Does Your Nonprofit Need a Business Plan?

January 12, 2015

A business plan is like a road map. It can help you get where you’re going. It also can tell you that it may not be a good idea to begin the journey.

Whether it’s in the for-profit or nonprofit world, money is the fuel that provides the power to run an organization. In the for-profit world, a business plan helps convince investors to either lend or commit their money to an organization. In the nonprofit world, a business plan can be used as a basis for grant proposals, fundraising projects, staffing and operations.

How do you get started? The first thing to consider is who will write your plan. It may be a good idea to find someone who can be totally objective and ask the cold, hard questions that need to be asked.

The following is a short list of questions a business plan should address:

• What costs are involved in delivering services?
• How many staff members will be needed, and what kind(s) of skills should they have?
• From where will the services be provided?
• What are overhead costs? This last question should take into account all costs, preferably over a three-year period.

Other questions to be answered include:

• How will costs be paid for?
• Who will pay for services and how much?
• What funding sources are available – grants, foundations, individual support?

There are three basic items that must be included in a business plan: Program, Operations and Financials. Each section should be expanded on by including the following:

Program – Needs assessment, program description and community partners

Operations – Organization, governance, staff, start-up needs and/or ongoing operational needs, communications and outreach, program evaluation, and problems and solutions

Financials – Start-up income/expenses, ongoing expenses and projections

Your CPA can help you write a business plan for your organization to get you on the road to success.