Investment Company Business Plan Template
If you want to start an Investment Company or expand your current Investment Company, you need a business plan.
The following Investment Company business plan template gives you the key elements to include in a winning Investment Company business plan.
Investment Company Business Plan Example
I. Executive Summary
Business Overview
[Company Name], located in [Location] is a new investment firm that focuses on providing high quality investment portfolio management services for individual and corporate investors. The company uses a proprietary platform to optimize investment strategies to help people and businesses reach their investment goals. [Company Name] aims to be the best investment company for individuals and corporations throughout [Location].
Products Served
[Company Name] will provide a variety of different types of investment management services. The company will provide portfolio management, record keeping, legal consulting, accounting services, and tax management services for multiple types of mutual funds and other assets.
Customer Focus
[Company Name] will primarily serve the residents within a 20-mile radius of [Location]. The demographics of these residents are as follows:
- 195,203 residents
- Average income of $56,000
- 49.3% married
- 40.5% in Management/Professional occupations
- Median age: 43 years
In addition to this prime adult demographic for an investment firm, there are three large banks in the area. Working professionals, especially those in the financial sector, realize the importance of making sound investments and create a perfect target market.
Management Team
[Company Name]’s most valuable asset is the expertise and experience of its founder, [Founder’s Name]. He has been a licensed investment manager for the past 20 years. [Founder] has spent much of his career working in a large investment banking firm. He spent the more recent portion of his career at a smaller firm where his client base doubled in just five-years.
[Company name] will also employ an experienced assistant to help with various administrative duties around the office. [Assistant’s Name] has experience working with C-level executives and has spent significant time as an administrator.
Success Factors
[Company Name] is uniquely qualified to succeed due to the following reasons:
- [Company Name] will fill a specific market niche in the community. In addition, the Company has surveyed local businesses and received extremely positive feedback saying that they explicitly want to make use of [Company Name]’s services when launched.
- The management team has a track record of success in the investment management industry.
- The local area is currently underserved and does not have specialized investment managers.
- Market trends such as high disposable income and spending power are propelling the demand for investment management services.
Financial Highlights
[Company Name] is seeking a total funding of $225,000 of debt capital to open its investment company.
- Office design/build-out: $100,000
- Office equipment and supplies: $75,000
- Working capital: $50,000 to pay for marketing, salaries, and lease costs until [Company Name] reaches break-even
Top line projections over the next five-years are as follows:
| Financial Summary | FY 1 | FY 2 | FY 3 | FY 4 | FY 5 |
|---|---|---|---|---|---|
| Revenue | $560,401 | $782,152 | $1,069,331 | $1,379,434 | $1,699,644 |
| Total Expenses | $328,233 | $391,429 | $552,149 | $696,577 | $776,687 |
| EBITDA | $232,168 | $390,722 | $517,182 | $682,858 | $922,956 |
| Depreciation | $7,000 | $7,000 | $7,000 | $7,000 | $7,000 |
| EBIT | $225,168 | $383,722 | $510,182 | $675,858 | $915,956 |
| Interest | $6,016 | $5,264 | $4,512 | $3,760 | $3,008 |
| Pre Tax Income | $219,152 | $378,458 | $505,670 | $672,098 | $912,948 |
| Income Tax Expense | $76,703 | $132,460 | $176,985 | $235,234 | $319,532 |
| Net Income | $142,449 | $245,998 | $328,686 | $436,864 | $593,416 |
| Net Profit Margin | 25% | 31% | 31% | 32% | 35% |
II. Company Overview
Who is [Company Name]?
[Company Name], located in [insert location here] is a newly established investment company that will provide a variety of investment management services. The company will operate in a professional setting, conveniently located in the center of a busy financial district.
[Company Name] is headed by [Founder’s Name], a graduate from [School Name] with a finance degree and over 20 years of experience working as an investment manager for individual and corporate investors. After a long tenure with a large investment firm, [Founder] transitioned to working for a small firm, so he could play a larger role in helping clients choose sound investment strategies. Over a five-year period, he doubled the small firm’s client base. This success sparked his desire to start his own investment company.
[Founder] began researching what it would take to create his own investment company and did a thorough analysis on the costs, market, demographics, and competition. [Founder] has now compiled enough information to develop his business plan in order to approach investors.
[Company Name]’s History
Once his market analysis was complete, [Founder’s Name] began surveying the local vacant office space and located an ideal location for his investment firm’s headquarters. [Founder’s Name] incorporated [Company Name] as a Limited Liability Corporation on [date of incorporation].
Once the lease is finalized on the office space, [Founder] can start remodeling the interior to best serve his clients that will come into the office to meet with the investment managers.
