Bureau de Change businesses form an important part of the financial sector of the economy of many countries.
Functions of Bureau de Change
They are legally empowered to operate businesses involved in the exchange of one currency for another. You will usually find Bureaus de Change at international transit points or places where there could be a need for the conversion of currency. Such places include airports, border posts, seaports, holiday resort centers, travel agencies as well as banking institutions.
What is Bureau de Change? Bureau de Change operates a business structure that is in keen competition with other similar ventures. It makes a profit by the difference in margins; in other words, it sells a currency (ices) at a higher rate than at what it bought the same currency. This is addition to any commissions or fees it charges for the transaction.
However, you will notice that the Bureau de Change must keep an eye on the prevailing dollar exchange rates as well as the rates offered by its competitors.
Because of the sensitive nature of their business, Bureau de Changes are firmly regulated by the Central Bank of the country they operate in. The Central financial institutions of each host country issue policy guidelines and a structural framework by which Bureau de Change must adhere to. In Nigeria, here are the revised20bdc20circular20and20guidelines-corrected-final202015.pdf” rel=”nofollow” target=”_blank”>operational guidelines and CBN requirements for operating a bureau de change business.
These guidelines usually conform to international best practices and are as follows:
1. The intending individual/corporate body seeking to operate a Bureau de Change must apply for a license from the governing financial institution in the host country.
2. The intending individual/corporate body must offer currency exchange services as a stand-alone service.
3. You will be required to make a refundable or non-refundable (varies from one country to another) application fee for the license
4. A detailed feasibility report showing items such as the composition of the board and management personnel, financial projections, organizational structure of the Bureau as well as other stipulations.
5. Evidence of the ability to pay minimum start-up capital which varies from country to country.
6. A due diligence of the members of the board of directors as well as management staff as people of unimpeachable character, with no criminal records.
7. Adhering to the money laundering laws of the host country.
Do you desire to start a Bureau de Change business? The following tips will come in handy for you:
a. Carry out a Detailed Feasibility Report
You cannot venture into this business blindly. It is a capital intensive business; hence you have to determine your target markets, your potential business structure, prevailing guidelines/stipulations regarding registration/operation as well as other pertinent information.
With information comes the wherewithal for you to determine if you possess the resources: mental, human and financial, to successfully run a Bureau de Change.
b. Intern at an Existing Bureau de Change
Remember the saying that experience is the best teacher? It could not be more apt for you to garner some experience working at an existing Bureau de Change, in order to have a total grasp of the workings of the business.
Your time as an intern will expose you to the daily operations in a Bureau de Change such as sourcing for foreign currencies, interacting with customers and regulators, staff engagement, interpretation of foreign exchange rates as well as other issues pertinent to the successful running of the business.
c. Have a Business Plan
The importance of a Bureau de Change business plan cannot be over-emphasized. This document must be drawn up before you even apply for a license.
A detailed business plan will help you make financial projections and how you intend to meet your objectives, your target market, the role of the competition, future/anticipated trends that may affect your business as well as other relevant parameters.
A thorough business plan not only singles you out as a serious minded entrepreneur but you could also use it to obtain financing from banks and angel investors.
d. Find a strategic Location
A bureau de Change is only as viable and as successful as how easy it is for your customers to reach you for their needs.
You must understand that currency conversion is an on-the spot requirement, hence you must be easily reachable for transactions. Plausible locations for your physical premises include airports, seaports, travel agencies, banks and other strategic places.
You take your Bureau de Change business up a notch by offering your customers an online platform to place their orders; depending on the regulatory stipulations that guide your operations
e. Obtain the Necessary Equipment and Engage the Appropriate Staff
Your bureau de change business will need to possess necessary gadgets such as currency counting machines, cash registers/tills, calculators, computers, safe deposit boxes and reinforced cabinets amongst others.
You will also have to engage the services of competent and people-friendly staff, who serve as the first point of contact with your customers.
Your business will also have to comply with other non-financial stipulations such as the availability of fire extinguishers and safety gear.
f. Choose an Appropriate Business Structure
Will you run the bureau de Change as a sole proprietor? Or will you constitute a board of directors, backed up by a management staff? You will have to choose the business structure that conforms to the minimum stipulations guiding the licensing of the Bureau de Change business model in your home country.
A Bureau de Change business is a very lucrative venture that guarantees a handsome ROI on your investment.
However, Bureau De Change Business is also a business that you must administer diligently, due to the volatility of the currency market and the dynamic nature of financial/fiscal regulations.
Here is a complete bureau de change business plan for your use, share.