Business Planning for a Nonprofit Enterprise
Companies with a business plan have the best chance for success. This is true for nonprofit enterprises as well because they, too, must operate in a competitive environment. They have to compete for donations, grants and other forms of support. The classic business plan provides a time-tested format for planning a successful enterprise. Writing a business plan forces the leaders of the organization to visualize the challenges they will likely face and decide on strategies in advance.
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The Organization
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Early in the planning process, management will have to incorporate the organization and establish its status as a tax-exempt, nonprofit entity under Section 501 (c) of the United States Internal Revenue Code. Include this information in the business plan, along with descriptions of key staff positions, both paid and unpaid, and give the duties of key members of the staff.
Mission and Objectives
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After conducting a thorough needs assessment, which should reinforce the founders' vision for the new organization, management will have the information it needs for creating a mission statement and establishing the organization's objectives. One of management's first acts should be to document the mission statement and the main objectives in the business plan.
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Operations
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Management should give a clear description of how the staff will function and how the organization will achieve its objectives. Tell the reader how the organization will go about raising funds, increasing its visibility through public relations efforts and qualifying for support from major foundations and, perhaps, government entities.
Financial Projections
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The financial section of the business plan should include the current financial statement (balance sheet, income statement and cash flow statement), financial projections for the next three years and the economic assumptions that contributed to the projections. For example, the organization may have received assurances of future contributions from major foundations.
Management
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The business plan should have a section devoted to the members of the management team, members of the board of directors and other key participants. Include brief biographical summaries of each person, being sure to include educational backgrounds, professional or business experience and the members' responsibilities in the organization. It is appropriate to include outside team members, such as accountants, attorneys and consultants.
Executive Summary
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When the business plan is complete, the management team should decide on the most important and compelling items of information in the plan and include them in an executive summary. This section is important because often it is the only part that will be read. In those cases, it serves as a mini business plan. This should be written last -- so that nothing is missed -- but placed first in the published business plan.
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References
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