Why Business Plan For Non-Profits is Important?
A non-profit business is one which is considered to be “tax-exempt” by the government and the IRS, usually due to social causes, public benefit, and altruistic activities the organization provides. Now, do NPO’s need business plans?
A business plan is not only intended for for-profit businesses and their income balance sheets – but it is also to help acquire donors/grants/sponsorships and other funding methods for your company. Without this, your non-profit business will fail. Remember, a business plan is like a blueprint for your company: it helps set you right on track and assemble only the necessities needed. The nonprofit nature of an organization should not derail it from having a clear business roadmap or any other business specifics in that matter.
Another increasingly prominent benefit of a nonprofit business plan is the improved chances of business loan approval. Though traditionally nonprofits don’t get business loans, there is a rising number of programs that provide NPOs with working capital loans.
Without a business plan, chances of you being granted sponsorships, having corporate donors, and charitable contributions will be 0 to none. If you plan to secure the support and revenue that will be needed to keep the NPO engine running – you must have a business plan.
So, what exactly is needed for a non-profit business plan?
Executive Summary – This is a brief summary of your company and what it entails. It is what future investors will be reading, and if they are satisfied with what the executive summary describes, they may become potential donors.
Financial Plan – The most crucial and important part of the entire plan. To bring an idea of a nonprofit organization into life, the founders need sponsors and capital. This proves if your organization is liable for sponsors and donors to invest in. This must include sales, personal loans from individuals, endowment funds, institutional donations, governmental grants.
Marketing Strategy – Look at this as a roadmap to transform your organizations missions into actual goals. Your marketing strategy will not remain the same – it will change as your NPO grows and develops. This outlines your business and assembles where it will fit in the market and economy.