Broker Dealer Business Plan and SWOT Analysis

Broker Dealer Business Plan, Marketing Plan, How To Guide, and Funding Directory

The Broker Dealer Business Plan and Business Development toolkit features 18 different documents that you can use for capital raising or general business planning purposes. Our product line also features comprehensive information regarding to how to start a Broker Dealer business. All business planning packages come with easy-to-use instructions so that you can reduce the time needed to create a professional business plan and presentation.

Your Business Planning Package will be immediately emailed to you after you make your purchase.

Product Specifications (please see images below):

  • Bank/Investor Ready
  • Complete Industry Research for the Industry
  • 3 Year Excel Financial Model
  • Business Plan (26 to 30 pages)
  • Marketing Plan (24 to 28 pages)
  • 425+ Page Funding Directory
  • PowerPoint Presentation
  • Loan Amortization and ROI Tools
  • Three SWOT Analysis Templates
  • How to Start a Business Guide
  • Easy to Use Instructions
  • All Documents Delivered in Word, Excel, and PowerPoint Format
  • Meets SBA Requirements

Broker-dealers play an extremely important part of the capital markets given that they are able to buy and sell securities on behalf of their clients as well as for their own account. These businesses generate fees from a number of different sources including commissions, margin interests, investment advisory services, and actively dealing in securities on an ongoing basis. One of the primary downsides to these types of businesses is that they are heavily regular regulated by the federal and state government. These companies are required to have registrations with FINRA, the SEC, and numerous other financial monitoring agencies to ensure that they had here to the letter of the law all times. This translates into a very high operating expense in order to remain in compliance. However, these businesses can be highly lucrative once they have an established customer base. The revenues that are produced by these businesses are relatively immune from negative changes in the economy given that people are going to require to have the services at any given time. Additionally, these businesses will often produce significant fees from simply holding financial securities on behalf of their customers on an ongoing basis.

The startup cost associated with the new broker-dealer can be either moderate or very expensive depending on the types of services offered. A private placement broker for introducing broker can have a startup cost anywhere from $100,000 to $200,000 while a clearing brokerage can have startup cost in excess of $1 million. Companies that trade for their own account typically have startup cost that range anywhere from $750,000 to $2 million depending on whether or not it will be actively engaged in the dealing of securities and market-making. As with any type of financial business, a CPA as well as a highly qualified attorney should be retained so that these businesses can make sure that they remain in compliance at all times following all standard accounting procedures as it relates to these financial service businesses.

Given their highly predictable revenues, most financial institutions and private investors are willing to put up the necessary capital to start a new broker-dealer. Of course, a broker-dealer business plan is going to be required and this document should include a three-year profit and loss statement, cash flow analysis, balance sheet, breakeven analysis, and business ratios page. For industry research, the financial services industry as it relates to broker-dealers typically generates an excess of $300 billion years of fees, interest, and commissions. The industry employs more than one million people and provides payrolls in excess of $200 billion each year. This can be a very highly lucrative industry for companies that engage in finding financial services.

The marketing required by new broker-dealer can be somewhat limited or somewhat expansive depending on the types of services offered. For broker-dealers that are going to primarily operate as a prime broker for hedge funds, private equity groups, and related entities – and the marketing campaign can be smaller and much more focused towards the high income and high net worth individuals and companies within this market space. However, there is still a significant amount of competition as it relates to obtaining these customers and a broad-based marketing campaign is very expensive most likely need to be implemented. Additionally, it is important to remember that when it relates to advertisements for brokerage services that there needs to be a number of disclosures that are included. This also includes providing a significant amount of legal disclosures as it relates to prospectuses that are distributed by the broker-dealer business.

If the broker-dealer is going to be doing a lot of business with the general public and it is important that they maintain a multipronged marketing strategy that includes online marketing, print advertising, and developing a network of registered representatives that will promote the business in exchange for commission fees. As it relates to online marketing, the broker-dealer is going to need to have an expansive proprietary website that allows individuals to place trades, cedar account balances, obtain tax forms, and engage in a number of other activities as it relates to their securities trading operations. This website should be listed among all major search engines including Google, Bing, and Yahoo.

A presence on social media is of moderate importance to the broker-dealer given that many people do not find financial services if they are going to use to platforms such as FaceBook, Twitter, and Google+. However, most major financial firms to maintain a moderate presence on these platforms in order to boost their brand-name visibility. Some studies have pointed out the fact that an individual needs to see an advertisement nearly 100 times before they can remember on an ongoing basis. As such, it is a low-cost form of boosting brand-name visibility to target a large swath of people as it relates to financial services. Again, it should be noted that a social marketing consultant with a specific focus on financial services should be retained in order to make sure that any advertisements that are being distributed by the broker-dealer fall in line with legally acceptable standards. Most importantly, it can be expected that about 5% to 10% of the total amount of expenditures for the broker-dealer will be focused on marketing activities.

A broker-dealer SWOT analysis should be produced as well. This document focuses on the strengths, weaknesses, opportunities, and threats that are normally faced by financial services businesses. As it relates to strengths, broker-dealers are able to generate a significant amount of high-margin income from a number of different revenue centers. Again, this includes commission income, margin interests, advisory fees, and direct trading fees for the company’s own account. The startup costs are considered to be moderate for financial service business and the barriers are can to entry are considered to moderately high.

For weaknesses, there are a significant amount of regulations that broker-dealers need to adhere to on an ongoing basis. This is one of the largest expenses for these firms given that they must retain a law firm that has a specific understanding of securities law. These operating expenses are also considered to moderately high given the large amount of marketing that needs to be done on an ongoing basis.

For opportunities, this is quite simple given that many broker-dealers can simply expand by increasing the capital base for trading for their own account. Additionally, significantly investments into the company’s marketing infrastructure will secure additional client so that the business can grow organically. One of the other ways that a broker-dealer can expand is to acquire existing businesses that already have an operating history.

As it relates to threats, there are a number of regulations that are continually changing depending on the type of administration that is currently occupying the United States government. However, there are really no major outside threats outside of a significant economic recession that would change the way that these businesses are able to generate revenues were operate their businesses profitably. Broker-dealers are going to continue to be one of the most important types of companies within the United States given that they are able to affect transactions between companies as well as among individuals are looking to save for retirement. One of the nice things about these businesses is that they are generally able to always find ways to produce an income especially as it relates to directly trading securities for a broker-dealers own account. Almost all of these financial service companies now maintain proprietary sales and trading desks and engage in this activity that can help offset the risks of operating a standard broker-dealer on a day-to-day basis.