How to Start a Business in Financial Services

beggers March 18, 2018 0
How to Start a Business in Financial Services

Finances are one of the many things that influence our lives, careers, and daily decisions. For this reason, people who work in the financial sector play a significant role in influencing the finances of individuals, companies and governments. If you’re currently working within that sector, or are a recent graduate, you may be thinking of starting a business within the financial sector. A lucrative business that you may consider is one in the financial services. In case you’re unaware of what such a business would entail, one or more financial advisors would essentially help individuals manage their money. If this sounds like a business you’d be interested in starting, this article will tell you how to start a business in financial services.

Choose an Area to Specialize in

One of the first steps to starting a business in financial services is to choose an area to specialize in. Financial services are relatively broad, and there are so many areas that you could choose to focus on. You should decide where you’d ideally want to add value as well as your areas of strength to help you decide. If, for instance, you’re passionate about life after retirement, then you could specialize in retirement planning. Likewise, when choosing an area of specialization, you could decide that you’re interested in investing in international information and financial services companies such as Eli Global. Other areas to consider are helping people manage their assets, liabilities and insurance, or helping people set and accomplish their financial goals.

Once you determine which area you’d like to specialize in, you should do research and see what businesses are presently carrying out the services that you intend to do. You should take note of any areas in which they may be lacking and see if you can incorporate them into your business plan to give you a competitive advantage. It is important that you choose to specialize in an area that interests you. This is because you’re going to have to wake up every morning to run this business, so when it’s something that you love, it will more likely make you feel like it’s worth it on the days when nothing seems to be working.

Draft a Business Plan

In terms of a business plan, you should take enough time to draft one that enables you to do enough research and validate your idea. You should ask yourself difficult questions, poke holes where possible, include a financial forecast and map out how you intend on reaching your business objectives. It is important that when drafting your business plan, you pay attention to the financial aspect of your plan.  Your income statement, cash flow projection, and balance sheet are three key aspects to spend time devising. Your start-up expenses and operating expenses should also be calculated. This is imperative as it will help you determine how much capital you need to start up and you can begin exploring ways to raise those funds. You may need to try crowdfunding, take out a traditional business loan, find a business partner, or save towards it.  If you need help writing a business plan, you can find a number of resources online that will help. You could also consider finding a mentor who can give you advice and help you every step of the way. You should also note that there is nothing wrong with going back and redrafting your business plan if you feel some things won’t work. It is better to tackle potential problems before starting your business to save yourself several issues in the long-run.

Get Educational Qualifications

Depending on your level of qualifications, you may need to go back to school or take an extra course before starting a business in the financial services. You should note that you don’t necessarily need a degree to start, but it may help equip you with the knowledge and in some instances contacts that you need to ensure that you succeed in your business. You could think about getting a finance related degree or even one that is business related. Going to a top school could also help in terms of the knowledge that you’ll gain and the people that you’ll meet. Some of the best schools to attend for finance-related degrees include Harvard, University of California, Stanford, Columbia University, and the University of Chicago. If you decide getting a degree isn’t for you, self-teaching or taking free online courses is also another alternative.

Find out What Licenses You Need

Most businesses require that you get a license before you’re able to operate or start your business. Every industry has different requirements, and it also varies from state to state. You should find out by researching the laws in your state for financial services to see what the requirements are in your specific state or the place that you plan on operating your business. It is likely that you’re going to need a business license, to begin with. Apparently, most businesses are required to get a combination of license and permits from both federal and state agencies. The specific requirements and fees, however, will vary depending on a number of factors relating to what activities your business will be carrying out, where you’re located as well as government rules. If you’re still unclear about what these are after doing your research, consider contacting your local government or asking someone who has an established business in your industry.

Network in Finance Industry

A lot of the time, how successful you are can be attributed to who you know. It is, therefore, necessary that you try and network before starting a business in financial services. By networking, you’ll meet key people that are leaders in the industry or can connect you to people who are. You may also meet contacts that can provide you with relevant information that you can use to grow your business. Another reason networking is important is in order to learn from other people’s experiences. You can avoid many common business mistakes when you take the advice of more established people who have been in the business longer. Some ways to network include going to relevant finance events, meeting up with people in the industry for social events, and responding to other invites that you suspect useful contacts may be at. You should also remember some networking principles which include giving instead of just taking, following up with the contacts that you collect, genuinely looking for ways to build authentic relationships with them, and not dominating the conversation.

Get Relevant Experience

Before jumping into a business as demanding as financial services, it is essential that you have a decent amount of experience. You could think about shadowing someone who is already established in the field for some time in order to learn the ropes and understand how the business works. Another similar idea is finding an internship in an established financial services organization for a substantial amount of time. Thirdly, if you haven’t already, you could consider getting a full-time job in areas such as investment banking, insurance, pensions, wealth management, and retail banking as they will cover a wide range of areas within finance. If possible, you should also try and learn as much as possible about each department so that you have a breadth of knowledge regarding how each department in a business works and what it entails for it to run smoothly.

By doing this, you should be able to see first-hand what it looks like to work in such a business on a daily basis. Getting experience is also important as by doing so, you’ll be able to truly determine whether it’s a business that you want to invest in over the next couple of years.

Insurance

Starting a business involves a great deal of risk, so you should think carefully about all of the associated risks involved before starting. One of the ways to secure yourself against accidents, unforeseen circumstances that could negatively affect your business, and crippling lawsuits is by getting insurance. There are a number of insurance plans available to businesses, so you should do your research and see which ones you’re more likely to need. Some common forms of insurance include general liability, product liability, professional liability, commercial property, home-based business, workers compensation and employee benefits. It is up to you to use your discretion about which forms of insurance you really need, however minimizing the risk of significant financial loss should be your primary objective.

Starting a business in any industry can be both scary and nerve-wracking. It requires that you believe in a vision and invest your time, money and resources into bringing it to life. Overcoming the fear of failure is also an often-challenging mountain to climb when starting a business. However, by equipping yourself with the right information, doing your research and surrounding yourself with the right people, it may become a source of happiness and give you a sense of purpose Hopefully, if you intend on starting a business in financial services, this has given you some ideas on where to start.

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