business plan for new branch

5. Plan your course of action.

Next, outline how you’ll achieve your growth goals with a detailed growth strategy. Again, we suggest writing out a detailed growth strategy plan to gain the understanding and buy-in of your team.

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How to Create a Powerful Business Development Plan: 10 Steps to Success

Learn how to craft an effective business development plan with SMART goals, innovative strategies, and practical tips for successful growth.

Sep 13, 2024

Ready to take your business to new heights? A solid business development plan is your roadmap to success. It's not just a fancy document to impress investors; it's your game plan for growth, profitability, and long-term stability.

Ever wondered why some businesses thrive while others struggle? The secret often lies in their approach to business development. Whether you're a startup founder or a seasoned entrepreneur, crafting a well-thought-out plan can make all the difference. It's about setting clear goals, identifying opportunities, and mapping out strategies to achieve them.

So, are you ready to unlock your business's full potential? Let's jump into the world of business development planning and discover how you can create a blueprint for your company's future success.

What Is a Business Development Plan?

A business development plan is a strategic roadmap that outlines your company's growth objectives and the steps to achieve them. It's a comprehensive document that combines elements of marketing, sales, and operational strategies to propel your business forward.

Key components of a business development plan include:

Clear, SMART goals

Detailed target audience profiles

In-depth market research

Funding strategies

Sales and marketing tactics

Operational needs assessment

Your plan serves as a guide for decision-making, resource allocation, and performance measurement. It's not just a static document but a dynamic tool that evolves with your business.

Common misconceptions about business development plans:

They're only for startups: Established businesses benefit equally from regular planning.

They're set in stone: Effective plans are flexible and adapt to changing market conditions.

They're all about sales: While sales are crucial, a comprehensive plan covers all aspects of growth.

When crafting your plan, consider these practical tips:

Start with a SWOT analysis to identify your strengths, weaknesses, opportunities, and threats.

Set realistic, measurable goals with specific timelines.

Research your target market thoroughly, including competitor analysis.

Outline your unique value proposition clearly.

Detail your sales funnel and customer acquisition strategies.

Different approaches to business development planning:

Top-down approach: Start with broad company goals and break them down into specific departmental objectives.

Bottom-up approach: Begin with individual team goals and align them with overall company objectives.

Hybrid approach: Combine elements of both to create a balanced plan.

Incorporating best practices:

Regularly review and update your plan (quarterly or bi-annually).

Involve key team members in the planning process for diverse perspectives.

Use data-driven insights to inform your strategies.

Align your business development goals with your company's mission and values.

By creating a robust business development plan, you're setting the stage for sustainable growth and success. Remember, the plan is a tool to guide your efforts, not a rigid set of rules. Stay flexible, monitor your progress, and adjust your strategies as needed to navigate the ever-changing business world.

Key Components of a Business Development Plan

A comprehensive business development plan consists of several essential components that work together to guide your company's growth strategy. Let's explore each of these key elements in detail.

Executive Summary

The executive summary provides a concise overview of your business development plan. It's the first section readers encounter, offering a snapshot of your company's goals and strategies. Here's what to include:

Company mission and vision

Brief description of products or services

Key objectives and growth targets

Overview of market opportunities

Summary of financial projections

Remember, while it's the first section in your plan, it's often best to write it last. This ensures you capture the essence of your entire plan accurately.

Company Description

Your company description sets the stage for the rest of your plan. It's where you tell your company's story and highlight what makes you unique. Include:

Detailed mission statement

Company history and milestones

Legal structure and ownership

Core values and company culture

Unique selling propositions (USPs)

This section helps readers understand your company's identity and what sets you apart from competitors.

Market Analysis

A thorough market analysis demonstrates your understanding of the industry world. It should cover:

Industry size, trends, and growth potential

Market segmentation

Customer needs and pain points

Regulatory environment

Technological factors

Use data and statistics to support your analysis. This shows potential investors or partners that you've done your assignments.

Target Audience

Identifying your target audience is crucial for focused business development efforts. Describe:

Demographic characteristics

Psychographic profiles

Buying behaviors and preferences

Customer personas

The more specific you are about your target audience, the more effectively you can tailor your strategies to reach them.

Competitive Analysis

Understanding your competition is vital for positioning your business effectively. Include:

Direct and indirect competitors

Competitor strengths and weaknesses

Market share analysis

Competitive advantage assessment

Potential threats from new entrants

Use tools like SWOT analysis to provide a comprehensive view of your competitive world.

Sales and Marketing Strategy

Your sales and marketing strategy outlines how you'll reach and convert your target audience. Detail:

Sales process and tactics

Marketing channels and campaigns

Pricing strategy

Customer acquisition and retention plans

Branding and positioning

Be specific about your tactics. For example, if you're focusing on LinkedIn outreach , describe your approach, content strategy, and engagement metrics.

Incorporating tools like Growleady can help streamline your LinkedIn efforts by providing valuable insights and managing your lead pipeline more efficiently.

Financial Projections

Financial projections demonstrate the viability of your business development plan. Include:

Revenue forecasts

Cost estimates

Break-even analysis

Cash flow projections

Funding requirements and sources

Use realistic assumptions and provide both best-case and worst-case scenarios. This shows you've considered various outcomes and are prepared for different situations.

Steps to Write an Effective Business Development Plan

Creating a solid business development plan is crucial for guiding your company's growth and success. Here's a step-by-step guide to crafting an effective plan that'll set you on the right path.

Define Your Business Goals

Start by clearly outlining your business objectives. These goals should be specific, measurable, achievable, relevant, and time-bound (SMART). For example:

Increase revenue by 25% within the next fiscal year

Expand into two new market segments by Q3

Launch three new product lines by the end of the year

When setting these goals, consider your company's current position, resources, and market conditions. Align your objectives with your overall business strategy to ensure consistency and focus.

Conduct Thorough Research

Dive deep into market research to gain valuable insights:

Identify your target audience: Analyze demographics, psychographics, and buying behaviors

Study competitors: Assess their strengths, weaknesses, and market positioning

Explore industry trends: Stay informed about emerging technologies and shifting consumer preferences

Use tools like surveys, focus groups, and industry reports to gather data. This research will help you make informed decisions and identify opportunities for growth.

