Sample Holding Company Business Plan Template

Do you need help starting an investment holdings company? If YES, here is a sample holding business plan template & feasibility report you can use for FREE.

They say failing to plan is planning to fail. It is about a similar matter that we seek to draw your attention to. Many times, businesses fail due to lack of proper planning. We will focus on a holding company with this holding company business plan sample.

A holding company is a parent company which may not produce and advertise goods and services of its own but has a sole purpose of owning authorized financial assets of other private companies to form a single entity.

The parent company operates by holding enough voting assets or stock to predominate subsidiary companies by influencing the management of the companies. Subsidiary companies can be corporations, Limited Liability Companies, Partnerships or sometimes government or state owned enterprises.

HOLDING COMPANY BUSINESS PLAN PDF SAMPLE TEMPLATE

A holding company performs only investing, financing and managing activities other business activities such as purchasing of goods and services are carried out by the operating company.

Starting up a holding business is an easier task if you do it right.

Here is a free business plan for starting a holding company.

  • Analyze your Business Needs

Reduction of taxes and assets security are the two most common benefits of a holding company. A holding company can provide assets security of highly valuable assets of subsidiary companies, you should consider the benefits you want to gain from in starting up a holding company. The holding company also loans assets to subsidiary companies to perform their operating functions.

  • Decide your Business Structure

Holding companies are mostly of two structures, a corporation or a Limited Liability Company (LLC). To provide assets with maximum security and for a more profitable taxation you may decide to form two Limited Liability Companies in different states, a holding company and a subsidiary company.

The holding company would not be held responsible for the drawbacks of the subsidiary companies if you register and operate them as two individual entities. A limited liability company is not a corporation as it is the combination of the flow through income of a sole proprietorship and the fixed liability of a corporation.

  • Register your Holding Company

Make sure your holding company is in conformity with all laws and tax regulation of setting up a holding company in your state. After deciding your business structure, you will need to register your business with your state by providing details such as; business name, agent’s name, and an article of incorporation or article of association which contains important business information such as the purpose and goals of the business and officers or agent’s names and address.

You’ll need a unique name for your business, most holding companies have ‘holding’ attached to their company names.

  • Finance your Business

The subsidiary or operating companies need affirmation from your holding company that they are not at risk. Financing of the holding company is very important, you may seek financing from partners or other sources as you will need funds to start up a holding company.

The valuables of subsidiary companies are stored with the holding company, you should create separate company accounts for the parent and subsidiary companies and store all funds to be used for your holding company in its account.

  • Keep Records of your Company

Records should be kept on business dealings between your holding company and its subsidiary companies, the records of your holding company should be kept aside from that of the subsidiary company, employees working under the subsidiary company should also be paid by it as the holding company would only concern itself with the general control of the subsidiary.

Employ the services of an accountant who would keep tabs on transactions between the holding company and subsidiary company. The accountant would manage the cash flow and present accounting records from time to time.

Importance of keeping records;

  • To supervise the development of your holding company.
  • To prepare income and expenses statement and balance sheet.
  • Monitor tax returns.
  • To explain items on cash returns.

 

  • Operating

Sales of goods and services is categorized as an operating activity; these activities should be carried out by subsidiary companies. Holding companies should not carry out operating activities as they will not be held for creditors of the companies. The only condition where a holding company would be held responsible for the debts of its subsidiary is when the two companies are so entwined.

When starting up a holding company, most of the cash in the holding and operating companies should be kept in the holding company. The subsidiary company can receive loans from the holding company when its needed, but the holding company should not be subjected to the drawbacks of the subsidiary company.

  • Taking up Subsidiary Companies

You may have decided to set up your holding company to hold the shares of your operating company, but if not, you should take up smaller upcoming companies.

As named, the main function of a holding company is to hold. You may decide to set up a holding company for your smaller companies for its added benefits. Plan your business properly, take down business strategies, goals and objectives as well as business information for a successful holding company.