Since incorporation, the Company has achieved the following milestones:
- Found office space and signed a letter of intent to lease it
- Developed the company’s name, logo and website located at [website]
- Hired an interior designer for the decor and furniture layout
- Determined equipment and fixture requirements
- Began recruiting key employees
[Company Name]’s Products/Services
Below are [Company Name]’s product and service offerings:
[Company Name] will provide the following services:
- Portfolio management
- Record keeping
- Legal consulting
- Accounting services
- Tax management services
- Investment strategies
III. Industry Analysis
The global investments market is valued at an estimated $2305B and is expected to reach $3631.22B in the next five-years. The investment management market can be broken into various segments depending on the type of investments involved. Some of the significant categories are hedge funds ($3.9T value) and mutual funds ($25.7T value). There are approximately 16,150 investment companies in the United States.
The investment management industry is experiencing a rapid digital transformation. Fiscal pressures are forcing existing investment firms to focus on streamlining their operational efficiencies through technology to remain competitive among investors.
There is a lot of competitive pressure as new startups enter into the space using digital platforms from the outset, making long-standing traditional firms obsolete if they can’t keep up with the digital transformation. According to recent reports, the millennial age group is expected to hold five times the amount of wealth in the next 10 years, as they do now. An estimated 47% of millennials prefer investment management firms that use digital platforms.
IV. Customer Analysis
Demographic Profile of Target Market
[Company Name] will serve investors of [company location] and its surrounding areas.
The community of [company location] has thousands of corporate professionals, middle-to-high income earners, and small business owners. The demographics include an abundance of millennials and Gen Z individuals who are just getting started with investing and could benefit from investment management services.
Customer Segmentation
The Company will primarily target the following three customer segments:
- Millennials & Gen Z: Many millennials and Gen Z individuals are just getting started with investing and will need investment management services.
- Individuals with incomes of $75K and over. These individuals have the financial means to pursue investment opportunities.
- Small Businesses: The Company will also target businesses who need help managing their investments and assets.
V. Competitive Analysis
Direct & Indirect Competitors
The following businesses are located within a 20-mile radius of [Company Name], thus providing either direct or indirect competition for customers:
Invest Smarter
Invest Smarter is an investment company in [location]. In business for over 40 years, Invest Smarter delivers investment advice and portfolio management solutions to individuals and businesses across the area. Invest Smarter also offers a variety of investment strategies for mutual funds such as growth funds, income funds, balanced funds, and index funds.
In addition, Invest Smarter provides record keeping, legal consultation, and tax management services. The investment managers on staff are all dedicated to providing clients with expert advice and exceptional customer service from the onboarding stage on.
Premium Investment Services
Premium Investment Services is a trusted investment company that provides service through a proprietary digital platform. The company is a full-service investment management firm operating primarily in [location] with online support through the digital application.
Clients are able to set up their accounts digitally or come into the office and speak with an investment manager in person. The firm is owned and operated by experienced investment professionals who are experts in hedge funds, mutual funds, and alternative investments.
Strong Investment Solutions
Strong Investment Solutions is also a local investment company that offers a variety of investment services. The company is mostly known for its superior portfolio management strategies, but is also equipped to handle additional services including tax management, legal consulting, and financial record keeping. The company has been in business for about ten years and has a loyal client-base.
While Strong Investment Solutions has a strong branding and following, the company lacks a digital platform, thus falling short for investors who prefer the convenience of being able to manage their investments from their smartphones.
Competitive Advantage
[Company Name] enjoys several advantages over its competitors. Those advantages include:
- Location: [Company Name]’s location is near the center of town, in the financial district of the city. It’s visible from the street with many working professionals walking to and from work on a daily basis; giving passersby a direct look at the firm, most of which are part of the target market.
- Client oriented service: [Company Name] will have a full time assistant to primarily keep in contact with clients and answer their everyday questions. [Founder’s Name] realizes the importance of accessibility to his clients, and will further keep in touch with his clients through monthly presentations, seminars, and updates per email and newsletters.
- Management: [Founder’s Name] has been extremely successful working in the financial services sector and will be able to use his previous experience to grant his clients detailed insight into the investment world. His unique qualifications will serve customers in a much more sophisticated manner than [Company Name]’s competitors.
- Relationships: Having lived in the community for 25 years, [Founder’s Name] knows many of the local leaders, newspapers, and other influences. Furthermore, he will be able to draw from his ties to the community in order to build up a heavy asset base in a short amount of time.
- Proprietary Technology: [Company Name] will invest heavily on the latest technology to develop a streamlined digital platform for clients to be able to manage their investments securely and conveniently from anywhere in the world using their smartphones.
