Thinking about opening a savings and loan associations business? We tell you what you need to know to get started.
Savings & Loan Association Fundamentals
These days, savings and loan associations are much more complicated than the Bailey Building & Loan Association featured in It's A Wonderful Life. Starting a savings and loan association is no small endeavor. Yet in the right market, the launch of a savings and loan association can provide a much-needed service for local residents and deliver steady profits to its owners.
Originally, savings and loans were designed to be depository vehicles that loaned their deposits for long-term real estate purchases. Over time, the nature of savings and loans have changed to include a broader scope of financial services.
Today, savings and loan associations are regulated by the Office of Thrift Supervision, a division of the U.S. Department of the Treasury. As a prospective savings and loan startup entrepreneur, you will need to interface with the OTS to navigate the application process and comply with corporate governance guidelines.
Funding a Savings & Loan Startup
Although S&L's are founded on the premise of lending depositors' money, startup associations require significant amounts of upfront capital for reserves, facilities, staffing, security and countless other upfront costs. It's unlikely that you will be able to secure adequate startup funding from a single source, so you will need to apply a range of strategies to attract investors to your cause.
- Strategic Investors. Other companies and business interests may have valid reasons for investing in your savings and loan association. These companies are known as strategic investors and they often bring expertise or industry contacts to the table in addition to financial resources.
- Venture Capitalists. Venture capital or equity financing can be another effective way to fund a new savings and loan association. Securing venture capital isn't easy. But the upside is that venture capitalists often become valuable partners who can assist in the growth and expansion of your association.
- Institutional Financing. It sounds strange, but it's possible to borrow startup funds in order to make loans to other people. As a form of margin lending, you'll need to make sure institutional financing rates are attractive enough to allow you to earn a profit from your lending activities.
Best Practices for Savings & Loan Associations Company Business Plans
The process of writing a business plan for your savings and loan associations business can be grueling. If it's comprehensive and well-written, however, your business plan will serve as a strategic anchor point and a calling card for external stakeholders.
After you have written you plan, you'll also need to develop a strategy for your next steps.
A business plan distribution strategy represents the backend of your business planning requirements. Generally, effective distribution models include the incorporation of tracking systems into the company's startup plan.
Prior to launching a savings and loan associations business in your town, it's a smart move to see how strong the competition is. Try our link below to find competitors near you. Simply enter your city, state and zip code to get a list of savings and loan associations businesses in your town.
Before you open up shop, make sure you know what you will offer to your customers that provides a significant advantage over your competition's offering.
Learning More About the Industry
If you want to open a savings and loan associations business it's essential that you learn from folks who are already in business. If you think owners of nearby savings and loan associations businesses will give you advice, think again. What's in it for them?
But, a person who owns a savings and loan associations business in a different city will be much more likely to talk with you, as long as they don't view you as a competitive threat. Indeed, many experienced entrepreneurs enjoy offering advice to startup entrepreneurs. It can take a while to find an entrepreneur who is willing to talk, but it's well worth the effort.
Where can you find somebody who runs a savings and loan associations business on the other side of the country to talk to?
Simple. Let your fingers do the walking by using the link below.
Leveraging the Branding Benefits of a Savings & Loan Associations Business Acquisition
Startup savings and loan associations businesses typically suffer when it comes to brand recognition because unlike entrenched competitors, new brands lack visibility and history with their customers.
To compensate, one of the techniques entrepreneurs use is to buy a business to get an established brand. In the hands of marketing professionals, the process for creating brand awareness is still long and gruelling.
But by buying a savings and loan associations business that already has a strong brand identity, you can shorten the time requirements and reap brand benefits from the beginning of your ownership career.
Consider Buying a Franchise
As an entrepreneur, your chances growing your business are much greater if you buy a franchise rather than going it alone.
Prior to starting a savings and loan associations business, you may want to determine whether purchasing a franchise might make your life much easier.
The link below gives you access to our franchise directory so you can see if there's a franchise opportunity for you. You might even find something that points you in a completely different direction.
These additional resources regarding starting a business may be of interest to you.
If you already are in business and came here to learn about growing an existing savings and loan associations business, these resources will come in handy:
If you sell to savings and loan associations businesses, this isn't the right place for you. These resources are more appropriate for you:
If you are interested in starting a different kind of business, please browse our directory of guides below.