Here is how to write a commercial bank business plan.
The financial services sector of any economy can never be complete without the services offered by commercial banks.
Commercial and private banks are profit-based. They grant loans, accept deposits, and also offer other types of financial services like electronic banking (including the transfer of funds among others).
Commercial Banking Business Plan Sample
In writing your commercial bank business plan, the following sections should not be left out.
These are basic to having a successful and implementable plan. They include the executive summary section, the company description, market analysis, and competitive analysis sections.
Additional sections include a description of management and organization, breakdown of products and services, marketing plan, sales strategy, request for funding, and financial projections.
Each of these is key to writing a comprehensive commercial bank business plan.
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Executive Summary Section
As the name suggests, your commercial bank business plan should have the executive summary section. This should be the first section of your plan. Though this is the usual pattern, it is written last.
This is understandable because it summarizes your entire plan.
Now, the executive summary section of your business shouldn’t belong. It should be a page or two at most. To provide your reader with an enjoyable presentation of what your commercial bank business is about, it should follow a basic format;
Questions that will need to be answered here include what your commercial bank business is about, how it fits into the marketplace, and the problem it solves. One of the common problems it solves involves reaching the unbanked population with basic as well as innovative commercial banking services.
What is the cost of starting a commercial banking business and how much financing do you need? The investor(s) is interested in how their investments plus interest will be recouped. So, what is the return on investment like?
Your vision and mission statements must be added including how the ownership structure of your commercial bank operations is.
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Company Description
A detailed description of your commercial bank business must be provided under this section. Important information must be provided here including your goals, as well as your target market.
There should be a discussion of how your banking operations will stand out from the rest. Also, you must state how your services and products (if any) will be helpful to clients or your target market.
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Market Analysis
This is one of the most crucial parts of your commercial bank business plan. Here, an in-depth assessment of the financial services industry is required to enable you to have a full grasp of specific gaps you need to fill.
The use of data and statistics to explain the industry as well as findings and trends is very important. That way, a likely direction is identified and you’re able to seek innovative ways to serve your target clients better.
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Competitive Analysis
Commercial banking is a highly competitive sector.
As such, you’ll need to determine or analyze how your business will come, what gaps to fill and also identify your competitors (other commercial banks).
When identifying your competitors, your goal is to know their strengths and weaknesses and finding ways your commercial banking operations will stack up against such.
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Description of Management & Organization
Your commercial bank business needs an organizational structure.
Here, you’ll need to elaborate on membership, qualifications, and positions within your management team to be filled. Only skilled and experienced professionals must be picked for such positions.
The structure your commercial bank will take or adopt is also important and must be clearly stated. Membership of your bank’s board of directors must also be identified and provided.
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Breakdown of Products and Services
Commercial banking operations are mostly service-based.
However, depending on your areas of interest, you may want to create products such as project finance, industrial loans, leasing, syndicated loans, bills of exchange, foreign trade financing among several others.
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Marketing Plan
Marketing is a basic part of commercial banking operations.
As such, you’ll need to have a detailed plan on how you intend to sell your products to clients (both new and existing). A well-written marketing plan should include market research, identify a target market, and also discuss positioning.
Other vital components include competitive analysis, market strategy, budget, and metrics. These enable you to come up with an effective marketing strategy that bolsters your operations leading to increased levels of success.
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Sales Strategy
Every service or product offered by a commercial bank needs to be sold. Here, you’ll need to discuss the ways and strategies through which your services and products will be sold. There must be clarity.
Apart from the methods to be adopted, strategies may include the hiring and deployment of sales reps to specific targets or clients. With an effective sales strategy, your commercial banking operations are likely to be successful in the long run.
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Request for Funding
Part of the requirements for starting a successful commercial banking operation involves getting the funding necessary. For this to be possible, you’ll need to request funding.
Here, discussions will focus on the amount required for the takeoff of your bank.
Detailed information on how these funds will be spent is also essential. You may also want to disclose future funding requirements for any projects or expansion plans to your operations (if any).
With detailed information provided on these, your chances of getting the needed funding are significantly increased.
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Financial Projections
This section discusses the anticipated revenue and must include set goals or targets based on market research.
A full report of your anticipated revenue covering 12 months and also your projected earnings for a period covering 5 years must be included.
Clarity is of the essence when it comes to writing a commercial bank business plan. Not only does this help your reader fully grasp its contents, but it also enables you to strategically implement your banking operations.
Here, we’ve provided tips and guidance on how to go about writing your commercial banking business plan. The sections included here are crucial and must be covered in detail. No aspect of your operations must be left out.
Equally important is the need to fully implement its content.