- Client-focused investment management services, where the Company’s interests are aligned with the clients
- Service built on long-term relationships
- Big-firm expertise in a small-firm environment
- General and administrative functions including legal/compliance, marketing, bookkeeping, etc.
- Client communication and scheduling
- Brand management and social media
- Administrative Assistant: one full-time employee to manage the day-to-day phone calls, scheduling, accounting, marketing, clerical, bookkeeping, billing, and any administrative task required.
- Marketing Manager: one full-time employee who will be responsible for developing and launching the brand; manage the website, and social media accounts.
- Salaries
- Office supplies and equipment
- Business Insurance
- Lease on business location and utilities
- Taxes
- Office design/build-out: $100,000
- Office equipment and supplies: $75,000
- Working capital: $50,000 to pay for marketing, salaries, and lease costs until [Company Name] reaches break-even
VI. Marketing Plan
[Company Name] seeks to position itself as a high-quality source of knowledge in the investment industry. Investors can expect to receive the best investment advice on the market from skilled investment managers in [location] and online through its digital platform.
The [Company Name] Brand
The [Company Name] brand will focus on the Company’s unique value proposition:
Promotions Strategy
[Company Name] expects its target market to be individuals and businesses within a 20-mile radius of its location. The company’s promotion strategy to reach these individuals includes:
Targeted Cold Calls
The Company will initially invest significant time and energy into contacting potential clients via telephone. In order to improve the effectiveness of this phase of the marketing strategy, a highly-focused call list will be used, targeting individuals in areas and occupations that are most likely to demand the services of an investment manager. As this is a very time-consuming process, it will primarily be used during the startup phase to build an initial client base.
Social Media
[Company Name] will invest heavily in a social media advertising campaign. The brand manager will create the company’s social media accounts and invest in ads on all social media accounts. It will use targeted marketing to appeal to the target demographics.
Publications & Media
The Company will invest in advertising in local publications to increase its brand awareness. Commercials will also be played on broadcast TV, radio stations, and digital streaming platforms, and podcasts.
Website/SEO
[Company Name] will invest heavily in developing a professional website that displays all the features and benefits of the investment company. It will also invest heavily in SEO so that the brand’s website will appear at the top of search engine results.
Referrals
[Company name] understands that the best promotion comes from satisfied customers. The Company will encourage its clients to refer their friends and family by providing economic or financial incentives for every new client produced. This strategy will increase in effectiveness after the business has already been established.
Direct Mail
The Company will use a direct mail campaign to promote its brand and draw clients, as well. The campaign will blanket specific neighborhoods with simple, effective mail advertisements that highlight the credentials and credibility of [Company Name] as an investment management company.
Pricing Strategy
[Company Name]’s pricing will be on par with competitors, so clients feel they receive great value when choosing the Company for investment management services.
VII. Operations Plan
Functional Roles
[Company name] will carry out its day-to-day operations primarily on an appointment basis. Clients will make regularly scheduled appointments to review the contents and progress of their investment portfolio. These will primarily occur in-office or or over the phone. Walk-ins looking for financial advice will also be welcome. Walk-in clients will be billed on an hourly basis.
[Founder’s name] will work on an as-needed basis, but can be expected to be present in the office during normal business hours. [Company Name] will hire multiple investment managers as needed to accommodate a growing client-base. The company will also employ an administrative assistant who will support marketing and client relationship development efforts.
Administrative Functions
Milestones
The following are a series of steps that lead to the Company’s vision of long-term success. [Company Name] expects to achieve the following milestones in the following [xyz] months:
| Date | Milestone |
|---|---|
| [Date 1] | Finalize lease agreement |
| [Date 2] | Design and build out [Company Name] |
| [Date 3] | Hire and train initial staff |
| [Date 4] | Kickoff of promotional campaign |
| [Date 5] | Launch [Company Name] |
| [Date 6] | Reach break-even |
VIII. Management Team
Management Team Members
[Company Name]’s most valuable asset is the expertise and experience of its founder, [Founder’s Name]. [Founder’s Name] who has been an accomplished investment manager for over 20 years. He graduated from [University] with a degree in Finance. [Name] has acquired a reputation for success and has earned the respect and trust of his clients. [Founder] has spent much of his career working in a large investment banking firm. He spent the more recent portion of his career at a smaller firm where his client base doubled in just five-years.
[Company name] will also employ an experienced assistant to help with various administrative duties around the office. [Assistant’s name] has experience working with C-level executives and has spent significant time as an administrator.
Hiring Plan
[Founder] will serve as the Owner and Manager of [Company Name]. In order to launch, he needs to hire the following personnel:
Additional investment managers will be hired based on client volume.
