8/2/2019 A Winning Business Plan
1/21
Branch Business Planning
System
Author
Sohailuddin ALAVIInternational Training Adviser, AIBF
(Consultant and Instructor in Management)
March 2012
8/2/2019 A Winning Business Plan
2/21
Contents
1. Executive Summary ................................................................................................. 1
Section Two: Role of your branch in the overall management of the Bank value .......... 2
Section Three: Corporate Directions and the Branch mission statement ....................... 3
Section 4: Branch SWOT and Competition Analysis ...................................................... 4
Section 5: Branch Performance Goals, Objectives and Indicators .................................. 6
N.B. Refer to appendix for reviewing assumptions and detailed workingSection Six:
Action Plan .................................................................................................................. 8
Section Six: Action Plan ............................................................................................... 9
Building Customer Focus .................................................................................................... 9
Corporate Customers ............................................................................................................... 9
Retail Customers .................................................................................................................... 10
Walk-in Customers ................................................................................................................. 10
Corporate Customers ............................................................................................................. 11
Retail Customers .................................................................................................................... 11
Walk-in Customers ................................................................................................................. 11
Competitive Analysis .............................................................................................................. 12
Marketing Strategy (Mix) ....................................................................................................... 13
Enabling Objectives ................................................................................................................ 13
Organization and Human Resources Development ............................................................. 14
Organization Structure ........................................................................................................... 14
Position wise Performance Management Plan ...................................................................... 15
Employee Rotation, Training, and Development Plan ........................................................... 16
Risks and their Mitigates ........................................................................................... 17
Appendix I ................................................................................................................. 18
Assumptions: - .................................................................................................................. 18
Projections Worksheet ...................................................................................................... 19
8/2/2019 A Winning Business Plan
3/21
1 Afghanistan Institute of Banking and Finance (Author Sohailuddin ALAVI) March 2012
Business Planning Workbook
1. Section One: Executive Summary
(This section presents a synopsis of the entire business plan. It should be written in
essay format).
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
8/2/2019 A Winning Business Plan
4/21
2 Afghanistan Institute of Banking and Finance (Author Sohailuddin ALAVI) March 2012
Business Planning Workbook
Section Two: Role of your branch in the overall management of the Bank value
As Strategic Business Link between the bankand its constituents define your branchs
role in the overall management of Banks Value:
To describe the role of your branch in the overall value management of the bank. Beginby answering the following question:
What is the role of your branch in the overall profit function of the bank? For instance atypical branch ideally operates as a strategic link for:- Quality customer prospecting and retention- Mobilizing quality deposits- Selling quality credits- Selling other financial services
- Building and sustaining bank image
It is not necessary that your branch can perform all activities in a profitable manner.Therefore you should only focus on what your branch can do in a profitable manner.
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
8/2/2019 A Winning Business Plan
5/21
3 Afghanistan Institute of Banking and Finance (Author Sohailuddin ALAVI) March 2012
Business Planning Workbook
Section Three: Corporate Directions and the Branch mission statement
3.1 The Corporate DirectionsCorporate direction is a broad level commitment and strategies of the seniormanagement in terms of where they wish to take the bank in future. This statement ofintent should be considered by the branches, to gear their business planning in thedirection the bank wants to move. Branch planning in isolation is likely to jeopardize theharmony of directions critical for the overall success of the organization
Exemplified Corporate Directions: -The bank aims to accomplish the followings Increase profitability (RoE) through bettermanagement of financial assets and liabilities; improved customer focus; increasedmarket share; operational efficiency; better internal controls; enhanced regulatorycompliance; lower cost of operations; and, professionalism...
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
3.2Branch Mission StatementA mission statement is a broad level description of what the branch intends to
accomplish and how will it accomplish it? It therefore consists of two segments, namely;the goals [impact] that are to be accomplished, and the strategies [means] whereby thegoals will be accomplished.
Exemplified Mission Statement: -Being an extension of the bank, we shall improve our market share and profitabilitythrough differentiated financial services; building customer loyalties; focusing oncustomer relationship management; improving employees work performance;continuously increasing operating efficiencies; and, last but not the least minimizing the
risks
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
8/2/2019 A Winning Business Plan
6/21
4 Afghanistan Institute of Banking and Finance (Author Sohailuddin ALAVI) March 2012
Business Planning Workbook
Section 4: Branch SWOT and Competition Analysis
4.1 SWOT Analysis
The focus of SWOT analysis is on unraveling the opportunities and challenges (threats)in the permeable external environment; and, strengths and opportunities in of theorganization. The analysis is essentially made with reference to the Mission Statement.Meaning, external factors are neither opportunities nor threats unless these are analyzedin the context of accomplishing the mission statement and so are internal characteristicsof the organization.
