Commercial Bank Business Plan and SWOT Analysis

Commercial Bank Business Plan, Marketing Plan, How To Guide, and Funding Directory

The Commercial Bank 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 Commercial Bank 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

Commercial banks are one of the oldest industries within the United States. In fact, commercial banking is one of the backbones to the economy. These organizations allow  individuals to safely keep their money in a financial institution while concurrently being able to borrow funds to purchase new homes, develop new businesses, and pay for certain day-to-day expenses. In fact, one of the reasons why the commercial banking industry is the most regulated aspect of the financial system given that it is so central to every other business within the United States and abroad. The financial crisis of 2008 made it even abundantly more clear that having strong commercial regulations as it relates to banking is essential for a thriving economy.

Commercial banks are also an important part of any community given that they extend credit for economically viable projects like small businesses, farms, real estate developments, as well as a host of other financing activities that improve the lives of people within the community. In fact, many economic studies point to the fact that the extension of credit is one of the single greatest factors in ensuring that a community can thrive on an ongoing basis. This is especially true given that credit is the lifeblood for many small businesses that need ongoing working capital as well as expansion capital.

The barriers to entry for a new commercial bank are extremely high. Typically, a minimum capital investment of at least $10 million to $20 million is required as part of the tier 1 capital needed to launch operations. Banks typically are able to lend up to 90% of the money that they have in deposits, but they are required to keep a substantial amount of equity on hand in order to defray some of the risks that may happen with credit defaults. Generally, a commercial bank cannot be owned by one single individual. It is a requirement by the FDIC as well as the US Federal Reserve system that a large-scale board of directors is maintained in order to properly carry out banking operations.

A commercial bank business plan should have a three-year profit and loss statement, cash flow analysis, balance sheet, breakeven analysis, and business ratios page it focuses significantly on how income will be generated from interest on loans as well as fees associated with checking accounts, savings accounts, and brokerage accounts. It is been one of the common trends within this industry to integrate a host of financial services into one commercial banking facility. In fact, among the 8,000 different banks within the United States about half of them maintain securities licenses so they can hold individuals retirement accounts, 401(k)s, IRAs, and related financial instruments on behalf of their customers. This trend is expected to continue in perpetuity given that vertical integration allows for commercial banks to generate significantly more profits.

The commercial bank business plan should also feature a substantial amount of demographic information. This is going to be required by the Federal Reserve as well as other banking organizations are issue licenses before operations can commence. This examination should include an overview of the population size, population density, median household income, median family income, median household value, and the demographics of people of all ages. Anyone that is over the age of 18 can acquire a bank account and it is important to understand the wealth and income levels within the target market in order to get an understanding of how much money will be held in deposits at any given time. These again are going to be pieces of information that are to be required not only in the business plan but also for applications for banking licenses.

A commercial bank marketing plan is also going to need to be developed and submitted not only to investors that are going to put up the initial $10 to $20 million of capital needed but also to licensing authorities. Foremost, most commercial banks start in more rural areas were small towns in order to get an initial customer base. Many people choose to do banking with smaller banks because they prefer the close personal relationship that they can have with their financial professionals. As such, most commercial banks position their marketing messages so that they are able to effectively differentiate themselves from large-scale money center banks. Although commercial banks are operate in a different capacity than a credit union, most local small banks do try to provide the same level of service. It is imperative

It is imperative these days that any financial institution maintain an expansive online presence as it relates to not only providing information about services offered but also functionality that allows the users to check their online balances, complete bill paying, overview any loans or lines of credit there are outstanding, and a whole host of other activities that are normally associated with financial transactions. This is now no longer an option for a business to have given that almost all large money center banks to provide their customers not only with a website they can use for financial transactions but also for mobile applications as well. Once established, many smaller commercial banks will seek to develop mobile applications that allow users to manage their finances from the convenience of their mobile phone or tablet.

A large-scale print advertising campaign is going to need to be undertaken in order to generate interest among individuals within the community for checking accounts, savings accounts, and brokerage accounts. Most importantly, this print advertising campaign needs to be carry out on every medium available within a target market radius of 25 miles to 50 miles depending on the type of location. An attorney that is familiar with banking and lending laws should review all marketing materials that are distributed by the bank in order to ensure that the business is complying with all disclosure laws at all times. This is one of the major ongoing challenges for marketing as it relates to a commercial bank given that certain statements must fall in line with legally permissible regulations.

A commercial bank SWOT analysis should be produced as well. As it relates to strengths, a commercial bank is able to generate income and pretty much every economic climate given that loans are considered to be contractual agreements and interest will continue to be paid despite whether or not the economy is doing well or poorly. Additionally, commercial banks have extremely high barriers to entry given the extremely large amount of money needed to launch operations as well as the ongoing licensing activities that need to be maintained at all times. For weaknesses, commercial banks can have a decline in the revenues or have substantial issues with the balance sheets during times of economic recession when people do not pay their financial obligations. However, most financial institutions are highly regulated so that if a loss occurs in any given time the bank will be able to remain financially stable. For opportunities, one of the ways that has been most prevalent for commercial banks to expand their operations is to acquire third-party companies. These mergers and acquisitions often create much larger financial situations are far more financially stable. Additionally, many commercial banks will seek to sell themselves to a large money center bank in order to generate a substantial return on investment from the sale of the business as a whole. Many financial institutions will also seek to establish additional locations so that they can even increase the number of deposits that they have in the form of checking accounts and savings accounts. Finally, for threats – major changes in regulation are frequent within the financial services and commercial banking industry. As such, a highly skilled attorney or law firm has extensive familiarity with commercial banking needs to be retained in order to ensure that the bank can properly operate due to any changes in financial regulation on the federal level.

A commercial bank is one of the hardest types of businesses to start but once they are operational there tend to be highly profitable companies. It is imperative that the entrepreneur that is looking to start this business have an extensive understanding of banking as well as extensive experience within this field. Banking licenses required that there is a significant amount of experience and diligence as it rates to operating these businesses on a day-to-day basis.