Outline Your Strategy

Develop a comprehensive strategy based on your research:

Choose marketing channels: Select platforms where your target audience is most active

Highlight your unique value proposition: Emphasize what sets you apart from competitors

Align tactics with goals: Ensure each strategy directly contributes to your objectives

For example, if your goal is to expand into new markets, your strategy might include targeted social media campaigns , partnerships with local businesses, or attending industry trade shows.

Set Measurable Objectives

Establish key performance indicators (KPIs) to track progress:

Revenue targets: Set specific monthly or quarterly sales goals

Customer acquisition cost: Determine an acceptable cost per new customer

Conversion rates: Track the percentage of leads that become paying customers

Use data analytics tools to monitor these KPIs regularly. This allows you to adjust your strategies quickly if you're not meeting your objectives.

Create an Action Plan

Develop a detailed roadmap for implementing your strategies:

Break down large goals into smaller, manageable tasks

Assign responsibilities to team members

Set deadlines for each task and milestone

Allocate resources effectively

For instance, if your goal is to launch a new product line, your action plan might include steps like market research, product development, testing, marketing campaign creation, and launch event planning.

Remember, your business development plan should be flexible. Regularly review and update it based on your progress and changing market conditions. This approach ensures your plan remains relevant and continues to guide your business towards success.

Common Mistakes to Avoid When Writing a Business Development Plan

Creating a business development plan is crucial for success, but it's easy to make mistakes that can derail your efforts. Here are some common pitfalls to watch out for:

Overlooking Market Research

Don't skip thorough market research. It's like trying to navigate a new city without a map. Dive deep into your industry, competitors, and target audience. Use tools like Google Trends, industry reports, and customer surveys to gather solid data. This information forms the foundation of your plan, helping you make informed decisions and spot opportunities others might miss.

Setting Unrealistic Goals

Ambitious goals are great, but they need to be achievable. Setting unrealistic targets is like aiming to run a marathon without proper training - you're setting yourself up for disappointment. Use the SMART framework (Specific, Measurable, Achievable, Relevant, Time-bound) to create goals that challenge you but remain within reach. For example, instead of "increase sales," aim for "boost monthly recurring revenue by 15% within the next quarter."

Neglecting Financial Projections

Ignoring the numbers is like trying to build a house without a budget. Include detailed financial projections in your plan. This means forecasting revenue, expenses, and cash flow. Use tools like Excel or specialized financial planning software to create these projections. Remember to account for different scenarios - best case, worst case, and most likely - to prepare for various outcomes.

Failing to Define Target Audience

A vague target audience is like casting a wide net in a small pond - ineffective and wasteful. Be specific about who you're targeting. Create detailed buyer personas that include demographics, psychographics, pain points, and buying behaviors. This precision allows you to tailor your strategies and messaging, making your outreach efforts more effective.

Ignoring Competitive Analysis

Overlooking your competition is like playing chess without studying your opponent's moves. Conduct a thorough competitive analysis. Identify your main competitors, their strengths, weaknesses, and market positioning. Use tools like SEMrush or Ahrefs to analyze their online presence and marketing strategies. This insight helps you differentiate your offering and find gaps in the market you can exploit.

Lack of Flexibility

A rigid plan is like a tree that can't bend in the wind - it's likely to break. Build flexibility into your plan. The business world changes rapidly, and your plan should be able to adapt. Schedule regular reviews (quarterly is a good start) to assess your progress and make necessary adjustments. This agility allows you to respond quickly to market shifts, new opportunities, or unexpected challenges.

Underestimating Resources Needed

Failing to accurately estimate required resources is like embarking on a long journey with a half-empty gas tank. Be realistic about the time, money, and manpower needed to execute your plan. Include a detailed resource allocation section in your plan. Consider using project management tools like Trello or Asana to map out tasks and timelines, ensuring you have the necessary resources at each stage of implementation.

By avoiding these common mistakes, you'll create a more robust and effective business development plan. Remember, the goal is to have a living document that guides your growth efforts, not a static report that gathers dust on a shelf.

Tips for Implementing Your Business Development Plan

Start with small, achievable goals.

Break down your larger objectives into smaller, manageable tasks. This approach helps you maintain momentum and track progress effectively. For example, if your goal is to increase revenue by 20% this year, set monthly targets that contribute to this overall objective.

Prioritize Relationship Building

Focus on building strong relationships with potential clients and partners. Dedicate time each week for networking activities, such as attending industry events or scheduling one-on-one meetings. Remember, business development is often about creating long-term connections that lead to opportunities down the road.

Leverage Technology

Use customer relationship management (CRM) tools to track leads, manage interactions, and analyze your sales pipeline. Tools like Salesforce or HubSpot can streamline your processes and provide valuable insights into your business development efforts.

Develop a Strong Online Presence

In modern digital era, a robust online presence is crucial. Optimize your website for search engines, create valuable content through blogging, and engage with your audience on social media platforms. This helps establish your brand authority and attracts potential leads.

Carry out a Referral Program

Encourage satisfied clients to refer your business to others. Design a referral program that offers incentives for successful recommendations. This can be an effective way to generate high-quality leads and expand your customer base.

Continuously Educate Yourself

Stay updated on industry trends, new technologies, and best practices in business development. Attend workshops, webinars, or pursue relevant certifications to enhance your skills and knowledge.

Measure and Analyze Results

Regularly review your key performance indicators (KPIs) to assess the effectiveness of your business development strategies. Use data analytics tools to gain insights into what's working and what needs improvement. Adjust your plan accordingly based on these findings.

Foster Cross-Departmental Collaboration

Encourage collaboration between your business development team and other departments like marketing, sales, and product development. This synergy can lead to innovative ideas and more effective strategies for growth.

Be Flexible and Adaptable

While it's important to stick to your plan, be prepared to pivot when necessary. Market conditions, customer needs, and competitive landscapes can change rapidly. Regularly reassess your plan and be willing to make adjustments to stay ahead of the curve.

Focus on Customer Retention

Don't neglect your existing customers while pursuing new ones. Carry out strategies to increase customer loyalty and retention, such as personalized communication, exceptional customer service, and loyalty programs. Retained customers often lead to repeat business and valuable referrals.

Creating a robust business development plan is crucial for your company's growth and success. By following the steps outlined in this guide you'll be well-equipped to set clear goals analyze your market and develop effective strategies. Remember your plan should be adaptable and regularly reviewed. Avoid common pitfalls like neglecting research or financial projections. Carry out your plan strategically focusing on building relationships leveraging technology and measuring results. With a well-crafted business development plan you'll be better positioned to navigate challenges seize opportunities and drive your business forward. Stay committed to continuous improvement and watch your business thrive.

