business model, products and services, and competitive advantage. It underscores your business's unique value proposition , its position within the market, and, critically, details of the sources and uses of funds during the startup, expansion, or acquisition phase.

Market Analysis

To secure a bank loan, your business plan must demonstrate deep understanding of your local market and offer a thorough industry analysis to gauge your projections within that context . Masterplans employs industry-leading market research tools , such as Statista, IBISWorld, and Esri's Business Analyst, to ensure that you grasp the broader industry trends as well as the dynamics of your specific target market.

Strategy & Implementation

The "Strategy & Implementation Summary" provides a detailed roadmap of pragmatic steps and tactics essential for reaching your business goals. Included is a synopsis of your marketing plan, meticulously crafted to convey how your business will attract your target customer .

Management Team

At the heart of a business's potential to service a loan is the capability of the business owner and managers. By spotlighting the hands-on professional experience and industry knowledge that prepares them to run and manage the business effectively, Masterplans ensures that a potential lender will have confidence in the leadership's ability to drive consistent performance.

Financial Projections

Masterplans builds a custom five-year financial projection, which includes an income statement, cash flow statement , and balance sheets that are grounded in solid assumptions and drivers. This approach ensures bankers see a realistic and reliable revenue projection , ensuring key metrics like the Debt Service Coverage Ratio (DSCR) are met.

“It was obvious that everyone who worked on the business plan put in a lot of effort and took pride in what they did.

It read so fluidly. every page led into the next, and it was easy for the bank to find the information they needed.”.

Peter Schellinger Owner/Operator, Diversified Land Management

Make SBA Lenders Compete for you

We put you in the driver’s seat, rather than being just another loan applicant, transform yourself into a sought-after client, making banks compete for your business..

A bank-ready business plan from Masterplans not only showcases your company's potential, but also outlines potential risks and offers strategies to address them , reassuring lenders of your proactive approach.

Our team of business plan writers provide small business owners with the leverage to attract multiple lenders, ensuring you get the best possible terms. With Masterplans, you're not just obtaining a loan; collaborating with us means delving into strategic planning that not only secures loan terms to set you up for success, but also ensures you're fully prepared to capitalize on it .

Our Latest Bank-Ready Business Plans

For over 21 years, we've been privileged to collaborate with clients spanning every industry. below are just a few of the 18,000+ business plan projects we've worked on..

Team Member Spotlight

Christina hersey, with over a decade of experience as a business plan writer, christina helps clients understand and exceed the stringent requirements of banks and the sba..

Christina's clients frequently commend her uncanny ability to "get into their head," a talent she seamlessly integrates into her role as Team Lead. She's fluent in English, Greek, and Spanish. Her dedication to excellence ensures that every business plan is not only compliant but also compelling, positioning entrepreneurs for success.

Meet The Team ›

Business plans for sba & bank loans faqs,  we've compiled a list of frequently asked questions to provide clarity on our service and process. if you don't find the answer to your specific question here, please don't hesitate to contact us ., how is the cost of a business plan for bank and sba loans determined.

Our pricing is influenced by several factors including industry type, plan length and scope, variables like multiple physical locations, the intended audience, and your timeframe.

Our bank-ready business plans typically range from $1,800 to $5,100, based on complexity and the team members required. This fee covers an in-depth discovery process, detailed research, professional writing and editing, and advanced financial modeling. We are happy to provide a complete scope of work for your project, free of charge, in as little as 24 hours. Simply contact us to set up an appointment.

For more information about what is included in our engagements, please see our pricing page .

How many pages is an bank-ready business plan?

The ideal length of a bank/SBA-loan business plan is precisely as long as it needs to be, and not a page more. While most bank-ready business plans fall within the 30-45 page range, with around 15 pages dedicated to financial statements, it's essential to remember that quality isn't determined by page count. Evaluating a business plan's merit based solely on its length misses the true value and depth of its content. 

You can see some examples of our bank-ready business plans here .

How long will my business plan project take?

Our projects kick off within 24 hours of receiving payment. From there, the timeline largely depends on your pace and preferences. Some clients prefer a more deliberate and procedural approach, while others are working against tight deadlines. Typically, we can deliver a complete first draft of the business plan within two weeks. We offer both 45-day and 90-day engagement timelines, ensuring ample time to integrate your feedback and steer the direction of the project.

You can learn more about our process and timeline here.

Do you guarantee funding, or accept payment after funding?

