So the economy is down, everyone is staying home, and we have the nerve to talk to you about building a tangible, structure, operational bank. Before we get started let's take a step bank and understand we're not talking about a monumental financial institution like a Chase, Citibank, or even Municipal credit union. Everyone has to start somewhere. Even the formerly mentioned behemoths, took decades if not centuries to become what they are now.
This article is about igniting an entrepreneurial spirit that could do wonders for your community.
Step 1 - Research/Plan - Why do you want to build a bank?
- What will make your bank different?
- Who will be your target borrowers & investments?
- Why should clients want to open an account with you
versus bigger, more traditional banks?
- What will you charge borrowers in interest?
- Think about profit & losses and what it will take to cost
- Be realistic in your forecast. How much do you expect to
bring in month to month.
- What will be the Bank's name and logo.
Step 2 - Be strategic in becoming a legal entity.
- If you haven't won the lottery, and don't have $12 - $20
Million to spare this won't be a one man
operation. Which leads us to one of three options.
Corporations, DBA, or our suggestion - LLC. (If you do
have the funds (give us a call - lol) and the
best form for you would be a sole proprietorship.)
Step 3 - Inform your state and local government.and apply for an EIN.
Step 4 - Setup a business credit card (or unsecured credit card) with a bigger bank.
Step 5 - Setup up your team and prepare to offer equity.
- No one works for free, and if you don't have the funds to
keep teammates motivated to work, offering shares and
reminding them this is their bank too.
- Find a partner that can handle:
Step 6 - Get the right permits and licenses in order to operate a bank
Step 7 - Get FDIC insured
- The FDIC protects you and your clients.
Step 8 - HUSTLE
- Start a website as an online bank.
- Start with 1 financial product - Checking accounts!
- Be clear and concise in what you will charge for checking accounts.
- Gather funds in exchange for shares in the bank.
- This isn't going to be easy, but it will show how badly you want this bank
- I suggest knocking on doors, stopping people in the street and even going
as low as a $1 a share to reach start up funds.
- Select an initial investment.
- Start local, be smart.
- An investment you can be sure will succeed.
- A barbershop/Salon.
- Grocery store.
Step 9 - Win - If you've reached this point, it's time to grow your banks products
- If the local investment is performing well you have the option to
grow to the other standard financial product - Saving accounts.
- Be competitive in your interest rates to accelerate growth.
- Buy ads or use social media to promote your online bank.
Step 10 - Keep Winning!
Sat. June, 27th 2020
By F r e e Q u i n c y