Frequently Asked Questions

What is a business development plan.

A business development plan is a strategic document that outlines how a company intends to grow and expand its operations. It typically includes SMART goals, market research findings, and strategies for finance, sales, and marketing. This plan serves as a roadmap for achieving business objectives and adapting to various stages of growth.

Why is market research important in business development?

Market research is crucial because it provides valuable insights into your target audience, competitors, and industry trends. This information helps you make informed decisions, identify opportunities, and develop effective strategies. Overlooking market research can lead to misaligned products or services, ineffective marketing, and missed growth opportunities.

How often should I update my business development plan?

You should review and update your business development plan regularly, ideally every quarter or at least annually. This ensures that your plan remains relevant and adaptable to changing market conditions, internal factors, and new opportunities. Regular updates help you stay on track with your goals and make necessary adjustments to your strategies.

What are some common mistakes to avoid in business development planning?

Common mistakes include overlooking thorough market research, neglecting financial projections, setting unrealistic goals, and failing to adapt the plan as the business grows. Other pitfalls are ignoring customer feedback, underestimating competition, and not aligning the plan with overall business objectives. Avoiding these mistakes can significantly improve the effectiveness of your business development efforts.

How can I implement a successful business development plan?

To implement a successful plan, start with achievable goals, prioritize relationship building, and leverage technology. Develop a strong online presence, implement a referral program, and focus on continuous education. Measure results regularly, foster collaboration within your team, be flexible to adapt to changes, and prioritize customer retention. These strategies will help drive growth and improve overall business effectiveness.

What role does technology play in business development?

Technology plays a crucial role in modern business development. It can streamline processes, improve communication, enhance customer experiences, and provide valuable data insights. Leveraging tools like CRM systems, marketing automation, and data analytics can significantly boost efficiency and effectiveness in implementing your business development strategies.

How important is customer retention in business development?

Customer retention is extremely important in business development. Retaining existing customers is often more cost-effective than acquiring new ones. Satisfied, loyal customers can become brand advocates, providing referrals and positive word-of-mouth marketing. Focus on excellent customer service, personalized experiences, and continual value provision to improve retention rates and drive sustainable growth.

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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 Bank Business Plan?

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

Why You Need a Business Plan for Your Bank Business

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

Sources of Funding for Banks

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

Finish Your Business Plan Today!

How to write a business plan for a bank.

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

Executive Summary

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

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

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

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

Company Overview

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

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

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

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

Include answers to questions such as:

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

Industry Analysis

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

While this may seem unnecessary, it serves multiple purposes.

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

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

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

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

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

Customer Analysis

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

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

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

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

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

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Competitive Analysis

Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.

Direct competitors are other banks.

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

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

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

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

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

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

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

Marketing Plan

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

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

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

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

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

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

Operations Plan

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

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

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

Management Team

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

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

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

Financial Plan

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

Income Statement

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

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

Balance Sheets

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

Cash Flow Statement

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

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

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

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

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

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

OR, Let Us Develop Your Plan For You

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

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15 Advantages and disadvantages of opening a new branch office

Expanding a business is an exciting endeavor for any business owner.

It provides the opportunity to reach new customers, offer new products and services, and explore new markets.

However, like any business decision, opening a new branch office comes with its own set of advantages and disadvantages.

In this article, we will explore the advantages and disadvantages of opening a new branch office and how it can affect your business growth and expansion.

• Redaction Team
• September 25, 2023
• Business Planning , Entrepreneurship

Advantages of Opening a New Branch Office

• Market Expansion : Opening a new branch office allows you to tap into new markets for business expansion and reach a wider customer base. This can lead to increased sales and revenue.
• Geographic Diversity : Branch offices in different locations can provide geographic diversity, reducing your exposure to regional economic downturns or market fluctuations.
• Brand Presence : Expanding with new branches can enhance your brand's visibility and recognition in different regions or markets.
• Customer Convenience : New branches can make it more convenient for customers to access your products or services, potentially increasing customer loyalty and satisfaction.
• Local Expertise : Branches in different areas can benefit from local expertise, knowledge, and insights into the unique needs and preferences of customers in those regions.
• Economies of Scale : Multiple branches can lead to economies of scale in areas like procurement, marketing, and administration, potentially reducing per-unit costs.
• Competitive Advantage : Expanding your physical presence can give you a competitive advantage over competitors who may have a more limited geographic reach.

Disadvantages of Opening a New Branch Office

• High Initial Costs : Setting up a new branch can be expensive, involving costs such as leasing or purchasing real estate, hiring staff, and outfitting the office.
• Operational Complexities : Managing multiple branches can be operationally complex, requiring effective communication, coordination, and supervision.
• Market Risk : Entering new markets carries inherent risks, including uncertainty about customer demand, competition, and regulatory challenges.
• Management Challenges : Expanding with new branches may strain your management resources, as you'll need to oversee operations in multiple locations.
• Financial Risk : New branches may take time to become profitable, and there's a risk of financial strain if they don't generate sufficient revenue to cover their costs.
• Cannibalization : New branches may compete with existing ones for the same customer base, potentially leading to cannibalization of sales.
• Dilution of Focus : Managing multiple branches can divert your attention and resources away from your core business and strategic objectives.
• Legal and Compliance Issues : Expanding into new areas may require compliance with different local regulations, which can be time-consuming and costly.

Advantages of opening a new branch office

Opening a new branch office can bring several advantages to your business. One of the main advantages is the ability to expand your customer base. By opening a new branch office, you can reach customers in a different location who may not have been aware of your business before. This can lead to an increase in sales and revenue, as well as the potential for new income streams.

Another advantage is the ability to diversify your business. By opening a new branch office, you can offer new products and services to your customers. This not only expands your customer base but also allows you to tap into new markets. This diversification can help protect your business from downturns in specific industries and provide stability to your income streams.

Opening a new branch office can also help improve your productivity. By delegating some of the workload to the employees at the new branch, you can free up your time to focus on other aspects of your business. This can lead to increased efficiency and allow you to take advantage of economies of scale, which can result in cost savings and improved cash flow, for this you can read tips about financial management for entrepreneurs .