Our primary goal is to provide a top-notch business plan that positions clients in the best light for lenders. There are too many other factors involved for us to guarantee funding. We do, however, guarantee that if your bank loan is turned down on the basis of the business plan, we will refund your money in full. (Note: In over 20 years of business plan writing, this has never happened. Not once.)

As far as payments go, all terms are discussed upfront, and payment after funding is not a typical arrangement.

Will you help find funding?

While we specialize in crafting bank-ready business plans, we are not a certified SBA loan broker, which means we don't facilitate the SBA loan application process directly in exchange for a fee. However, over our 21-year tenure, we've fostered relationships with both regional and national banks. As a result, we are often able to make introductions where appropriate.

For those specifically interested in SBA loans, many clients find success working with preferred SBA lenders in your local market. We recommend using the SBA's Lender Match tool to find suitable lenders. You can access this resource at SBA Lender Match .

What experience do I need for an SBA loan?

Experience is a crucial factor when it comes to securing a loan for your business. Most lenders, including those offering SBA-backed loans, require applicants to have a certain level of experience in the industry or business they intend to operate; for example, the SBA typically requires a small business owner to have a minimum of five years of relevant experience. This experience can be in a management or operational role within the industry. If you lack direct industry experience but have other strong qualifications, such as a solid track record in a management or supervisory role in another field, you may still be considered for a loan.

The aim of this requirement is to ensure that you have the necessary expertise to manage and grow a successful enterprise. Lenders view this experience as a strong indicator of your ability to repay the loan and operate a viable business.

For more details on what's required for an SBA-backed loan, you can refer to our comprehensive guide on SBA loans .

Will a bank or the SBA fully-fund my business?

In many instances, SBA loans necessitate collateral as a form of security for the lender. Most SBA loans will require a down payment of 20%, and having assets that can be used as collateral can enhance your loan application. Additionally, demonstrating a personal investment in your business showcases commitment and responsibility, further augmenting your eligibility.

How important is my credit score when presenting my business plan to lenders or investors?

Your credit score plays a pivotal role when seeking financing, especially from traditional lenders like banks. It serves as a numerical summary of your financial reliability based on your past borrowing and repayment behaviors.

Most banks have minimum credit score requirements, often setting a threshold at or above 600. It's common for lenders to have a benchmark of 620. A higher score not only increases your likelihood of securing financing but can also secure more favorable terms for the loan.

Can a bank business plan be used to find an investor?

Generally, the expectations and objectives of investors differ from those of bank lenders. Banks tend to prioritize funding small businesses that foster local job creation, adopting a naturally conservative approach. In contrast, investors typically search for ventures with potential for rapid scaling and significant earnings, inherently embracing greater risk.

However, there are unique scenarios, especially when real estate plays a role , where an investor might be included in the capital stack. In such instances, we are well-equipped and eager to assist in presenting these cases effectively.

Do you use a standard "business plan template" or an "SBA business plan template" when developing plans for clients?

Every business is distinct, and consequently, every business plan we develop is uniquely tailored to that enterprise. While we don't rely on a specific "business plan template" or "SBA business plan template," our vast experience allows us to craft plans with efficiency. By building on our accumulated knowledge, we ensure both customization and efficiency in our deliverables.

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Leverage over two decades of experience by scheduling a free , no-obligation, 30-minute consultation with  one of our business plan experts..

The Latest from the Masterplans Blog

Are you looking for quick tips and advice on business planning and entrepreneurship.

Our latest blog posts offer valuable insights that cover a range of essential topics – from the art of refining a business idea and how to write business plans for banks, to the qualifications and requirements of SBA lending.

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More From Forbes

How To Start Writing A Business Plan That Works

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For the entrepreneur, knowing how to start writing a business plan can be as exhilarating as it is overwhelming. The business plan is a foundational document and the blueprint of your business and is critical for securing funding, setting clear goals, and communicating your vision to the world.

Let’s explore the significance of a business plan, the essential elements it should include, and strategies to forge a plan that resonates with stakeholders and steers your business toward success.

Whether you are about to launch your first business or need to revitalize an existing business strategy, a business plan provides the foundation that supports your entrepreneurial journey.

Why a Business Plan Is Needed

A business plan is not solely for the benefit of a bank manager or an investor . The business plan is a document that helps bring clarity to your vision and can guide every decision and strategy within your company.