Strength refers to an internal characteristic that enables the organization to realize itsgoals in an effective and efficient manner, while weakness is the characteristic that islikely to hinder effective and efficient accomplishment of goals. For instance, highdeposit base could be strength for the branch (bank) if there is sufficient demand for
loans from good borrowers. However, it can turn into weakness if the weighted averagecost of the deposits is higher than what the branch could earn on loans.
External factors, which are likely to increase business potentials for the branch, aretermed as opportunities. For instance; credit culture, saving habits, etc. However;existence of too many branches in a close proximity, bank avert attitudes, etc. are likelyto posse significant challenges (threat) for the branch in realizing its goals.
Please identify Strengths; Weaknesses; Opportunities; and, Threats faced by yourbranch
Strengths Weaknesses
Continued on next page
8/2/2019 A Winning Business Plan
7/21
5 Afghanistan Institute of Banking and Finance (Author Sohailuddin ALAVI) March 2012
Business Planning Workbook
Opportunities Challenges (Threats)
4.2 SWOT Recap:Make a conclusive summary of the SWOT-Analysis to aid formulating the branchperformance goals, objectives and indicators realistically...
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
8/2/2019 A Winning Business Plan
8/21
6 Afghanistan Institute of Banking and Finance (Author Sohailuddin ALAVI) March 2012
Business Planning Workbook
Section 5: Branch Performance Goals, Objectives and Indicators
5.1 Goals and Objectives
Financial Goals:
- To increase branch profitability by ______%- To increase average income on loans by ______%- To increase other income by ______%- To decrease average cost of deposits by ______%- To decrease branch expenses by ______%- To reduce loan defaults by ______%- To reduce operating risks ______%
__________________________________ ______%
Business Objectives:
- To increase deposits by ______%- To increase loans by ______%- To increase other business by ______%- __________________________________ ______%
Qualitative Objectives:
- To improve customer satisfaction ________- To improve service standard ________- To improve employee performance ________- To improve branch environment ________- To improve internal controls by ________- ____________________________ ________- ____________________________ ________- ____________________________ ________- ____________________________ ________-- ____________________________ ________- ____________________________ ________
(Check [X] the appropriate objective(s). Use extra spaces to include more objectives)
8/2/2019 A Winning Business Plan
9/21
7 Afghanistan Institute of Banking and Finance (Author Sohailuddin ALAVI) March 2012
Business Planning Workbook
5.2 Performance Indicators:
Deposit (Liability Products):
Exemplified: To contain the weighted average cost of funds (deposits) @ 5% + 10 basis points:
Type of Deposit Percentage Share Cost WAC
Savings Account 30% 5% 1.5%
Short Term Deposits 20% 8% 1.6%
Long Term Deposits 20% 10% 2.0%
Current Deposits 30% Nil Nil
Total 100% 5.1%** The WAC will change if the % share of each category of deposit is altered.
Projections: Weighted average cost of funds is projected @ % + basis points
Type of Deposit Percentage Share Cost WACSavings Account
Short Term Deposits
Long Term Deposits
Current Deposits
Total
Loans and Credits (Asset Products):
Exemplified: To achieve the weighted average return on loans and credits @ 12% + 10basis points
Type of Loan Percentage Share Rate WAC
Working Capital Running Finance 30% 20% 6.0%Working Capital Term Finance 30%% 15% 4.5%
Project Loans 20% 16% 1.2%
Consumer Finance 20% Nil Nil
Total 100% 11.7%** The WAC will change if the % share of each category of deposit is altered.
