How to Create an Effective Business Plan for Nonprofit Organizations
You can create a business plan for nonprofit organizations
using a similar approach to creating any other business plan.
That may seem daunting. Don’t let it be.
Your plan provides structure to define your organization. It
states your goals (Executive Summary), the needs your goals help meet (Needs
Statement), and a roadmap to achieving them (Business Strategy.)
is particularly useful when seeking funding or making a presentation to a
funder. Use your business plan to connect the dots between the wonderful work
you do and the resources needed to do it.
(Get a more detailed information for writing business plan elements here.)
Three major components of a business plan for nonprofit
I. Executive Summary
The Executive Summary provides key information for readers
who need to understand your nonprofit.
- Offer a concise overview of your organization
- List organizational identity information, including your
mission statement and vision statement.
- Provide a brief organizational history
- Explain the services you provide, where you provide them,
and additional subsidiary locations
- Describe your board of directors and its role
- List the types and number of employees needed
- Summarize your funding sources
- Outline short- and long-term funding sustainability plans
II. Needs Statement
The Needs Statement (sometimes called a Market Analysis) makes the case for your services through
market analysis, data, and facts.
- Explain the documented need for your service, using concrete
- Outline what other organizations meet this need or provide a
similar service – and what overlap and services will exist with yours, if any.
- Describe your target beneficiaries: who are they? Where are
they located? How many are there?
- Explain what happens to your target beneficiaries if you do
not provide your service or meet the need.
III. Business Strategy
This “how-to” portion of your business plan describes the
way you will deliver services.
- Outline how your nonprofit will be organized, including an organizational chart which lists board of directors and staff responsibilities
- Provide job descriptions for key staff members
- Give an explanation of your plan to deliver services
- List a summary of your offices, location(s), equipment, inventory
- Describe your programs, including staff and volunteers needed, how programs will be implemented, and how program success will be measured
- Explain how you will communicate about your nonprofit to reach three different constituencies: your beneficiaries (so they can find out about your services), your donors or prospects (who provide resources for your work), and the general public (so you can eventually partner with them as beneficiaries or donors.) A good marketing strategy includes a mix of print, electronic, and face-to-face tactics.
- Provide an annual budget with revenues and expenses
- List your funding sources, including grants, loans, gifts, in-kind gifts, pro bono services, and fees
- Detail outstanding loans, debts, holdings, bonds and endowments
- Explain your partnerships with collaborators, particularly if you share workspace or employees, and the responsibilities of each
Extra Tips to Write Business Plan for Nonprofits
- Start simple. A business plan can (and should) change over
time, becoming more sophisticated as your organization grows.
- Where possible, use graphs and charts to demonstrate data.
- An effective business plan usually covers a time period of
no more than 1 year.
- Re-visit and re-write your business plan annually.
More on Writing Business Plan for Nonprofit Organizations
Pre-writing steps to writing a business plan ...
Quick business plan writing tip ...
Writing business plan elements: what should you include?
Business plan writing tips to make the process easy and quick ...
Strategic planning for nonprofits: what it's all about ...
Elements of a nonprofit strategic plan ...
Your elevator speech: can you explain your nonprofit in 30 seconds?
USP: your nonprofit's Unique Selling Proposition ...
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