A well written business plan forces you to put your goals and ideas into concrete, manageable steps. It cuts through the noise, ensuring you stay focused on what truly matters for your business’s growth.

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For startups looking to secure that critical initial investment, a business plan is often the first point of reference for potential backers. It’s a chance to sell your vision, show your financial acumen, and demonstrate a roadmap to profit.

Identifying potential pitfalls early is a vital aspect of proactive business ownership. A good business plan helps you prepare for the unexpected and develop strategies to mitigate risk and safeguard the longevity of your business.

Setting clear, measurable goals in your business plan provides a framework for tracking your progress. This will give you the insight needed to pivot or double down on strategies as the market dictates.

Creating Your Story

Before you start drafting sections and compiling data, step back and consider the story of your business. Your plan should be like a good book, with a clear narrative arc that compels the reader from the first sentence to the last.

Any good story is rooted in an understanding of the world it inhabits. Your business's narrative begins with a comprehensive analysis of the industry in which you operate, as well as the consumers you aim to serve.

Think about how you define your unique selling proposition (USP) . What sets your business apart from competitors? All good stories have a unique twist, and your business plan should articulate what makes your venture different from, and better than, the competition.

Introduce your team into the story. Highlight their expertise, experience, and any relevant achievements that lend credibility to the business’s ability to execute on its vision.

Writing Your Business Plan Is Just the Beginning

A business plan can span from a quick roadmap sketched on the back of a napkin to a hefty document carefully crafted to align with industry standards. Regardless of size, it should contain certain fundamental elements .

The act of writing a business plan, while pivotal, is just the first step in an ongoing process of refinement and execution.

Here’s how to make sure your business plan is a living document:

1. Regular reviews and updates

Markets shift, consumer behavior changes, and your business will grow. Your plan must evolve with these factors, which makes regular reviews and updates a must-do.

2. Be realistic

It’s essential to be both ambitious and realistic in your plan. Don’t over-inflate projections or underestimate costs. An unrealistic plan is as unattractive to investors as a lack of vision and ambition.

3. Seek professional input

Don’t be afraid to ask for help. Experienced business advisors, accountants, and mentors can provide invaluable feedback and spot issues you may have missed.

4. Start small

Your first draft doesn’t have to be perfect. Write down your initial thoughts, outline your ideas, and refine them over time. Starting with a large plan can be intimidating but working on it gradually can be a more manageable and effective approach.

The bottom line is that writing a business plan can feel overwhelming, but with the right approach and attention to detail, you can create a document that not only articulates your vision but actively works to make that vision a reality. It’s a living, breathing narrative that outlines your business’s course of action, and should be treated with care and enthusiasm.

Melissa Houston, CPA is the author of Cash Confident: An Entrepreneur’s Guide to Creating a Profitable Business . She is the founder of She Means Profit, which is a podcast and blog . As a Finance Strategist for small business owners, Melissa helps successful business owners increase their profit margins so that they keep more money in their pocket and increase their net worth.

The opinions expressed in this article are not intended to replace any professional or expert accounting and/or tax advice whatsoever.

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How to Write an SBA Business Plan + Template

Noah Parsons

10 min. read

Updated November 21, 2023

Applying for a Small Business Administration loan typically requires a business plan.

Unfortunately, there’s no SBA loan business plan format that guarantees approval. The SBA even states you should “pick a business plan format that works for you.” 

While I agree with this sentiment, I’ve found that entrepreneurs who explain how funds will be used and how they will repay the loan tend to be more successful. 

Luckily, these details can be covered using our SBA-lender-approved business plan format . I’ll go over that structure in this article, and focus on the sections that the SBA prioritizes, so you can maximize your chances of getting funded .

You can even download a free SBA-lender-approved business plan template to fill out as you read. 

Let’s get started.

• Why you need a business plan for SBA loans

SBA loans require good documentation of your business and personal finances. You’ll need to pull together your past tax returns, bank statements, and various application forms depending on the type of SBA loan you apply for.

The bank issuing the loan will also want to know about the future of your business. 

They’ll want to see how the loan will be used and if future cash flow projections are realistic and indicate you can afford loan payments.

That’s where writing an SBA business plan comes in. 

Not only will your business plan describe your business to the lender, but it will include the financial projections the bank will use to determine if you qualify for the loan .

• What your business plan should include, according to the SBA

Business plans for SBA loans follow a fairly standard structure, but that doesn’t mean you need to follow it exactly. 

