How to Draft a Business Plan for a Credit Union

Credit unions have become a profitable business for many reasons. One of them is that they seem more humane than nationwide banks with franchise-style branches. Nevertheless, opening a credit union business requires the drafting of a business plan. This plan will be a valuable tool in making proposals to bankers, investors, sponsors and government institutions. A solid business plan will keep ideas clear regarding the direction and objectives of your credit union enterprise.

Instructions

1. Write your mission and vision statements in one paragraph. Since credit unions are directed toward a specific niche, you should take that into consideration. For example, you could have a credit union for veteran sailors. The idea is to summarize your business plan in one paragraph. That way you will know exactly what it is you want, and how you plan to accomplish it.

2. Write your table of contents, taking into consideration all of these elements: executive summary of your business; business description of what financial services you will offer; market strategies regarding how to reach your niche; competitive analysis of other credit unions in your area; design and development plan stating what resources and time you will need to put your business into operation; operations and management plans that include who will be the president, managers and credit union officers; and financial components that include funding, cash flow and financial projections taking into consideration that your sources of revenue will come from fees applied to savings, loans and investments.

3. Research each of these elements thoroughly. Pay close attention to local, state and federal regulations and permits needed to open a credit union in your area. Consult with FDIC and IRS regulations, as well. Stay updated on the latest trends in investing, so your business plan is as current as possible.

4. Download a free business template. These are widely available on the Internet or can be found in your local library.

5. Replace the data from the template with your own data and analysis. Make sure that information pertaining to the stock market and other types of investments are as up to date as possible. Check that your financial projections meet the expectations of a dynamic market.

Tips & Warnings

• A business plan shouldn't be longer than 20 pages. That's the ideal length to effectively describe your business in a clear, concise and direct manner. Research federal grants, especially if you're catering to a specific group in the population, such as minorities, women or veterans.

References

• Entrepreneur: How to Create a Business Plan