Nonprofit Insurance Program

How to Create a Nonprofit Business Plan

By Alexa Connelly
February 18, 2013

Starting a business, whether it is a nonprofit or for profit operation, is a complex undertaking.  However, setting up a nonprofit business can often require more work due to the tax laws that you need to know to maximize your organization’s efficiency.  That is why it is so important to build the business on a firm foundation.  The foundation of any business is the business plan.

A business plan shouldn’t be long.  It must be written clearly and concisely.  Everyone, from the directors down to the employees, should be able to understand the items outlined in the document.  Confusing or ambiguous language, no matter how intelligent it may sound, will only hinder the progress that the nonprofit can make.  The best way to make sure that the business plan is easy to read and understand is by dividing it into four distinct sections.  None of these sections needs to be any longer than six pages at the absolute most.

The first section of any business plan is the mission statement.  What unites all nonprofit organizations is that they all have very proactive and clear mission statements.  The basic definition of the mission statement is that it is the reason why the business exists.  If the goal of the organization is to feed the homeless, that should be the organization’s mission statement.  These mission statements should only be one to two sentences in length.  That way, they will be easy for anyone in the nonprofit to easily remember.  The statement needs to address the purpose, the method, and the values with which the goals of the business can be accomplished.

The second section of the business plan that should be written, when setting up a nonprofit, must address the particular objectives, goals, and activities of the organization.  This section can be vague or detailed, depending on what suits you.  You need to ask yourself a number of questions when writing this second business plan section.  Define the goals that are the most important.  What does the nonprofit need to accomplish?  How long will it probably take to effectively accomplish these goals?  What are the objectives that take priority?  What obstacles can be observed standing in the way of your meeting these top objective priorities?  What resources need to be obtained to get these objectives met?  What activities, such as fundraisers and other social events, can you employ to get awareness, raise money, and accomplish the goals of the organization?  For example, maybe a car wash or bake sale would be a good ways to raise funds?

In the third section, you must define the current resources when setting up a nonprofit.  These resources aren’t solely limited to capital.  The assets and amount of money held by organization owners and a list of expertise, literature, and property should be included in this section.  Maybe the owner has a warehouse which could be used as a place for foster children to congregate for fellowship.  Resources can include counters, employees, technical equipment, vehicles, office supplies, celebrity friends, presentation equipment, media contacts, sponsors, and political allies.

In the fourth and final section of any well-written business plan, strategic analysis should be given.  This should read as a sort of case study.  This means that it can pinpoint hurdles that will need to be overcome and strategies to deal with situations that are specifically outlined in the document.  Threats, strengths, opportunities, and weaknesses are all things that need to be identified and appropriately addressed within this section.

A good business plan will make your nonprofit a success.


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