The SBA even recommends adjusting the plan outline to serve your needs. If a section does not apply to your business, it’s fine just to remove it.

Here’s the successful business plan structure I recommend for SBA loans:

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1. Executive summary

A great executive summary is a short, simple overview of your business. It should be easy for a loan officer to read and clearly understand what your business does. 

When applying for an SBA loan, highlight your: 

• Business opportunity
• Financial forecast
• How much money you want to borrow and how it will be used

Remember, an executive summary should be short and to the point. The rest of your business plan will provide additional details.

[Dig deeper: How to write an executive summary ]

2. Company description

Some people call this section “Products and Services.” Either option is fine. The important thing is that you use this section to explain what your business opportunity is. 

You need to cover: 

• The problem you solve
• Who you’re solving it for
• What your solution is and why it’s better

Be specific and tell the story of your business and your customers. Focus on your strengths and what sets you apart from competitors. 

If your company is developing a product, include information on:

• What the product life cycle looks like
• Intellectual property filings
• Current research and development

If these topics don’t apply to your product, that’s fine. Just be sure that the description of what you sell is clear.

3. Market analysis

The market analysis chapter explains who your customers are. It provides an overview of your target market, competition, and industry.

Your target market is essentially a description of your ideal customers. Be sure to include specific demographic information (like age, gender, location, income) and psychographic information (hobbies, purchasing behaviors). 

This data should reinforce that your target market needs your solution .

It’s helpful to also include information on the size of your target market . Lenders will want to see evidence of enough potential customers to drive growth. 

While your target market information describes your customers, an industry overview discusses the type of business you’re in and its potential for growth. 

For example: If you’re starting a fast-casual restaurant, your industry overview might discuss the increased interest in fast-casual dining and how more people are eating in these types of restaurants every year. 

Finally, you’ll need to include a competitive analysis . This is a list of current competitors and alternatives, with explanations of why your business is a better option. 

Your goal is to show how your business is unique, what opportunities and threats there are, and how you plan to address the competition.

4. Organization and management

Also known as your company overview, this section is where you describe your legal structure, history, and team .

For your SBA loan application, you should focus on describing who is managing the business as clearly as possible. 

You may want to include an organizational chart. You should provide detailed resumes for everyone in leadership positions. Each team member’s experience, skills and professional qualifications can mitigate risk in the eyes of a lender .

To show you’re thinking ahead, it’s also helpful to include key positions you plan to fill as you grow. 

5. Sales and marketing plan

Your goal in this section is to summarize how you will attract, retain, and sell to your customers.

The marketing strategies and sales methods you describe should always have the customer top of mind, and demonstrate that you know how to connect with them. 

To help a loan officer visualize this, you can provide examples of marketing messaging, visuals, and promotions. If you have any research or results to show that your strategy has merit, include those as well. 

6. Financial projections

SBA lenders typically require 5 years of financial projections — including profit and loss statements , balance sheets , and cash flow statements . 

Be sure to include the SBA loan in your projections in the following areas: 

• A liability on your balance sheet.
• Payments on your cash flow.
• Interest expenses on your profit and loss statement. 

I’ll dive into specific details of what you should focus on in the “how to improve your chances” section.

Your first year of financial projections should include monthly details. After that, annual summaries are usually sufficient for most SBA lenders. Occasionally, a lender might require 24 months of monthly projections, so check with your bank before submitting your business plan. 

If your business is up and running, you must also provide historical financial reports for the past 12-24 months of operations—including income statements and a current balance sheet.

Typically, you will also need to provide reports on your personal finances , including any assets you have, such as a home or car. 

Finally, include a section explaining your use of funds—what exactly you plan to use the loan for.

7. Appendix

The appendix is your chance to provide additional documents that support sections of your business plan. 

When applying for a loan, these may include:

• Employee resumes
• Licenses and permits
• Patents and other legal documents
• Historical financial statements
• Credit histories

Don’t worry about stuffing your appendix full of additional documentation. Only include information if you believe it will strengthen your approval chances, or if your lender specifically asks for it.

• How to improve your chances of being approved for an SBA loan

Your SBA business plan needs to focus on the loan you are applying for and how that will impact your business financially. 

Make sure to include the following information in your financial plan to increase your chances of success with your lender:

Funding request 

In your executive summary, document how much money you are asking for. It’s best to put your number where it can be clearly read, instead of trying to bury it deep within your business plan.

