This guest post comes from Michael, a contributing editor of the Dough Roller, a personal finance and investing blog, and Credit Card Offers IQ, a credit card review site.


Every American has a dream of one day owning their own successful and profitable business. Usually when you think of self-owned businesses, you imagine dry-cleaners, restaurants and law and medical practices.  But how many people do you think wake up in the morning wanting to start their own bank?  The venture is not as difficult as it may sound.

It’s no secret that the US government right now is shutting down bank after bank.  But if you have a strong business sense and the dedication to see it through, there’s no better time than the present to get into the banking industry.  On the surface, the task at hand may seem extremely daunting, but the beauty about owning a bank is that it’s just like owning any other small business venture; Take one step at a time.

STEP 1Evaluate Your Assets

In order to start you’re bank, a few things are needed in the “idea” process.  Unless you are extremely confident about your financial position, this is not the business for you.  When deciding whether or not you’ve got the right idea, you should ask the following questions:

  • Will I be able to raise the necessary capital in order to start a charter bank? Different states require different capital amounts to open a bank, but a safe number is $10 million.
  • What sets my bank apart from others in the area? In order to have a successful bank, you need to have a large customer base and that doesn’t come easy.  Does your bank offer a higher interest rate than others?  Does it provide better and friendlier customer service?  No matter where you decide to open your charter bank, make sure it will be a welcomed community asset.
  • Do I have the skill set to run a bank? If you’re educational background is in turf management, then the dream of owning a bank probably isn’t the right one.  Owning and operating a charter bank takes a huge amount of financial knowledge, and unless you know it all, move on to something else.

STEP 2Research the State Requirements

The quickest and easiest step in the process, knowing exactly what is needed in order to operate a bank in your state is crucial.  There’s nothing more deflating then thinking you’ve got it all figured out, only to find out that you haven’t followed procedure.  The state requirements can usually be found at the Department of Financial Institutions and if you don’t know where that is, any state employee will gladly point you in the right direction.

STEP 3Develop a Fundraising Plan and Employment Plan

Finally getting into the meat and potatoes portion of the idea, this is the step where you find out if your dream can become a reality.  How are you going to generate the necessary capital in order to open this charter bank?  Just as importantly, who are going to be the people in the executive positions making the tough decisions?

Raising a large amount of money means having excellent personal skills and excellent “salesman” skills.  The bank you have envisioned better have one awesome set of ideals in order to not only raise this kind of money but to attract a high caliber employee away from another company.

STEP 4Fill Out the Required Paperwork for Approval

Once you feel you have the entire package in place, the next thing to do is generate an approval from the state.  After filling out a quick form online or in person, you can expect to receive a thick packet in the mail with all of the required paperwork.  Included in this packet are:

  • Financial questionnaires
  • Financial reporting sheets
  • Eligibility checklists
  • The request for your business plan
  • The request for your financial and employment plan
  • The request for your bank’s proposal

Making sure that you have filled everything out to its absolute potential, mail the documents back to the state and play the waiting game.  Most applications are returned in a few weeks, but the process has been known to take up-to three full months.

STEP 5Make It Happen

With approval from the state, the only thing left to do is execute.  Raising money, building your bank (or your website if you are looking at an online bank), hiring employees and developing a marketing strategy are all now on your to-do-list.  Depending on your efficiency, the dream of owning you own bank could be more realistic than you ever thought possible.