Disadvantages of opening a new branch office

While there are advantages to opening a new branch office, there are also several disadvantages that business owners should consider. One of the main disadvantages is the capital requirements. Opening a new branch office can be costly, as it requires investment in infrastructure, equipment, and hiring new staff. It is important to carefully assess your financial situation and ensure that you have enough capital to support the expansion.

Another disadvantage is the potential for compromised quality. As your business expands and you add new products and services, it can be challenging to maintain the same level of quality across all branches. This can negatively impact your reputation and customer satisfaction. It is important to have systems in place to ensure consistency and quality control across all branches.

Opening a new branch office also means dealing with the complexities of managing multiple locations. This can increase the workload for business owners, as they need to oversee and coordinate operations across different branches. It requires effective communication and management skills to ensure smooth business transactions and operations.

Conclusion of Advantages and Disadvantages of Business Expansion

Opening a new branch office can be a strategic move to expand your business and tap into new markets. However, it is important to consider both the advantages and disadvantages before making the decision. It requires careful planning, adequate capital, and effective management to ensure the success of the new branch. By weighing the pros and cons and assessing the potential impact on your business, you can make an informed decision that aligns with your growth objectives.

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Six Battle-Tested Strategies to Establishing a Branch Office

In most cases they walk, ill-equipped, into battle against something new and unexpected, like a two-headed blood thirsty battle cat that hurls spears at your armor while whisking your legs out from under them with its lethal tail. Some adapt and conquer the beast while others are cut off at the knees and impaled in the throat.

Expanding your business, into more locations, is much like stepping into battle with an adversary that you are not prepared to defeat. There are A/E firms that have conquered these beasts. Every experience is unique, challenging, and rewarding. Here are six strategies learned along the way that have helped firms like yours be successful and grow in new locations :

Be true to your Core Values, Vision, and Strategic Plan.  Assuming your opportunity and location is recognized, you must question your motives. For us this was a regular conversation. Revisit your values and mission, and make sure the new office is staying in line with the company culture and goals.

Expect battle wounds while establishing a new location.  Battle wounds may come in the form of big costs, unexpected  costs,and lost projects. We dodged and took several unexpected  lashings while we established and grew our business. Keep your  eyes open, press forward, and remember, from your current  business experience, you can take a punch.

Know your battle plan and teammates.  Progress and success will  hinge on a well-executed revenue forecast and business development plan…without sacrificing profits! Inasmuch, your current financial and  organizational business needs to be well organized and capitalized.  Find a new financial teammate if your current group or institution is unwilling to grow with you.

Be different. Define success and growth on your own terms. You are successful, so act like it. You are good at what you do, so keep doing it. Who cares what your competition is doing!

Choose your weapon wisely . The person, or Champion, you identify for leading this new location may be one of the most important decisions you make. Our company invested quite a bit of time into this decision. Please don’t mess this up.

Appeal to everyone in the firm for this new endeavor. Tell your friends and close clients. Create positive commotion and chanting in the arena. This noise is a huge motivator and creates momentum for your Champion and the principals of the firm. This is an endeavor of the entire firm, not merely the leading individual.

Other Branch Office related blog posts:

Data Dive: Best Practices in Branch Office Management

Letter from the Field: Growing a Branch Office

Might as Well Jump: Tips for Branch Office Success

Three Pieces of Advice for Evaluating Branch Office Success

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Bank Marketing Strategy

10 Promotion Strategies for Your New Branch Opening

According to the ABA,  two-thirds of Americans are using online and mobile banking as their primary banking channels . As a result, banks are seeing  decreased foot traffic  and increased competition from online financial institutions. However, it’s still important to complement your online services with a local bank branch that is useful, accessible and friendly. Local bank branches understand the needs of their community and help neighbors reach their financial goals. Once you’ve chosen the perfect location, staff and equipment to serve your community, how will customers find you?

Today’s customers rely on the internet to find what they need, when they need it. They may drive past your branch every day and never stop to notice it. Instead, they’ll rely on your website, search engines, social media, and  online reviews  to find relevant information that will help them make an informed decision. That’s why it’s vital to have a comprehensive and consistent online footprint!

You may already have a  web marketing strategy in place to promote your website and your existing branches. But when it comes to promoting a new branch or location, you need a surefire strategy to let the neighborhood know you’re coming before the doors open. With a branch promotion strategy that combines online advertising, direct marketing, and a highly anticipated event, your opening will be a success!

1. Create a Branch Location Page on Your Website

Search engines like Google rely on location landing pages to send customers to your door. This is a  search engine optimization  best practice, so you should already have branch location pages on your website for each of your bank branches. If you haven’t done so already, give your new bank branch its own page on your website with an optimized meta title and description. Then complete the location page with helpful details that answer customers’ questions and appeal to their image of the ideal bank. The following information is essential to maximizing the SEO and usefulness of your page.

• Location Image : A professional photo of your location will help customers find you and increase familiarity.
• Phone Number:  Make it clickable to serve the many customers who will be searching for you on their cell phones.
• Address:  Your physical address paired with a dynamic Google Map API makes it easier for customers to get directions to your branch.
• Hours of Operation:  These should be consistent across all your location listings online. Don’t forget to include holiday closings.
• Branch Manager:  Build trust by providing the name and a professional photo of your branch manager.

Once you’ve got these basics in place, consider making your page more useful with additional information. List the features and services unique to this bank branch like an ATM, drive-thru banking and lenders on site. Also consider providing the names and contact information for additional lead employees like lenders, VPs, managers, and customer service representatives. This will direct customers to the service they need. For more tips on maximizing your branch location page, see our article  SEO Best Practices for Branch Location Pages .

2. Local Listings

Once you’ve created a Branch Location Page, it’s time to optimize your presence on the web. Set up listings for your new branch on Google My Business (aka Google Business Profile), Bing Places, and Yelp. You may be hesitant to go through the rigmarole of claiming these profiles and fully optimizing these pages. But consider the benefits: for each listing that you optimize, you’re providing one more way for a potential customer to find you in the search engines!

