How to write an effective business plan for your Nonprofit
Are you thinking about starting a nonprofit organization? Or maybe you’ve already started one and are looking for ways to make it more successful. Either way, one of the most important things you can do is create a strong business plan.
A good business plan will help you articulate your organization’s mission and goals, and map out a path to achieving them. It will also give you a framework to track progress and measure success.
If you’re not sure where to start, don’t worry. We’ve got you covered with this step-by-step guide to writing an effective business plan for your nonprofit.
Define your nonprofit’s purpose
Your nonprofit’s purpose is its reason for existence. It’s the problem or issue that you’re addressing in your community, and it’s the difference that you hope to make. A clear, concise statement of purpose is the foundation of any good business plan, because it defines both what you’re doing and why you’re doing it.
To write a strong statement of purpose, start by thinking about your nonprofit’s history. Why did you start this organization? What need were you trying to fill in your community? Once you’ve answered those questions, distill your answers into a single sentence or short paragraph. This will be the heart of your purpose statement.
Next, think about who your nonprofit serves. This might be a specific population (like low-income families or seniors) or a geographic area (like a city or neighborhood). Again, distill this down to one sentence or short paragraph.
Finally, think about what difference you want to make in the lives of the people you serve. What problem are you trying to solve? How will things be different once your work is done? Once again, distill this into one sentence or short paragraph.
Bringing all of these elements together, you should now have everything you need to write a strong purpose statement for your business plan. Keep it clear, concise, and focused on the problem that you’re solving in your community.
Do your research
The best business plans come from research. They don’t just come from the head of the organization. In fact, many small nonprofits never actually sit down and write a formal business plan.
The problem with this is that a business plan is not just a document; it’s a framework for thinking about your nonprofit in a strategic way. It forces you to look at the big picture and think about what you want to achieve and how you’re going to get there.
If you don’t have a formal business plan, that’s OK. But you should still do your research. There are plenty of resources out there to help you understand the basics of business planning. The SBA has a helpful guide, as does For Purpose Law. And once you’ve done your research, you can start putting together your own plan.
Outline your business plan
Whether you’re starting a new nonprofit or expanding an existing one, you need a solid business plan. Your business plan is a roadmap that will guide you through the early years of your nonprofit. It will help you make decisions about your organizational structure, fundraising strategy, and programmatic focus.
The first step in writing your business plan is to outline your organization’s goals, values, and purpose. What is your nonprofit’s mission? What problem are you trying to solve? What population do you serve? Once you have a clear understanding of your organization’s purpose, you can begin to map out your strategy for achieving your goals.
Your business plan should include:
-An executive summary
-Your organization’s history and current state
-A description of your target population
-Your mission statement
-Your organizational goals and objectives
-A description of your programs and services
-A marketing and communications plan
-A fundraising plan
-An operating budget
Set realistic goals and objectives
It’s important that your business plan sets realistic goals and objectives. Be specific about what you hope to achieve and when you hope to achieve it. Your goals and objectives should be achievable and should align with your mission statement.
Your nonprofit business plan should include:
-A description of your nonprofit’s purpose
-Your nonprofit’s goals and objectives
-An overview of your target market
-A description of your marketing plan
-A description of your fundraising plan
-A description of your financial projections
Develop your marketing strategy
In order to reach your target audience and achieve your fundraising goals, you need to develop a marketing strategy for your nonprofit. This will involve research into your target market, as well as planning and execution of various marketing initiatives.
Your marketing strategy should be designed to promote your nonprofit’s mission and deliver your message in a way that resonates with your target audience. It should also be flexible enough to adapt as your nonprofit grows and changes over time.
Here are a few tips to help you get started:
1. Know your audience: It is important to have a clear understanding of who you are trying to reach with your marketing efforts. This will help you determine the best channels to use and the most effective messaging.
2. Define your goals: What do you hope to achieve with your marketing strategy? Be specific and realistic in setting objectives that can be measured over time.
