Steps for Starting a Non-Profit Business

The National Center for Charitable Statistics states that there were over 1.5 million non-profit businesses operating in the United States in 2009. Starting a non-profit business is similar to starting businesses that are for-profit in that it involves planning, marketing and leadership. The main difference between a for-profit and non-profit business is that shareholders and owners of non-profit businesses do not get a cut of the earnings. Running a non-profit business is a rewarding entrepreneurial experience once you get the ball rolling in the right direction.

Instructions

1. Determine the need for your services with market research. While it is important to have a passion for your cause, it is also important to have a need for a non-profit business like the one you have planned. The National Council of Nonprofits states that a lack of need will equal a lack of funds. Need may be based on the existence of similar non-profit businesses in your area, your target client and cause.

2. Create a business plan. A business plan will help you define the purpose of your non-profit and detail the needs it will address, and can help you attain funding. In your business plan, explain your non-profit's services and how these will meet a need in the community. Explain how you plan to obtain funding, and how you will market and create a demand for your services. Additionally, list your non-profit's name, resources, location and business name, and outline your professional experience and skills.

3. Write bylaws for your non-profit business. Bylaws are the policies and procedures for your non-profit business that describe the business, details information about the directors and officers in it, outline a procedure for board meetings and states how records are to be kept, prepared and inspected. The bylaws should also state the procedure for amending the policies and procedures.

4. Set up a board of directors. Small Business Trends states that your board should have individuals who have expertise in the issues your non-profit will address, have an interest in your mission and be able to dedicate the time to serve on the board. They should not have any conflicts of interest.

5. Incorporate your non-profit business and apply for federal and state tax-exempt status with the Internal Revenue Service. To incorporate your business, you must file articles of incorporation with your state's business entity registration office.

6. Raise funds. Funds are what help get your non-profit business going. You can seek funds through private and public donations and grants.

References

• National Center for Charitable Statistics: Quick Facts About Nonprofits
• Society of Nonprofit Organizations: Starting A Nonprofit Organization
• National Council of Nonprofits: How to Start a Nonprofit | Step 1: Research
• Small Business Trends: 8 Essential Steps to Starting a Non-Profit Organization
• U.S. Small Business Administration: Non Profit