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Table of Contents

Introduction2

Section 1 Summary3

Section 2 Mission Statement3

Section 3The Credit Union3

Section 4 Internal and External Analysis4

Section 5 Goals and Action Steps5

Section 6 Financial Data6

Section 7 Supporting Documents6

Business Plan Outline – Table of Contents7

Chart a Course for the Future

Creating a Business Plan – Section by Section

Creating a business plan is a vital component of running and building a successful credit union. While a written plan is not likely to address the unchartered waters we face today, it will help keep management focused and prepared to change course if necessary.

Some small asset size credit unions can begin with a condensed business plan to get things started. This guidance will take you section by section through a simplified planning process and will enable you to quickly make a preliminary assessment of your credit union. If you need assistance with completing the plan, please contact your Regional Director.

This guide is by no means all-inclusive, and it will not apply equally to all credit unions so be sure to modify it to your credit union’s particular journey. If you are interested in a more detailed plan, please contact your Regional Director to discuss the different options available to you.

Getting Everyone On Board

The active and candid participation of the Board of Directors, key staff and management is essential to a successful planning process. Not only will they share valuable insight, information and ideas, but they will feel ownership in the plan as well.

It is important to point out that while boards of directors often give freely of their time with little or no recognition, for which they should be much admired, they are, nevertheless, directly responsible for the success of the credit union. This means that as a group they are in charge of establishing a clear organizational mission and forming the strategic direction to accomplish the mission.

Section 1 – Summary

The purpose of this section is to summarize the ideas you have developed in your plan. It should be brief - less than one page, and written last, after you have completed the seven sections of the plan described below.

Section 2 – Mission Statement

A mission statement should be a clear and concise reflection of the credit union guiding principles. It can be two words, a paragraph or a simple sentence, but must be what drives the credit union, and must be clear and convincing to the reader. Be proud of it. Post it in your lobby, include it on credit union letterhead and account statements. Share it with staff and members alike.

Section 3 – The Credit Union

Here include a brief history of your credit union and how it got to where it is today. In a concise and direct manner point out the following:

  • Years in business, number of employees, location(s), key financial or growth highlights, reputation in the community or with sponsor.
  • Significant successes and failures – and lessons learned. (For example, if your credit union added new members and gained community recognition for offering Volunteer Income Tax Assistance – include it!)
  • Past problems and how you solved and survived them (If your credit union’s sponsor ceased operations, leading the credit union to obtain a community charter – include it.)
  • Major challenges the credit union faces now and in the near future
  • Describe the credit union industry. Is it a growth industry? What changes do you foresee in your industry, and how is your credit union poised to take advantage of them?
  • Define your market position, such as service penetration by members. Assess the outside competition, for example if a bank is nearby what are their strengths and weaknesses.

Section 4 – Internal and External Analysis

SWOT Analysis

An effective way to look at the credit union’s strengths, weaknesses, the opportunities available and the outside threats imposed is to perform a SWOT analysis. In this section of your business plan, list the results from the following exercise:

Strengths – This is something internal that you can control. What is golden about your credit union? What do you do well? What do you do better than most? A few possibilities include:

  • Management responds well to objectives – good teamwork;
  • Location of the credit union; and
  • Use of technology.

Weaknesses – This is something internal that you can control. What looks a bit rusty inside your credit union? What must you do better or stop doing in order to be successful? What could you improve? What should you avoid? For example:

  • Limited staff;
  • Lack of appeal to the underserved population; and
  • Use of technology.

Opportunities – This is something external that you cannot control. Where is the blue sky in your environment? What do you need to take advantage of that will allow the credit union to achieve success? An opportunity might be:

  • Mergers;
  • A market vacated by an ineffective competitor; and
  • An untapped underserved area.

Threats – This is something external that you cannot control. What are the red alerts in your environment? What t barriers exist that are in the way of the credit union reaching ultimate success? For example:

  • Rapidly changing technology;
  • Economy – rate risk; and
  • Loan loss potential.

