Business Planning For Non-Profits
If an organization is not intended to earn profits, it does not need a business plan. Or at least that is what most people think!
However, fact of the matter is that even a nonprofit intended for the ‘greater good’ will work like a business and needs a well-crafted business plan to guide its operations. Moreover, the same business plan will enable the nonprofit to get finding for its noble works.
Following is a broad look at how a business plan can help a nonprofit organization:
- Determine viability: Just like a for-profit business needs to evaluate whether there actually is a substantial market for the product or service, a nonprofit should clarify if the program, project or service to be offered is actually needed or not. Conducting a “needs analysis” of the target population will resolve whether the proposed idea is feasible or just too outdated.
- Establish strategy: The very process of drafting a business plan will help the nonprofit to clearly define its mission and how it actually intends to achieve the goals. The people behind the nonprofit will have to dwell on specific strategies for implementing the program/service, explore various marketing tactics to reach the targeted people, detail communication and promotion channels and so on. Ultimately, the business plan will enable the nonprofit to determine whether it is staying on track and evaluate its progress as well.
- Obtaining a grant — A grant from the government or private foundation does not have to be repaid unlike regular business loans. However, the concerned authorities will not loosen the purse strings until they are completely convinced that their dollars will be used in a planned manner for social good.
- Winning donations: Just like grant agencies, private donors can be generous with their funds, but not before they clearly comprehend the strategic planning for use of the same. They want to know what you offer, what need you are trying to fulfill in the society and how you will reach it before parting with their valuable dollars.
- Getting a member on board: The nonprofit will plan to recruit a distinguished set of board members. These people will in turn want to understand everything from the organizational structure, management team and physical location to the services and programs, capital structure and operational strategies before deigning to give a nod.
- Using the finances: The nonprofit may have got the funding, but what will it do with the same? A business plan will clearly describe the kind of funds needed and strategize the use of those funds. It will also enable the organization to keep track of how the funds are actually used and provide accountability for the same.
It follows that professional business plan consulting will help a nonprofit as much as it helps a for-profit business. Business plan consulting will design a well-thought out business plan and this should be revised as and when needed.