Optimize each listing by claiming the business and providing as much information as possible including:

• Branch description : Each local listing platform allows you to provide a description of your business. Write about your history, the products you offer, your impact on the community, how you help individuals and businesses in your area, etc. This is your chance to help potential customers understand why you’re different from your competitors, so make the most of this content! Also, keep in mind that each description should be unique, even if you find a new way to say the same thing for each listing.
• Contact information & hours of operation:  It’s up to you to make sure the information on these sites is correct. Outdated addresses, operating hours, phone numbers, photos, and website links will thwart a potential customer’s efforts to find you. More information about navigating this process, specifically on Facebook, can be found  here .
• Images : Include a high-quality image of your branch, photos of your staff and a high-resolution copy of your logo.
• Website link : A link back to your website using a https:// address. If you have individual pages for each of your branches (you should), then this link should lead to the corresponding branch page on your website. You can even use UTMs, also known as customized URLs, to track how many visitors you are receiving from these listings!
• Google My Business posts:  Google My Business (GMB) now allows users to create a post that will show alongside the listing. GMB posts have a lifetime of about one week, which is good for upcoming events. If you want to promote the event for an extended period, consider a series of posts with a different one each week, leading up to the main event. GMB posts can have up to 10 photos or videos.

3. Facebook Marketing

As the opening date for your new bank branch approaches, Facebook is going to be one of your most powerful promotional outlets. You’re probably already promoting the event on each of your branches’ Facebook pages, which is a great way to reach a local audience at no cost. You can take this one step further by creating a Facebook Event page for your grand opening. This helps you reach additional users by inviting them to the event, create buzz, promote your business, and build relationships with customers. Maximize the effectiveness of your Facebook event page with these tips:

• Give your event a catchy name, thorough description and end time.
• Pair it with an interesting photo.
• Fill the tags section with relevant keywords.
• Make the wall public and reply to all questions and comments.
• Start a countdown and pin it to the top of your wall.
• Post the event across your other Facebook profiles.

If you have a budget for digital advertising, you may also want to consider running some ads. Facebook offers sophisticated audience targeting features that will allow you to place your branch opening promotion in front of potential customers who may be unfamiliar with your bank. Create some custom ad images with relevant information, decide on a budget, create a customized audience that you’d like to reach, and run the ads within a certain timeframe. You might want to target customers within a certain radius of the new branch or Facebook users who have “liked” your bank’s page. Don’t have the time to setup laser-targeted PPC ads on Facebook? Consider using a Boosted Post to generate interest in your branch opening.

4. LinkedIn Marketing

Don’t forget about your business clients. You can now create events on LinkedIn . Not only is this a great tool to find and promote your event, but you can also use the LinkedIn events feature to find and build communities and grow your business network. Organizers and attendees can send invitations to their connections and invite them to attend. Members who accept the event invitation will have access to a list of LinkedIn members attending the event. Attendees can participate in discussions with each other by posting and joining conversations in the event feed. This will allow you to interact with attendees prior to the event and get some insight into their expectations.

As with Facebook, you may want to consider promoting your event online, whether through paid ads or simply posting to your timeline and business page promoting the branch opening.

5. Google Ads

Google’s advertising platform ( Google Ads ) is a powerful tool for promoting your services, and it can also be used to promote your new branch opening. With the right targeting, PPC advertising for banks  can allow you to reach a whole new crop of potential customers to spread the word about your new bank location.

Start by writing ads that align with your goals. Tailor the message in each ad group to your intended audiences. You may want to create ads for your grand opening event, ads that inform new customers about the services you’ll be offering at the new branch, ads that promote incentives for new customers, and so on.

Create an ad group for the new location or add the new bank branch to the geo-targeting of existing campaigns. This will allow you to show your ad to individuals within your new market, increasing awareness and allowing you to target new customers.

You may even want to do some research and identify competitors with branches in the area of your new location. Once you have a list of your competitors, set up region-specific ad groups that target your competitors as keywords. This will allow you to show ads in Google whenever someone performs a search for one of these competitors. This strategy might win you customers who are looking to switch banks, especially if your new branch is offering incentives for new customers.

Want to let your current customers know about your new location? Google Ads offers remarketing campaigns, which allows you to show ads to individuals who have visited your site in the past. Set up a remarketing campaign for website visitors who login to your online banking portal but live in a close proximity to the new branch. Once they know about the new, more convenient location they may be more inclined to visit your branch in person for their banking needs!

6. Content Marketing

The content on your website is a  powerful marketing tool for banks  because it allows you to rank for geo-specific and relevant keywords in the search engine results pages, which in turn brings new visitors to your website. When properly utilized, content can also be a great way to spread the word about your new branch location and promote an upcoming event.

Write some high-quality content on the blog or news section of your website about the new location (and yes, your bank needs to blog ). This content should be totally unique (like all the content that you write for your website) and should cover the services your new branch offers, how it benefits the community, which towns, cities or counties you’ll be serving, the reason for the new location, and so on.

You can go one step further and create a short video clip featuring your bank and a staff member, covering the same points as you would in an article. Most of the videos on YouTube, and other social media sites are shot with smartphone cameras. There is nothing wrong with using a smartphone to create your bank’s promotional videos. Camera phone videos have become the norm so much that lighting kits for phone cameras are available in more stores.

Don’t forget to take video at the actual event to share on social media when the festivities are over. Post-event promotion continues to be effective to further highlight the new location and bank brand.

Promote the article or video on social media and create a link to the content on the homepage of your website. If you have any events, such as a grand opening, contests, giveaways, free food, or other promotions, be sure to mention these as well.

7. Email Marketing

Email marketing remains a useful marketing tool, with  73% of companies  rating it as ‘excellent’ to ‘good’ in terms of ROI. Don’t forget to send your existing customers who live nearby an email blast informing them of the new branch opening.

Make sure to include the event opening info in your email signature to further help communicate the grand opening. You can always modify this message after the event is over.

8. Traditional Marketing & Local Promotion

Sometimes customers aren’t looking for a new bank. In this case, getting your name out the old-fashioned way is the best way to generate interest. While the internet may provide the broadest reach for your bank promotion, a local offline presence can catch the attention of your new community and generate excitement. Get your name out to the community with local radio ads and billboards. Sponsor a local sports team or event. Try connecting with nearby schools and colleges to promote financial literacy.

9. Transactional & Direct Mail

Create eye-catching postcards and mailers to announce the branch opening and any promotions that you may be running in tandem with the opening. Direct mail isn’t cheap, but you can save money on postage by using smaller postcards (4 1/4″ x 6″) or by taking advantage of the USPS  EDDM  (every door direct mail) program. For existing customers located nearby your new branch, add inserts or onserts to their monthly statements . Tracking methods can be implemented to inform your branch marketing efforts and accurately measure ROI; click here to learn more about Digital Tactics for Measuring Traditional Bank Marketing .