Projections: Weighted average return on loans is projected @ % + basispoints
Type of Loan Percentage Share Rate WAC
Working Capital Running Finance
Working Capital Term FinanceProject Loans
Consumer Finance
Total
8/2/2019 A Winning Business Plan
10/21
8 Afghanistan Institute of Banking and Finance (Author Sohailuddin ALAVI) March 2012
Business Planning Workbook
Non Fund Based Business:
Exemplified: To earn gross revenue of Rs.125,000.00 + 10% from non fund based services
Type of Service Project RevenuePercentage
Documentary Credits 60,000.00 50%
Guarantees 30,000.00 25%
Inland Remittances 10,000.00 8.33%
Exchange Business 10,000.00 8.33%
Safe Deposit Lockers 5000.00 4.16%
Miscellaneous Services, such as UtilityBills
5000.00 4.16%
Total 120,000.00
Projections: To earn gross revenue of Rs. + % from non fund based services
Type of Service Project Revenue Percentage
Documentary Credits
Guarantees
Inland Remittances
Exchange Business
Safe Deposit Lockers
Miscellaneous Services, such as UtilityBills
Total
Others:Key Areas Expected impact/outcome
- To improve customer satisfaction ________________________________________________
- To improve service standard ________________________________________________
- To improve employee performance ________________________________________________
- To improve branch environment ________________________________________________
- To improve internal controls by ________________________________________________
- ____________________________ ________________________________________________
- ____________________________ ________________________________________________
- ____________________________ ________________________________________________
N.B. Refer to appendix for reviewing assumptions and detailed working
8/2/2019 A Winning Business Plan
11/21
9 Afghanistan Institute of Banking and Finance (Author Sohailuddin ALAVI) March 2012
Business Planning Workbook
Section Six: Action Plan
This section elaborates upon the strategies and tactics used in accomplishing the above
mentioned branch targets.
6.1Branch Marketing PlanEach customer (or group of customers) has unique needs and expectations. A branch isfaced with the challenge of satisfying different customer groups, simultaneously. Inorder to do this, it is undoubtedly essential for the branch to better understand theirvarying needs and expectation and to deal with them accordingly.
This entails a systematic planning process. It consists of building customer focus;assessing branchs competitive position and determining appropriate marketing mix.
Building Customer Focus
Example
CustomerSegment(s)
Financial Status /Preferences
Financial Needs Expectations
Entrepreneur Affluent;Comfortable Life,
Convenience,Respect.
Business LoansIntl Credit Card
Funds Management
Priority BankingPre-approved Status
Relationship
Corporate CustomersThese are businesspersons who conduct diversified business
transactions with your branch on rather continued basis. These may be your existingcustomers; potential customers; and, past customers.
CustomerSegment(s)
Financial Status /Preferences
Financial Needs Expectations
Corporate Customers
Big Entrepreneurs
SMEs
Micro Entrepreneurs
Govt./Public Offices
8/2/2019 A Winning Business Plan
12/21
10 Afghanistan Institute of Banking and Finance (Author Sohailuddin ALAVI) March 2012
Business Planning Workbook
Retail CustomersCustomers who bank with your branch for their personal financialrequirements. They maintain deposit accounts, borrow for their personal requirements,or avail of other financial services again in their personal context.
CustomerSegment(s)
Financial Status /Preferences
Financial Needs Expectations
Retail Customers
Professionals / Sr.Executives
EmployedIndividuals
House Wives
Students
Retired / SeniorCitizens
Walk-in CustomersCustomers who happen to visit your branch once in a blue moonto avail of a service, such as to purchase foreign exchange travelers cheques;remittance of funds; claim pension; and, even payment of their utility bills.
CustomerSegment(s)
Financial Status /Preferences
Financial Needs Expectations
Walk-in Customers
Core Services
Non Core Services
8/2/2019 A Winning Business Plan
13/21
11 Afghanistan Institute of Banking and Finance (Author Sohailuddin ALAVI) March 2012
Business Planning Workbook
Consolidated Customers Profile
CustomerSegment(s)
Preferred FinancialProducts and Services
Price Sensitivity(High Mod Low)
% TotalRevenue
Corporate CustomersBig Entrepreneurs
SMEs
Micro Entrepreneurs
Govt./Public Offices
Retail Customers
Professionals / Sr.Executives
EmployedIndividuals
House Wives
Students
Retired / SeniorCitizens
Walk-in Customers
Core Services
Non Core Services
8/2/2019 A Winning Business Plan
14/21
12 Afghanistan Institute of Banking and Finance (Author Sohailuddin ALAVI) March 2012
Business Planning Workbook
Competitive AnalysisHere the Branchs competitive power is measured verses other bank branches operatingin the permeable vicinity. This analysis together with customers profile helps to identify
ideal branch positioning; the areas requiring attention; and, also in formulating theenabling objectives.
