Like HowStuffWorks on Facebook!

How Banks Work

Starting a Bank: Market and Location

­ The location of your bank is also a very important decision. You have to do some market research to determine how well a new bank will do in a particular area, or where the best spot in a large geographic region might be. This information is also required for your application for a charter. You may be competing against others who are also trying to charter a bank in that area! Even though competition is healthy for business and consumers, there is still the need to make sure a stable and safe financial environment is maintained. The economy will also be taken into consideration in locations where there are lots of competing banks.

The specific physical location of your bank is chosen by the organizing group and is just as important as finding the right market. You want the bank's location to be convenient for customers and in a heavily trafficked area. You also need to decide whether to buy or lease a building.