3. Set a budget: Nonprofits have limited resources, so it is important to allocate funds wisely when developing a marketing strategy. Make sure to consider both the upfront costs and ongoing expenses associated with each initiative.
4. Create a timeline: Establishing a timeline for your marketing strategy will help ensure that initiatives are executed in a timely manner and results are tracked effectively. consider the overall lifecycle of each project when creating your timeline.
5. Develop promotional materials: Once you have determined the best way to reach your target audience, you can begin developing promotional materials that deliver your message in an engaging and visually appealing way
Create a financial plan
Every nonprofit is unique, so your business plan might look different than another organization’s. But there are certain elements that all good business plans should have. Here’s what you need to include in yours.
1. Define your nonprofit’s purpose
What problem are you trying to solve? How will your nonprofit go about solving it? Be clear and concise in your answers.
2. Do your research
Before you can start writing your business plan, you need to have a good understanding of the current landscape of the issue you’re trying to tackle. What programs or solutions already exist? How will your nonprofit fit into the existing landscape? What sets you apart from other organizations working on similar issues?
Your research will also help you develop realistic financial projections for your nonprofit. You need to have a good understanding of the costs associated with running your program or providing your services.
3. Create a financial plan
Your financial plan should include:
-A detailed budget for your first year of operations
-A fundraising plan that details how you will generate revenue to support your work
-A three-year financial projection that shows how your nonprofit will grow over time
If you’re applying for grants or other types of funding, many funders will require you to submit a copy of your business plan along with your application. So it’s important to have a well-written, clearly organized plan that articulates your mission and how you intend to achieve it.
Write your executive summary
The executive summary is the first section of your business plan—and it is one of the most important. The executive summary should be no more than two pages long, with brief summaries of other sections of the plan.
Your executive summary should include:
-The problem your nonprofit will solve
-Who you are
-Your target market
-Your competitive landscape
-Your business model
-Your financial projections
Put it all together
After you’ve gathered all the information you can, it’s time to start putting your business plan together. This is where you’ll really get to show off your creativity and critical thinking skills.
There’s no one correct way to format a business plan, but there are some basic components that should be included:
-An executive summary. This is a brief overview of your nonprofit, its mission, and what you hope to accomplish.
-A description of your nonprofit. This should include detailed information about your programs and services.
-A marketing analysis. This is where you’ll assess your target audience and competition, and develop strategies for reaching your audience.
-A financial plan. This is where you’ll lay out your income and expenses, and explain how your nonprofit will be sustainable in the long term.
Once you have all the components of your business plan in place, it’s time to start writing. Remember to keep your language clear and concise, and make sure all the information in your plan is accurate. If you’re not sure where to start, there are plenty of resources available online to help you get started.
Make sure to get feedback from your colleagues, board, clients, and others who might be impacted by your business plan. Too often, business plans are written in a vacuum without getting input from the people who will be using it. Getting feedback early on will help ensure that your final product is useful and relevant to your intended audience.
Revise and update
You’ve written your business plan and your nonprofit is up and running. But what happens when things change? Do you just file away your business plan and forget about it, or do you revise and update it on a regular basis?
The answer is that you should revision and update your business plan on a regular basis, at least once a year. This will help you to keep track of your progress, make any necessary changes to your plans, and monitor the effectiveness of your programs.
When revising your business plan, start by looking at your mission statement. Has anything changed that would cause you to amend or clarify your mission? If so, make the necessary changes.
Next, take a look at your goals and objectives. Are there any new goals that you need to add? Are any of the existing goals no longer relevant? Make sure that all of your goals are SMART goals: specific, measurable, achievable, realistic, and time-limited.
Then, examine your programs and services. Have any of them been added or discontinued since you last updated your business plan? Make sure that all of the programs and services described in your plan are still accurate.
Finally, take a look at your finances. Have there been any significant changes to income or expenses? Make sure that your financial information is up-to-date and accurate.
By revising and updating your business plan on a regular basis, you can ensure that it remains a valuable tool for guiding the development of your nonprofit organization.