INVESTMENT HOLDING COMPANY BUSINESS PLAN EXAMPLE

This article will make this sample available for entrepreneurs having challenges in putting together a good plan for their holding businesses.

All you need to do is to read through this sample with the aim of getting a better understanding of how it should be done. Keeping it simple is an effective way to avoid common mistakes. It is also necessary to state that a feasibility study is vital to the success of your plan.

  • Executive Summary

Veritable holdings is the holding company for two major insurance corporations. These are Gateway Insurance and Hedge Secure. We own the outstanding stocks of these corporations. This allows for a significant reduction of risks of our two clients; Gateway Insurance and Hedge Secure.

We are not in any way involved in the production of goods. We are a service oriented business that serves only the interests of our clients.

  • Our Services

Our services are client-specific. We are in business to provide holding services for outstanding stocks. We are looking at expanding our corporate group to include more corporations. Through our services, we eliminate risks to varying degrees.

By owning the major shares of these businesses, usually 80%, we enable these businesses claim tax free dividends.

  • Our Vision

The holding services provided by Veritable Holdings are tailored to fit the most important needs of our partners. Through the adoption of global best practices, we will have a business model that is highly effective and efficient.

  • Our Mission

Our mission is not only to provide the best holding services to businesses within our corporate group, but to also provide same and even better improved services to future partners.

  • Financing

Our financing will be sourced mainly through borrowed funds. The loan application process has begun in earnest. We seek to raise the sum of $12,000,000.00 payable in 20 years. This has an interest rate of 2%.

  • SWOT Analysis

This is crucial to how effective our services are in the long run. We have commissioned a reputable business solutions services company to handle this aspect. The findings have given us a better perspective on what needs to be done. These are shown as follows;

  • Strengths

We have identified areas of our strength to be our understanding of how the holding industry works. The strength of our business lies in our partnerships. We have a strong sense of commitment to the ideals of excellent service delivery and client satisfaction. A good number of our hired professionals have worked with major and successful holding firms in the past. The experience gained has been immense and will be greatly beneficial to our smooth take-off.

  • Weakness

We are coming in at a time when the stock market is at its lowest ebb. The recent crash in stock prices has made the stock market less attractive to investors. This was mainly caused by a recession experienced in the economy. There are clear signs of recovery but it is very slow in picking up. The slower it takes, the more we will be exposed to risks.

However we have set a defined risk level beyond which we will activate our due diligence by pulling our stops until when conditions improve.

  • Opportunities

The opportunities ahead are far more than the likely risks we may face. As a reputable holding company in the making, we will be providing exceptional services as a strategy to build confidence in our business partners as having the ability to deliver. We will position ourselves as the preferred holding partners for future business relationships.

  • Threats

Threats are in the form of negative regulatory policies that may be introduced at any point before or during the commencement of business operations. An additional and more sinister threat presents itself in the form of a global economic recession. Its effects are ravaging! Although this does not happen often, it still is a threat we are faced with.

  • Profit Projections

Profitability is an important aspect of doing business. We have been careful to measure our level of profitability in relation to current demands for our services. A reputable business solutions provider was commissioned to conduct this analysis. The findings have been positive as it has shown a steady growth in profits as summarised in the chart below;

  • First Financial Year.        $9,000,000.00
  • Second Financial Year.   $15,000,000.00
  • Third Financial Year.       $30,000,000.00

 

  • Competitive Advantage

Our competitive advantage arises from our exceptional services driven by excellence and a strong desire to make our clients happy.

To ensure that our team of professionals put in their best, we have a commitment to providing the best working conditions that promotes productivity. This is in addition to the creation of an attractive remuneration package which is purely for the purpose of motivation.

  • Marketing Strategy

Our marketing strategy is geared towards doing business with the right kind of people. We have a world class marketing team that will design and coordinate all our marketing activities and efforts.

There you go! Our holding company business plan sample provides you with the help you need in writing yours. Before writing your plan, you need to have learnt as much as is necessary about your business through your feasibility study. This will make your plan more accurate and precise.

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