Remember, there are limitations to how much you can borrow through SBA-backed loans.  Most have a maximum loan amount of $5 million, while SBA Express loans have a maximum loan amount of $350,000. 

Use of funds

You should also describe how you plan to use the loan and which aspects of the business you want to invest in. 

Some SBA loans are designed specifically for expanding export businesses or funding real estate transactions. So, make sure your use of funds description is appropriate for the loan you are applying for.

Cash flow forecast

Be sure to include the loan in your cash flow statements and projections . You want to demonstrate that you’ve planned how you will use and repay the loan.

You need to show:

• When you anticipate receiving the loan.
• How the loan will impact your finances. 
• Loan payments for the life of the loan. 

Having this prepared won’t just increase the chances of your application being approved—It  will make it much easier to manage the loan after you receive funding . 

Balance sheet 

You’ll also want to put the loan on your projected balance sheet , and show how the loan will get paid down over time. 

The money you owe will show up on your balance sheet as a liability, while the cash you receive from the loan will be an asset. Over time, your forecasted balance sheet will show that the loan is getting paid back. 

Your lender will want to see that you have forecasted this repayment properly.

Profit & Loss forecast

Your P&L should include the interest expenses for the loan, and show how the interest will impact your profitability in the coming months and years.

• How long does an SBA business plan need to be?

The SBA doesn’t have an official recommended or required business plan length . As a general rule of thumb, you should make your business plan as short and concise as possible. 

Your business plan is going to be reviewed by a bank loan officer, and they will be less than excited about the prospect of reading a 50-page business plan.

If possible, keep the written portion of your business plan between 10-15 pages. Your financial forecasts will take up several additional pages. 

If you’re struggling to keep it short, try a one-page plan

A great way to start your business plan is with a simple, one-page business plan that provides a brief and compelling overview of your business. 

A good one-page plan is easy to read and visually appealing. Once you have your one-page plan, you can expand on the ideas to develop your complete written business plan, and use the one-page plan as your executive summary. 

Loan officers will appreciate a concise overview of your business that provides the summary they need before they start looking at your complete business plan and financial plan .

• Resources and tools for writing an SBA business plan

Remember, you can download a free SBA-lender-approved business plan template . It includes detailed instructions to help you write each section, expert guidance and tips, and is formatted as lenders and investors expect.

If you’re looking for a more powerful plan writing tool, one that can also help you create financial forecasts for the use of your loan, I recommend you check out LivePlan . 

With LivePlan, you get:

• AI-powered recommendations: Generate and rewrite sections of your plan to be more professional and persuasive.
• Step-by-step instructions: In-app examples, tutorials, and tips to help you write an impressive business plan.
• Automatic financials: Skip the spreadsheets and complex formulas, and quickly create accurate financial forecasts with everything a lender needs.
• A built-in pitch presentation: Print or share your full business plan, one-page pitch, and financial reports—all with a professional and polished look.

Whether you use the template, LivePlan, or try writing a business plan yourself, following the structure and tips from this article will improve your chances of getting an SBA-backed loan. 

And for additional SBA-focused resources, check out our guide on how to get an SBA loan .   

Create a business plan that maximizes your chances of securing funding

Noah is the COO at Palo Alto Software, makers of the online business plan app LivePlan. He started his career at Yahoo! and then helped start the user review site Epinions.com. From there he started a software distribution business in the UK before coming to Palo Alto Software to run the marketing and product teams.

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The logo of Rakuten is pictured in Yokohama, Kanagawa, Japan, Aug 2, 2023. REUTERS/Miho Uranaka

TOKYO (Reuters) -Rakuten Group plans to integrate its fintech businesses into one group, it said on Monday, aiming to strengthen collaboration and customer acquisition across areas from online banking and credit cards to securities and insurance.

Rakuten Group and Rakuten Bank entered into a memorandum of understanding on the re-organisation, which is set to take effect in October, the companies said in statements.

Rakuten Bank would continue to be listed on the Tokyo exchange after the integration, they added.

The finances of the parent, centred on e-commerce platform Rakuten Ichiba, have suffered since its 2020 launch of a mobile carrier that led to 14 straight quarters of operating losses.

To generate cash Rakuten has issued equity and debt and sold off assets, for example by listing Rakuten Bank in April 2023.

It also applied to list its securities arm in July 2023 but that was delayed the following November, with Rakuten instead selling a 30% stake in the company to Mizuho Financial Group.