Section 5 – Goals and Action Steps

Setting Your Goals

Through your analysis of the credit unions internal strengths, weaknesses, the external opportunities and threats, identify at least three broad but key areas your group believes the credit union should concentrate on during the next twelve months. Examine those three broad areas, and establish between three and eight goals. Goals must be specific, measurable and result oriented.

Goals are narrow in focus and will always include the following characteristics:

(Source: CUNA)

  • Written in terms of desired results or outcomes.
  • Has a specific time frame or deadline.
  • Has a measurable way of determining when the goal, as stated, has been accomplished.
  • Is realistic and attainable (consider available staff, time, and budget, as well as the nature of your credit union, your field of membership, your location, etc.)
  • The goal, as written, should clearly communicate its intent to anyone who reads it.
  • Agrees or corresponds with your mission statement.

An easy way to write a goal is to follow this formula:

Start the goal with an action verb (such as: build, increase, publish, achieve). Then put the measurable result that you want to accomplish. End the goal with a specific deadline date. Once the goal is written, ask if it is understandable and realistic.

Developing an Action Plan

The action steps are the road map to these goals. That is, the action steps necessary to accomplish the goals together with corresponding assignments of responsibility and completion deadlines.

Completing the action steps will vary depending on how complicated the goal is, the resources available, the ability of persons assigned to action steps, priority and time span. Generally, the action plan will include the following elements:

  • List the action steps that will be required to implement each goal;
  • Identify who will be responsible for each step;
  • Identify the resources necessary to implement each goal;
  • Develop a cost/benefit analysis for each goal; and
  • Develop deadline dates for each step, and specify who’s responsible for completion,

Implementation of your goals ensures results. To follow through with implementation, the CEO or planning chair must make sure the plan is followed. In addition, you will want to test the effectiveness of the plan by asking:

  • What went right?
  • What went wrong?
  • How can we do it better next time around?
  • Is the mission statement still current and valid?
  • Did the action steps help to achieve the goal?

This evaluation then becomes the first step in making a new and better plan…

Section 6- Financial Data

In this section of your business plan include the major financial documents such as balance sheet, income statement, budget and projected budget. Describe your current financial position and how your credit union achieved success or what caused financial difficulties in the past.

Since pictures speak louder than words, you may want to use graphs for an historical analysis, especially if they are positive. Budgeting for new services is an important component before adding any new programs. The pricing portion of the budget process should include not only the cost of the service but also any premiums to compensate for risk and any adjustments made for competitive reasons. Obviously, an effective price is one that both serves the needs of the member and is economically sound for the credit union.

While it may be difficult to calculate a precise number, make an attempt to learn your break-even point. The break-even point represents the level of revenue equal to the total of the variable and fixed costs for a given product per member. In other words, break-even is the relationship between the income that the credit union receives on a particular product (a loan, for example) and the cost to maintain that same product.

Variable costs. These costs vary in total with changes in volume or level of activity. Examples include supplies, postage, printing, and paper products.

Fixed costs. These costs do not change in total, regardless of the volume or level of activity – salaries and depreciation, for example.

Be sure to include any strategic information related to your credit union that may have an impact on your financial situation in the future, such as threat of sponsor lay-off, field of membership expansion, etc.

Section 7 – Supporting Documents

Include documents that lend support to the statements you have made in the body of the business plan. Documents related to the cost of new programs, letters of support from credible business or people and demographic data.

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Table of Contents

Business Plan Cover

Introduction1

Section 1 Summary2

Section 2 Mission Statement3

Section 3The Credit Union4

Section 4 Internal and External Analysis5

Section 5 Goals and Action Steps6

Section 6 Financial Data9

Section 7 Supporting Documents10

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[Name of Credit Union]

[Year] Business Plan

[Date]

[Prepared by]

Introduction

Briefly explain why and when the plan was developed, and the individuals involved.

Example: The Board of Directors and key staff of [Name of Credit Union] held a planning session on [date here] for the purpose of determining the mission of our credit union and its strategic direction. The group analyzed the credit union’s strengths, weaknesses, opportunities and threats, as well as defined specific goals and action steps.

