Starting a bank sounds like an impossible Gilded Age enterprise; more befitting of a Rockefeller than today’s small business owner. But it’s not as impossible as one might think — or as risky.
According to Smart Money.com, “the three-year failure rate for new banks is less than one in 1,000,” which, compared with a “60 percent failure rate for new restaurants,” is not so horrible. The profits are not too shabby either. The site reports: “6,770 community banks earned $67 billion over the past five years.”
In a recent Wall Street Journal interview, even Former Federal Reserve Chairman Alan Greenspan says that he would start a bank — if he were 50 years younger.
Inspired by the Move Your Money campaign, the Huffington Post is investigating different options to make banking more local and personal. For enterprising individuals, one way to make your banking experience more individual could be to start your own. Here are some tips on how to get started.
Identify a Need
One of the first things any prospective small business owner must assess is the need for his or her business in the community. Being a bank owner is no exception.
When starting Global Trust Bank in Mountain View California, James Wall analyzed his neighborhood to see if it presented a need.
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