Rakuten will consider dropping plans to list Rakuten Securities following the re-organisation, the group said.

(Reporting by Rocky Swift and Anton Bridge; Editing by Jacqueline Wong)

Copyright 2024 Thomson Reuters .

Tags: Asia , Japan

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'Legal mess': Would-be Red Bank pot shop owners change minds after initially giving up

Four-minute read.

RED BANK - After buying property, securing a conditional license from the state and receiving approval from the borough planning board to allow cannabis sales within 1,000 feet of a school, Plug Naturals LLC withdrew its application to sell recreational marijuana here — and then withdrew its withdrawal letter. 

The confusion resulting from the cannabis company’s actions is what Red Bank planning board attorney Michael Leckstein calls “a legal mess.” 

After cannabis sales were legalized in the borough in 2021, Plug Naturals was one of more than a dozen companies seeking to set up shop. 

The company sought out the house at 156 West Front St. to convert into a store and received a conditional license from the state Cannabis Regulatory Commission in late October 2022. 

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In January 2023, the company came before the planning board to ask for it to be allowed to proceed before the planning board, as opposed to the zoning board where an approval is more difficult to achieve. The issue at hand was that half of 156 West Front St. was within the 1,000-foot drug free school zone . The planning board voted to allow plans for the proposed cannabis store to be heard at a future planning board meeting. 

As a result of decision, the borough council voted to restrict the number of cannabis licenses that could be awarded in the borough. The borough currently allows only three licenses. 

In July 2023, Plug Naturals came before the planning board, but a number of board members expressed disapproval of the site plan. 

Planning board chair Dan Mancuso said at the time, “A conforming lot would solve all your problems,” but “it’s a house.” 

Red Bank: Modern Indian restaurant Saffron opens in downtown

He said there were issues with the buffer, the frontage setback, the driveway size — “which in my opinion is a safety issue” — the rear lot and access from Front Street. 

Hearing the criticism, the company asked that a vote be postponed. 

Then on Sept. 12, 2023, Shawna Ebanks, the borough’s director of Community Development, received a letter from the company that requested that its application be withdrawn without prejudice, meaning it could be refiled at a later date. 

On Oct. 5, 2023, the borough received another letter from the company asking to rescind its withdrawal letter. 

“We previously wrote to you on behalf of the applicant Plug Naturals LLC seeking to withdraw without prejudice (the application). The applicant is in the process of revising its plans in a manner that we believe will fully address each and every one of the planning board’s statements and concerns," Ebanks read aloud during Monday’s planning board meeting. "In that regard we would like to rescind our request to withdraw the application, submit revised plans, renotice and reappear before your planning board.”

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On Oct. 11, 2023, Leckstein, the planning board attorney, wrote back in a letter read by Ebanks saying, “On behalf of the board, I cannot confirm that your request will be accepted by them.”

Leckstein suggested that the company submit revised plans in the meantime. 

“This may be important in determining if your new application is a new application or an amendment to the original,” Leckstein wrote

Ebanks said since Oct. 11, her office has not heard from Plug Naturals. 

Leckstein said his main concern with the first letter is the request to withdraw without prejudice, which he said he feared would allow the company to return with only slight changes to the site plan. 

Mancuso said, “Regardless of what they do, it’s going to be a substantially different application if they are going to address all of our concerns.” 

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He said in his opinion, the company would have to buy the neighboring property to solve the problems with the application. 

The board agreed to send another letter asking the company about their plans. 

But if the company were to reappear before the borough planning board and receive approval, it still faces hurdles in opening its doors. 

On Oct. 13, 2023, three borough licenses were awarded to Canopy Crossroads LLC, The Frosted Nug and Monteverde NJ. Another company, The Garden at Red Bank, received approval by the planning board in December 2023. It plans to open at 199 Riverside Ave. and take over the former gas station. However, The Garden at Red Bank needs to wait for one of the three cannabis borough licenses to become available again. 

“They lost a spot,” Leckstein said about Plug Naturals. 

Olivia Liu is a reporter covering transportation, Red Bank and western Monmouth County. She can be reached at [email protected].

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Japan's Itochu plans record 1 trillion yen investment to drive growth

Japanese trading house Itochu said on Wednesday it will step up investment in growth segments, aiming for record spending of 1 trillion yen ($6.6 billion) in the current financial year and a 10% rise in net profit.