Strategic Planning, Business Planning, and Budgeting
The FinPro strategic planning process is designed to help clients build value by establishing the structure the institution needs to determine its financial goals and implement them. The strategic business plan includes all of the regulatory required elements and the interactive, what-if modeling results in a one year budget, a three year business plan, and a five year strategic plan.
Interactive and Iterative Board and Management Involvement
Active institution involvement is essential to:
- provide an understanding of the building blocks of the plan including the situation assessment and the assumptions utilized in the modeling process;
- facilitate decision making through training and education;
- promote institution ownership of the plan;
- identify and assign direct accountability to the individuals responsible for each area of the institution;
- provide for the ongoing monitoring and updating of the plan.
The Process Drives the Results
The FinPro planning process typically involves two phases, each including a planning retreat.- Phase One is designed to identify the existing situation assessment. The fact patterns are utilized to spur discussions between management and the board about the strengths, weaknesses, core competencies, primary thrusts, major objectives, and the ultimate goals. The compilation of these topics creates the institution's direction for the next three to five years.
- Phase Two is the scenario building phase. During this process FinPro and management meet to create the financial projections for the institution based on the direction given during the first board meeting. The corresponding retreat is held to review the various scenarios, discuss the recommended scenario and the various strategies outlined to achieve the scenario.
Results Driven, Built Incrementally
Unlike other firms that plan at the bank level, FinPro takes a more granular approach and builds value by planning at the following levels: Product by Product, Segment by Segment, Person by Person, Strategy by Strategy, Market by Market.Monitoring is Just as Important as Planning
To ensure the execution of the plan, the Board and management need to continually review financial performance relative to the established one, three, and five year goals.The Components of the Strategic Plan
All plans are built modularly (each chapter is also a standalone service offered). A typical Plan includes:- Summary (SWOTs: Strengths, Weaknesses, Opportunities and Threats)
Risk, Regulatory & Governance - Internal Environment
- External Environment
- Asset/Liability Analysis
- Community Reinvestment Act (CRA)
- Bank Secrecy Act (BSA)
Market, Customer and Franchise
- Franchise and Market Assessments
- Customer Analysis
Historical Performance
- Quarterly Performance Report
- Quarterly Capital Markets Report
- Historical Building Value
Situation Assessment:
- Overview
- The Strategic Plan:
- Executive Summary
Building Value - in order of priority
- Franchise and Markets
- Loans
- Deposits
- Customers
- Non Interest Expense
- Capital
- Non Interest Income
- Modeling Assumptions and Output
- Cost Center and Strategic Alternative Summary
- OTS Schedules
- Market Ranking
- Overview
Appendix
Tags: Strategic Planning