10. Grand Opening

As you plan your branch opening event, don’t forget these important attention-grabbers:

• Place clear signage at the new location announcing the opening date.
• Offer an open house for prospective customers to learn more about your services.
• Provide entertainment and food.
• Offer door prizes, contests, giveaways, and perks.
• Operate sweepstakes and raffles

Take the next step towards a successful new location

Will your new community see you coming? When you open a bank branch, you need marketing expertise that will maximize the opportunities a new location brings. Whether you need help updating your local listings, improving content, effectively targeting your online ads, or promoting your opening event, BankBound has the expertise to help financial institutions through every stage of marketing. If you have plans to open a new bank branch location,  contact us today  to learn how we can help you with this and all of your marketing needs.

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How to launch a new business: Three approaches that work

COVID-19 and its ongoing repercussions have forced business leaders to reevaluate their priorities and strategies. One area where businesses across all regions have accelerated their commitments is around building new businesses. Leading growth businesses in particular have made this strategy a top priority, according to recent McKinsey research .

About the authors

This article was a collaborative effort by Ralf Dreischmeier , Philipp Hillenbrand , Jerome Königsfeld , Ari Libarikian , and Lukas Salomon, representing views from Leap by McKinsey, McKinsey’s business-building practice.

Yet despite the growing enthusiasm for business building, incumbents with good ideas, strong commitments, and big ambitions will frequently run headlong into a big question: How do we actually go about building a business? Getting the answer to this question right is crucial because it shapes the entire operating model of the business-building venture, with significant implications in terms of budget, organization, and strategic direction.

A leading industrial company learned this at a cost. When executives wanted to optimize operations in their factories, they believed setting up a fully independent start-up dedicated to developing new factory concepts was the only way to make it happen. Despite millions of dollars of investment, however, it didn’t work. The start-up struggled to access data and insights, failed to fully grasp the challenges of the core business, and did not attain sufficient support in the parent organization to test and implement changes. This example supports our research, which shows that fewer than a quarter of businesses launched ten years ago are viable large-scale enterprises today .

Figuring out the right approach to business building is especially important now as new opportunities for innovation surface. Prompted by the pandemic, new business-building archetypes have emerged, such as remote service provision, digital retail, and collaboration platforms.

As is true for many complex undertakings, there is no single right approach for launching a new business successfully. In addition, certain strategies will be important no matter which approach a company takes. Joint ventures and alliances, for example, can help to reach scale and enter new markets, and working with partners in ecosystems that, in some cases, include erstwhile competitors can expand offerings, access capabilities, and accelerate scale.

After analyzing more than 200 corporate business builds that we have supported, we have identified three major approaches that have proven successful. While other approaches can certainly work, the three we explore in this article have an established track record and clear conditions for success. The characteristics of each are unique, and so, too, are the criteria and conditions for success (Exhibit 1).

Would you like to learn more about Leap , our business-building practice?

1. internal vc-like incubator.

In this approach, incumbents develop a broad portfolio of ideas, with the goal of producing a few winners that can be successfully commercialized. Teams within the parent organization develop concepts for new businesses and pitch them to a dedicated venture-capital-style board comprising internal and external experts, who select the most promising ones. Successful teams receive milestone-based funding and resources to validate core assumptions and develop a minimum viable product (MVP)—a crucial governance necessity no matter what approach a business chooses (Exhibit 2).

The business has to be vigilant to ensure that the start-up culture “sticks” and that the legacy corporate culture doesn’t slowly start to take over. One way to do that is to assign an experienced business-building coach to each team to build up and nurture an agile test-and-learn culture.

Establishing an incubation approach is particularly suitable for incumbents that have a clear overall sense of the future direction of their business and sector, as well as a strong pipeline of promising early-stage ideas. They may, however, lack initial certainty on what the “winning concepts” will be and how they should be set up for the long term—as an internal division or an external spinout, for example. In our experience, the internal incubation approach works best when the new business is expected to focus on the parent’s core business.

A leading consumer food company achieved great success with this internal incubation approach. After a successful restructuring program, the company’s CEO and board first set a clear vision and ambition that new ventures should primarily benefit the core business and enable significant improvements in the top and bottom lines. Management then invited employees to form small teams that included a team lead and a management sponsor, such as the division head.

Over the course of six weeks, these teams then independently developed more than 100 ideas for new businesses aligned with the overall strategy. All teams scoped out MVPs and pitched their concepts to a newly created internal venture-capital (VC) board that included senior managers, external venture capitalists and technologists, sector experts, and strategic customers.

The VC board then provided initial funding to ten concepts that covered a wide range of applications, including IoT devices, process automation, data platforms, and resourcing marketplaces. Key decision criteria were resources required, path to scale, time to impact, expected overall P&L impact, and unique advantages of the parent company that could be leveraged to build the new businesses. Each initiative was assigned a delivery lead, an experienced business-building coach who helped employees to identify and de-risk the core assumptions first .

Over the course of the next six to ten weeks, these teams built out their MVPs to test core assumptions, such as market demand, required investment, and potential to scale. Those that were successful then approached the VC board and business-unit leadership for additional resources to scale the MVP. Within 16 months, the program to incubate the new businesses became self-funding.

Key success factors

• Adopt a true VC mindset, and kill ideas without clear potential early on in order to cut losses and strengthen the organization’s focus and resources on concepts with high potential.
• Include external experts on your VC board to increase objectivity and add important new perspectives.
• Match venture teams with experienced delivery leads to provide crucial coaching and skill building to test and adapt quickly.

2. Scale-up factory

Frequently, an incumbent organization already has a strong pipeline of new-product and -business concepts that have been validated with first customers and partners. But because it lacks the specialized resources, talent, and expertise required to quickly and successfully scale an entirely new business, promising ideas wither.

A scale-up-factory approach can help address these issues. In this model, the parent sets up a fully owned “factory” that is exclusively dedicated to rapidly scaling promising concepts from the parent’s R&D pipeline into independent businesses. Typically, with this approach, the parent is the first and largest customer of the new businesses. In return, the factory’s new businesses can leverage the parent’s brand, reputation, and customer network. Importantly, providing employees with equity gives them “skin in the game” and helps attract and retain the best digital talent from start-ups and tech firms.