IX. Financial Plan
Revenue and Cost Drivers
[Company Name]’s revenues will come primarily from fees paid as a percentage of assets managed and hourly consulting fees. The company will buy, sell, and manage multiple types of investment assets.
The office lease, office equipment, supplies, and labor expenses will be the key cost drivers of [Company Name]. The major cost drivers for the Company’s operation will consist of:
Ongoing marketing expenditures are also notable cost drivers for [Company Name].
Capital Requirements and Use of Funds
[Company Name] is seeking a total funding of $225,000 of debt capital to open its investment company. The capital will be used for funding capital expenditures and office build-out, hiring initial employees, marketing and branding expenses, and working capital.
Specifically, these funds will be used as follows:
5 Year Annual Income Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| Revenues | ||||||
| Product/Service A | $151,200 | $333,396 | $367,569 | $405,245 | $446,783 | |
| Product/Service B | $100,800 | $222,264 | $245,046 | $270,163 | $297,855 | |
| Total Revenues | $252,000 | $555,660 | $612,615 | $675,408 | $744,638 | |
| Expenses & Costs | ||||||
| Cost of goods sold | $57,960 | $122,245 | $122,523 | $128,328 | $134,035 | |
| Lease | $60,000 | $61,500 | $63,038 | $64,613 | $66,229 | |
| Marketing | $20,000 | $25,000 | $25,000 | $25,000 | $25,000 | |
| Salaries | $133,890 | $204,030 | $224,943 | $236,190 | $248,000 | |
| Other Expenses | $3,500 | $4,000 | $4,500 | $5,000 | $5,500 | |
| Total Expenses & Costs | $271,850 | $412,775 | $435,504 | $454,131 | $473,263 | |
| EBITDA | ($19,850) | $142,885 | $177,112 | $221,277 | $271,374 | |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 | |
| EBIT | ($56,810) | $105,925 | $140,152 | $184,317 | $234,414 | |
| Interest | $23,621 | $20,668 | $17,716 | $14,763 | $11,810 | |
| PRE-TAX INCOME | ($80,431) | $85,257 | $122,436 | $169,554 | $222,604 | |
| Net Operating Loss | ($80,431) | ($80,431) | $0 | $0 | $0 | |
| Income Tax Expense | $0 | $1,689 | $42,853 | $59,344 | $77,911 | |
| NET INCOME | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 | |
| Net Profit Margin (%) | - | 15.00% | 13.00% | 16.30% | 19.40% |
5 Year Annual Balance Sheet
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| ASSETS | ||||||
| Cash | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 | |
| Accounts receivable | $0 | $0 | $0 | $0 | $0 | |
| Inventory | $21,000 | $23,153 | $25,526 | $28,142 | $31,027 | |
| Total Current Assets | $37,710 | $113,340 | $184,482 | $286,712 | $423,416 | |
| Fixed assets | $246,450 | $246,450 | $246,450 | $246,450 | $246,450 | |
| Depreciation | $36,960 | $73,920 | $110,880 | $147,840 | $184,800 | |
| Net fixed assets | $209,490 | $172,530 | $135,570 | $98,610 | $61,650 | |
| TOTAL ASSETS | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 | |
| LIABILITIES & EQUITY | ||||||
| Debt | $317,971 | $272,546 | $227,122 | $181,698 | $136,273 | |
| Accounts payable | $9,660 | $10,187 | $10,210 | $10,694 | $11,170 | |
| Total Liabilities | $327,631 | $282,733 | $237,332 | $192,391 | $147,443 | |
| Share Capital | $0 | $0 | $0 | $0 | $0 | |
| Retained earnings | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| Total Equity | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| TOTAL LIABILITIES & EQUITY | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 |
5 Year Annual Cash Flow Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| CASH FLOW FROM OPERATIONS | |||||
| Net Income (Loss) | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 |
| Change in working capital | ($11,340) | ($1,625) | ($2,350) | ($2,133) | ($2,409) |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 |
| Net Cash Flow from Operations | ($54,811) | $118,902 | $114,193 | $145,037 | $179,244 |
| CASH FLOW FROM INVESTMENTS | |||||
| Investment | ($246,450) | $0 | $0 | $0 | $0 |
| Net Cash Flow from Investments | ($246,450) | $0 | $0 | $0 | $0 |
| CASH FLOW FROM FINANCING | |||||
| Cash from equity | $0 | $0 | $0 | $0 | $0 |
| Cash from debt | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| Net Cash Flow from Financing | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| SUMMARY | |||||
| Net Cash Flow | $16,710 | $73,478 | $68,769 | $99,613 | $133,819 |
| Cash at Beginning of Period | $0 | $16,710 | $90,188 | $158,957 | $258,570 |
| Cash at End of Period | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 |
