Many non-profits, particularly smaller charities and start-ups, operate without a business plan.
Just because an organization is described a “nonprofit,” that doesn’t exempt it from running like a business — a nonprofit is a type of business, and many of the same rules that apply to a for-profitable business also apply to a nonprofit organization. You need both a business plan and a strategic plan to guarantee success.
The problem is, nonprofit organizations simply put together a host committee or volunteer group and directly start their business. They may send out a letter here and there and do some donor meetings, and when the bank account seems to be low, they often go into “panic mode” and race around trying to find the cash to keep the doors open.
This is definitely not the best way to run your nonprofit business. Even if your nonprofit is out of cash, running an un-organized and unplanned business is an invitation to stress, headaches, and ultimately… financial ruin.
Furthermore, without a nonprofit business plan, you’ll have a harder time securing loans and grants, attracting corporate donors, meeting qualified board members, and keeping your nonprofit on track.
So, how do you avoid this fate? The best way is by having a written nonprofit business plan.
Business planning is a process of answering, “What problem(s) are we attempting to solve?” or “What are we working to achieve?” But also, “Who will lead us there, by what time limit, and how much money and other support, will it demand?”
The business planning process takes into account the nonprofit’s mission and vision, the role of the board, and external environmental factors, such as the climate for fundraising.
Ideally, the business planning process also takes into consideration the potential for differences in fundamental assumptions about the nonprofit’s working environment.
For example, many nonprofits rely on government contracts or donations. What if the particular sources of benefits that exist today changes tomorrow?
A business plan can help the nonprofit and its management team to be prepared for future risks, by answering questions such as, “What is the possibility that the outlined activities will remain as it is? or that our current revenue streams will continue to provide this level of revenue? And what is Plan B if something doesn't work out?
How to write a nonprofit business plan?
As we said earlier, a nonprofit is a type of business, and many of the same rules that apply to a for-profitable business also apply to a nonprofit organization.
Now that, there are similarities between the two type of businesses, you'll find details about how to write a business plan directed toward for-profit business will still be useful.
Developing a business plan for nonprofit organizations is, however, a little different than creating a business plan for a for-profit business. While each type of business plan has similar components, there are some differences between the two which you should consider when working on your nonprofit business plan outline.
For example, even the reason why you've decided to create a business plan for your nonprofit organization will probably be different than the reasons why a for-profit organization requires a business plan.
Many businesses, particularly small businesses, engage in the business plan process because they require funding via a bank loan or some other source of credit.
A nonprofit organization is more likely to need a business plan for other reasons, such as gaining the support of important, potential donors or to get a government grant.
Every element in this nonprofit business plan template should be ideal for your organization, but you might discover additional elements which will help to strengthen your nonprofit business plan which can attract donors and potential board members, as well as provide a road map that highlights what you want to accomplish with your nonprofit organization.
Nonprofit business plan template outline
This nonprofit business plan template includes the following sections:
- Executive Summary
- Organization summary
- Marketing Strategy
- Fund request and its utilization
- Founding Members
- Products, Programs, and Services
- Customer and Market Analysis
- Marketing Plan
- Operational Plan
- Team Members
- Management Team
- Advisory Board
- Impact of a Nonprofit
- Personnel and Operating Expenses
- CashFlow Statement