Despite a strong R&D pipeline, new ideas at a leading global energy player frequently did not reach sufficient scale to generate meaningful new revenue streams. To change this, the company used the scale-up-factory approach to address a key business goal: build and scale disruptive technologies and business models from the internal R&D into rapidly growing and revenue-generating businesses.

The new scale-up factory is located in a separate office and staffed with a dedicated team, most of whom were hired to meet the need for specialized skills and a “start-up mindset.” The new company is governed by its own leadership and a dedicated, internal board of directors, rather than by business-unit leaders. While senior group leaders dedicate significant time to strategic decision making and steering toward targets and milestones, they do not get involved in the scale-up factory’s day-to-day decision making.

After two years, the businesses developed by the scale-up factory have scaled to more than 100 employees and have already become a significant revenue-growth motor for the parent company.

• A strong pipeline of “potential blockbuster” ideas within the parent company that have been validated and deemed commercially viable
• Clear funding and governance to establish accountability for each project that has business-unit and factory representation, remove any ambiguity in approvals and funding (such as joint signatures between factory and business unit), and align up front on milestones for the release of further funding
• Strong learning and pattern-recognition processes —the more scale-ups the factory executes, and the better team members become at collecting and codifying learnings, the more efficient the factory’s processes will become (a key insight from our latest research )

Why business building is the new priority for growth

3. ‘clean slate’ business building.

In some cases, executives have identified a big, promising idea for a new business well beyond their organization’s core focus, such as leveraging a disruptive new technology or entering a new industry. In this case, a clean-slate approach works best, with the new business typically fully owned by the incumbent (or jointly owned with external investors) and all talent hired externally.

Similar to the scale-up factory, the new start-up enjoys organizational independence but has greater entrepreneurial latitude. Speed is more important than process perfection in areas such as HR, IT, and procurement. The new business develops its own tech stack, for example, and explores different business models, even working with traditional competitors. It has different compensation and hiring models than the parent company, as well as its own R&D and insights capability to aggressively test completely new markets. Incumbents that have been successful in driving growth via clean-slate business building often start to shift to adapting principles of the scale-up-factory approach described in the previous section.

“Acqui-hiring” talent (that is, hiring an entire team or acquiring a company to access its talent) can be used to turbocharge business builds in any of the three approaches outlined in this article, but it is particularly suitable for accelerating clean-slate builds when internal capabilities are limited. Acqui-hires provide incumbents with immediate access to a well-integrated team with relevant capabilities who can hit the ground running.

Acqui-hiring can work only if the new venture has a strong culture that can quickly and successfully integrate the acqui-hired team. Clear leadership communication and strong alignment of incentives—such as equity awards distributed to all members of the business-building team—are critical to bringing the new team on board and avoiding potential resentment from members from the incumbent organization.

Using a clean-slate approach enabled one of the world’s leading engineering companies to quickly build a highly innovative IoT platform to sell software through an app store. Initial testing had validated the concept, which also had strong support from top management. Given the need to move quickly and lacking the right talent internally, the company set up a new start-up with strong financial backing, a separate office several hundred miles away from parent-company headquarters, and a leadership team hired from leading technology players.

Senior executives from the parent organization narrowed down the catalog of more than 1,000 rules, regulations, and governance processes that new divisions were typically required to implement to only about 50 that were essential. To establish the new business’s neutrality, the company set up a new industry alliance and collaborated with external partners—some of them direct competitors of the parent company—from day one.

To further accelerate this process, the company decided against gradually hiring developers or retraining staff. Instead, it acqui-hired a full development team of more than 30 people from a major software producer. This approach enabled the building of a highly complex digital solution and a thriving ecosystem with dozens of partners at record speed: first sales were generated less than 15 months after the acqui-hire had been completed.

• Strong focus on culture through strong investment in regular team-building activities that are crucial to integrate teams and unite them behind a common goal
• Foundations for an ecosystem of partners built early on by engaging with external partners—even competitors—as soon as the new business is set up, so that the market perceives it as a neutral player; then build out a large-scale ecosystem over time
• A start-up CEO fully committed to the new venture, through incentives (equity, bonus structure, and so on) that are fully tied to the start-up’s fortunes and do not include a “safety net” in the form of guaranteed continued employment with the parent

Business building is increasingly a core strategic pillar for companies operating in a digital world. Selecting the approach that is right for any given business, based on an understanding of the necessary trade-offs, conditions, and criteria for success, is one of the most important decisions incumbents need to make, as it can unlock the opportunity for rapid growth.

Ralf Dreischmeier is a senior partner in McKinsey’s London office; Philipp Hillenbrand is a partner in the Berlin office; Jerome Königsfeld is an associate partner in the Cologne office; and Ari Libarikian is a senior partner in the New York office, where  Lukas Salomon  is a consultant.

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Related articles.

Scale or fail: How incumbents can industrialize new-business building

Derisking corporate business launches: Five steps to overcome the most common pitfalls

Innovating from necessity: The business-building imperative in the current crisis

By BCG Attorney Search

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A Marketer’s Guide to Branch Planning

When was the last time you, as a bank marketer, visited a branch? Do you know what the branch managers are doing on the front lines every day to market the bank’s products and services? Have you asked for their insights on the customer experience? Or what they think about bank sales goals and marketing plans?

If you can’t remember the last time you visited a branch or talked with a branch manager…

You’ll want to finish reading this article and make an appointment to visit a branch as soon as possible. You’ll be amazed at what you learn and—if you are open to it—just how many insights and aha! moments you can have at a branch. These insights will help you build stronger value propositions, create more effective sales and cross-sell campaigns, make smarter spending decisions, and understand better what your customers really think of your bank.

You might be thinking that’s a crazy idea. Branch traffic is down, after all, and the number of U.S. bank branches is in decline. But consider these three things:

• About half of new customers still choose a bank based on branch location.
• Over half of new checking account sales occur in the branch channel.
• For most banks, branches remain the most critical channel for delivering essential customer interactions and experiences.

Digital channels have not outmoded personal advice, guidance, or even certain transactions for many people—including millennials. This is especially true when it comes to big-ticket credit and investment decisions. Customer experience is about using all channels in a seamless way, including the branch.

Don’t assume branches are going away. Assume instead that you can help your branch managers find a better, more productive use of the branch space.

