Joseph, Director at Wise Business Plans, has overseen 15K written business plans, raising over $1Bn in funding in more than 400 industries.
Starting a nonprofit can be rewarding for everyone involved, from the organization’s leader to the people and communities it helps. But it’s a mistake to run a nonprofit differently than you would any other business you want to succeed. Although by definition, a nonprofit is not intended to be a money-making venture, your organization will still require and manage funds, often provided by caring individuals in the community.
That’s why having a professional and well-prepared nonprofit business plan is vital to your success — whether you’re a seasoned business development professional looking to do more outside your regular role or a new-to-business leader working to improve the world around you.
Read on for three reasons why having a nonprofit business plan can supercharge your organization and make the funding and growth processes easier.
1. Running your nonprofit like a business instills confidence and shows respect for those looking to get involved in your cause.
Even when your intent isn’t to make a profit or even a living from the organization you’re creating, you will ask for and manage other people’s money and time. And, as we all know, time is an investment as big as — sometimes bigger then — cash. Creating a solid and easy-to-understand business plan with clearly indicated goals, financial projections and a careful overview of your nonprofit’s intent helps create buy-in and excitement about your goals. It also shows that you take seriously the consideration and assistance of those you are reaching out to for support. One additional benefit: When you treat any project with professionalism from the beginning, it also helps keep your own enthusiasm high.
2. A well-crafted business plan makes writing grant proposals and other outreach materials much easier.
You may have been told that having a grant proposal is the same as a business plan. While the two share many similarities, they are not the same. Proposals are targeted documents that should reflect the specific details of the organization with which you’re hoping to work. A business plan, on the other hand, is a master document. You can use parts of your plan to create new proposals must faster. Since your plan will have been fully edited and reviewed, you can be sure your proposals and other company communications provide a unified voice and a cohesive message. A strong business plan also puts the most important information about your nonprofit right at your fingertips, making it easier to answer questions, craft news releases or even plan upcoming events and fundraisers.
3. You’ll still need to develop a relationship with a banking institution.
In addition to finding the right bank to manage your nonprofit’s account, you may find yourself in a position where getting the funding you need means considering a nonprofit business loan. While bank loans are often difficult for nonprofits to obtain, that’s where a professional-quality business plan can shine. Approaching a bank, sponsorships, donations or grants after performing the same kind of due diligence any other small business would perform gives you a head-start in the funding process.
In addition, planning for potential new hires, equipment needs and other possible expenditures can help you fight against ‘reactive’ funding, which many nonprofit organizations struggle to avoid. Rather than waiting for a particular funding need to pop up, then reacting by scrambling to raise money, a good business plan helps you stay proactive by anticipating some funding needs in advance.
Creating a nonprofit can be one of the most unselfish decisions you’ll ever make. That doesn’t mean you can’t find ways to streamline the process, make things run more efficiently and find new funding more easily.