This business plan will establish a structure to help our credit union set priorities and make decisions. In addition, progress will be reviewed at least quarterly, and findings reported to the board.

The team consists of the following individuals:

  • ______
  • ______
  • ______
  • ______
  • ______
  • ______
  • ______
  • ______
  • ______

Section 1 - Summary

This section should be written last, and include brief highlights of the main issues within the business plan. The message should be enthusiastic and provide the reader a basic understanding of your credit union plan.

Example

With a fresh perspective on our mission, an understanding of what we do well and not so well, the environment in which we operate, and a new perspective of what our members value most, the [Name of Credit Union] will pursue the following direction: [Highlight goals and other significant ideas here]

Section 2 – Mission Statement

Include your mission statement in this section.

Example:

Our purpose, the guiding light of [Name of Credit Union] is stated in our mission statement:

Section 3 - The Credit Union

This section should include a brief history of your credit union and how it got to where it is today. Include a description of who your members are or will be, as well as a description of your products and services. Incorporate an overview of the industry, as well.

Example:

  • Credit Union Description

The credit union opened its doors in [Year] to serve the employees of [Name of Company]. Today the credit union serves [Number] members that [describe current field of membership]. We have a team of [Number] volunteer board members and [Number] employees.

  • product/services

The credit union offers [describe products and services, include why your members need/want your products and why they choose yours over the competition]

  • Industry Overview

The credit union experienced [describe significant successes and/or failures] resulting in [describe outcome - include any trends expected in the coming years and detail the challenges and/or opportunities facing your credit union].

  • Market

An analysis of our market revealed [include characteristics and clearly identify your current and potential members – be as specific as possible, doing so will help define your niche – then determine how you will reach them].

Section 4 – Internal and External Analysis

In this section list the results of your SWOT Analysis.

Strengths / Weaknesses / Opportunities / Threats

Section 5 – Goals and Action Steps

In this section you will detail what the planning team hopes to accomplish and how you plan to get there.

Through our analysis of our internal strengths and weaknesses, as well as external opportunities and threats, we identified the following key areas that the credit union should concentrate on during the next twelve months:

______

______

______

The following represent the goals established at the planning session:

Example:

Issue: Loan Services. As a stepping-stone for growth, our main initiative this year is to increase loans and the number of accounts per member. By implementing a VISA program we will meet the changing and growing needs and interests of our current and potential membership which ultimately will lead to growth and deeper commitment to member service.
Goal #1: Implement and market a VISA Program to achieve 100 accounts by December 31, 2010
(Action verb + measurable result + deadline date)
Action Steps / Team (by name) / Date / Comments
Complete vendor evaluation and cost/benefit analysis / CEO-lead
Treas., Super Comm. Chair / 1/09 / Completed 2/15/09
Sign and return contract, order plastic, determine equipment requirements / CEO / 6/09
Assign VISA Manager / CEO / 3/09
Establish VISA policy and marketing plan / VISA Mgr. / 6/09
Attend training, conduct staff training / Key Staff / 9/09
Begin marketing / Mktg. Mgr. / 9/09 / Every quarter, ending 12/31/10

The following represent the goals established at the planning session:

Issue:
Goal #1:
(Action verb + measurable result + deadline date)
Action Steps / Person / Date / Comments
Issue:
Goal #2:
(Action verb + measurable result + deadline date)
Action Steps / Person / Date / Comments
Issue:
Goal #3:
(Action verb + measurable result + deadline date)
Action Steps / Person / Date / Comments
Issue:
Goal #4:
(Action verb + measurable result + deadline date)
Action Steps / Person / Date / Comments

Section 6 – Financial Data

In this section estimate all costs and benefits associated with the new product/service. Describe financial trends and provide current and proposed financial statements.

You may download a basic historical chart by completing the worksheet found by clicking on the graph outline below.


You may download a basic cost/benefit worksheet by clicking on the icon below.

Section 7 – Supporting Documents

Provide copies of brochures or other relevant information referred to in the text. You can also use this section to include a brief overview of any work you did with your Regional Director or other outside advisor.