BranchRanking
(a)
Average CompetitorRanking
(b)
RelativePosition(a b)
Corporate Customers
Brand Image
Financial Products & Services
Service Quality
Customer Loyalty
Retail CustomersBrand Image
Financial Products & Services
Service Quality
Customer Loyalty
Walk-in Customers
Brand Image
Financial Products & Services
Service Quality
Customer LoyaltyRelative Ranking Scale: 01 Inferior 05 Average 10 Superior.
Conclusion:
Relative Advantages
________________________________________________________________________
________________________________________________________________________
Relative Disadvantages
________________________________________________________________________
________________________________________________________________________
Overall Branch Positioning
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
8/2/2019 A Winning Business Plan
15/21
13 Afghanistan Institute of Banking and Finance (Author Sohailuddin ALAVI) March 2012
Business Planning Workbook
Marketing Strategy (Mix)Elaborate the plan-of-actions with respect to improving and/or sustaining branchpositioning, business development, and customer relationship management.
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
Enabling ObjectivesEnabling objectives refer to specific actions planned in the context of accomplishingmarketing strategy. These actions should essentially be written on SMART criteria i.e.Specific; Measurable; Attainable; Realistic and Relevant; and, Time bounded.
_____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________
8/2/2019 A Winning Business Plan
16/21
14 Afghanistan Institute of Banking and Finance (Author Sohailuddin ALAVI) March 2012
Business Planning Workbook
Organization and Human Resources Development
Living the branchs business plan can never become possible without the development oforganization and human resources in harmony with the mission statement. Organization
development refers to defining (or redefining) the organizational structure, processes,and interdependencies within the branch. Human resources development is twinconcept. It essentially entails empowerment setting shared direction, buildingcommitment, up-scaling competencies and defining roles and responsibilities in harmonywith the mission statement.
Organization Development PlanOrganization structure (organogram) should preferably be process oriented andempowering, especially for the front-end positions. Moreover, structure should clearlydefine the roles, responsibilities and interdependencies of each position.
Organization Structure
8/2/2019 A Winning Business Plan
17/21
15 Afghanistan Institute of Banking and Finance (Author Sohailuddin ALAVI) March 2012
Business Planning Workbook
Human Resources Development Plan
Position wise Performance Management Plan
Team Member Title/Position KeyResponsibilities PerformanceIndicators Goals / Targets
8/2/2019 A Winning Business Plan
18/21
16 Afghanistan Institute of Banking and Finance (Author Sohailuddin ALAVI) March 2012
Business Planning Workbook
Human Resources Development Plan (Continued)
Employee Rotation, Training, and Development Plan
Team Member Current Position Next Movement CompetenceGap TrainingRecommended
Competence= Morale and Motivation; Work skills and knowledge; Attitude; Moral and EmotionalDevelopment; and, Soft skills.
8/2/2019 A Winning Business Plan
19/21
17 Afghanistan Institute of Banking and Finance (Author Sohailuddin ALAVI) March 2012
Business Planning Workbook
Risks and their Mitigates
Risk refers to adverse impact on the branch business plan as a result of expected andunexpected contingencies both in the internal and external scenarios. Such as, change in
the Govt. regulations may limit branchs lending opportunities, entry of new players inthe financial market may affect branchs ability to mobilize deposits at lower interestrates. Similarly, exit of key persons from the branch may affect its working adversely, inthe short run. Happening of such contingencies may erode the branchs prospects if noalternative arrangements (mitigates) were already planned (or made).
Projected Risks and Possible Mitigates
External Contingencies Internal Contingencies
Mitigates for External Contingencies Mitigates for Internal Contingencies
8/2/2019 A Winning Business Plan
20/21
18 Afghanistan Institute of Banking and Finance (Author Sohailuddin ALAVI) March 2012
Business Planning Workbook
Appendix I
Use this page to list your assumptions underlying the business projections
Assumptions: -
_____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________
8/2/2019 A Winning Business Plan
21/21
19 Afghanistan Institute of Banking and Finance (Author Sohailuddin ALAVI) March 2012
Business Planning Workbook
Appendix II
Projections Worksheet
Use additional worksheets if required
Top Related