You’ve heard of banks reconfiguring branches or using extra branch space as a yoga studio, a community meeting space, or a coffee bar with free Wifi. Of course, it may not be logical or practical to turn every branch into the neighborhood coffee bar. The point is to identify the particular features most needed in each specific branch location. That could mean:

• Work space for independent contributors—especially sole proprietors and small businesses—with secure Wifi and a quiet work environment
• Small, hyper-efficient transaction zones—dedicated to high volume, digitally-oriented activity
• Credit and lending answer centers staffed by knowledgeable advisors

These innovative ideas have the potential to bring more people into the branches for a specific purpose, utilize the space in a more cost-effective and profitable way, and introduce your brand to people who may not have considered your bank for their financial needs. Now, maybe they will.

Overcoming the consistency conundrum.

For years being a mass market retailer has meant consistency—an idea that has manifested as a cookie cutter approach to branches, offering all branch capabilities in all locations. The underlying philosophy was that every branch had to be all things to all people. But by sharing and analyzing better data from customer channel usage and branch traffic, we can challenge that philosophy and create branches that cater to the needs of the neighborhood.

At many institutions, bank management sets branch-level sales and retention goals from their offices. And in many cases, goals are based solely on historic performance—without real knowledge of what’s happening in the branches. As we’ve seen, this can lead to overly-aggressive behavior and poor sales protocols. Perhaps we’ve been looking at this all wrong. Perhaps we should be supporting each branch manager, and looking at each branch as an independent small business.

Here’s how to build a plan for branch success from the ground up, based on the knowledge we use in marketing every day.

Apply market opportunity analytics.

• Determine whether market households and businesses are growing or shrinking in your bank’s geographies.
• Identify which consumer and business segments are large and growing—and which are small and decreasing in size.
• Assess what the branch manager knows about his or her neighborhood. Which Main Street businesses are opening/closing? Are home values increasing or decreasing? What about shifts in the local workforce, unemployment trends, and product inquiries and sales?
• Realize that micro-trends could be one of the keys to success for the branch of the future. The branch manager is probably in the best position to know what’s happening in their neighborhood—and can help the bank capitalize on micro-trends and happenings.

Define bank strategy and value proposition.

• Ensure there is a clearly articulated and differentiated value proposition that every bank employee can understand and communicate to customers and prospects.
• Utilize the value proposition as ‘guide rails’ for assisting branch managers in creating and prioritizing sales and marketing plans.

Measure branch transaction trends.

• Provide branch managers with a consistent set of key performance metrics and a performance dashboard so that they can see how they are doing against their own plan—and that of other branch managers.
• Don’t forget that some of the most important performance metrics include omni-channel transaction and product usage patterns of customers domiciled in the branch, in addition to sales and customer retention stats.

Understand branch performance relative to peers.

• Work with branch managers to conduct a strategic assessment of market and branch analytics. Perhaps some branches should be targeting cost savings and efficiencies while others should be hotbeds of sales and new customer acquisition.
• Set appropriate goals for the appropriate branch by providing context, such as market and branch performance rankings. This allows the marketing team and senior management to help guide the direction of each branch plan. And it sets each branch manager up for success.

Devise appropriate marketing and sales programs.

• Define branch-specific marketing and sales campaigns to fuel new-to-bank acquisition and raise awareness among key segments.
• Provide calling lists of prospects, informed by branch goals, segmentation strategy, and analytics.
• Design product bundles and communication standards that help managers to easily sell new products and upsell existing customer relationships.

You have an abundance of data that could help branch managers better understand their own small business.

But marketers aren’t always so good at sharing data with the front line. What if everyone in the organization could benefit from the huge trove of data being collected, so that across your network, branch managers are looking at consistent data? How cool it would be to have something analogous to a Google Analytics dashboard for every branch?

Branch managers would likely use the data to make decisions in diverse ways, and that’s the point. That’s because different branches should have different strategic directions, which might include:

• Targeting efficiencies
• Maintaining the base
• Accelerating new-to-bank acquisition

Using data on a branch’s current and past performance, customer base, and potential of the market, each branch manager can create an informed plan for success.

Given the option to either close a branch or find a better way to utilize the space…

Branch managers often become extremely resourceful in suggesting creative ways to maintain branches and jobs. That’s because they understand the importance of their branch to the local community. And with guidance, they can create a business plan that ensures a level of profitability and the continued ability to contribute to a vibrant local community.

Branch managers have to know bank regulations, operations, financial product sets for consumers and businesses, security measures, and sales practices.  Simultaneously, they need to manage and motivate a team of people while also being great at customer service and relationship management. That’s one tall order. As banks increasingly embrace the capabilities that digital innovations bring to the customer experience, why not capitalize on the knowledge of your branch managers to help create your version of the bank of the future?

Or, at the very least, get their help in understanding options to make their branch and your marketing programs the best they can be.

If there is branch downstairs in your building, I challenge you to take a walk down there right now and introduce yourself to the branch manager. Make an appointment to grab lunch together—if they can spare the time—then spend an hour or two observing what happens in the branch. Observe the operation, the customers and the transactions. Then think about how your bank could make every customer experience better and what impact your findings have on how you do your job.

You might be surprised at your findings.

Mary Ellen Georgas is an experienced banking industry consultant and firm leader at Capital Performance Group, LLC , providing strategy, marketing, and digital channel consulting services to the financial services industry. Email: [email protected] .

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Business plan, how to write a business plan for a small businesses and checklist.

It is important for you to have a Business Plan before you venture into a business or even if you are already in business. A Business Plan will help you to describe your business, the nature of your business, what differentiate your products / services better than your competitors or the state of your financial status. In short, Business Plan provides background information about the business and the owner and the teams in planning their goal and how they will achieve those goals.

A business plan refers to a written document that comprehensively outlines what your business is, where it is going, and how it will get there. The business plan outlines in specific terms the financial objectives of your business, and how it will position itself to achieve those goals in the context of the current market environment. In addition, the business plan is an indispensable tool to attract business capital.  Click to this  link to see the outline on how to create one step-by-step and please ensure relevant copies of documents are attached to the business planning to ensure that the application could be processed accordingly.

Source: SME Corp. Malaysia

“Business Plan is not only for start-up but it is also essential for existing business to identify the growth of the business or simply to update it, so that you can solicit new funding for business expansion or merely for reviewing purposes.”