Business Plans

Strategeries helps nonprofits develop effective business plans.

A business plan is about money. It explains how the internal abilities of an organization match the external demands of its market. It outlines the strategies that the organization will use to move others to spend money -- donations, contracts, memberships, product sales. Nonprofits, provide products or services that generally do not focus on profits for their shareholders, but instead generate public improvement.

Business plans are especially helpful to many nonprofits as they explore the "value proposition" as it is commonly called. That is: What are you offering to the community, and how do you know the community wants the service or product? With two audiences, the funders and the consumers, this exploration of markets is tricky for nonprofits. While consumers might provide a need, they may not provide viable revenue streams. Just one example of this quandry is the very real need for support and resources to youth "aging" out of foster care, and the lack of financial resources to support them. Creating revenue streams is a key to solving this social problem. The revenue will probably come from new, untapped sources.

Some of the expertise and activities of nonprofit organizations, working toward their mission, do produce revenue above expenses. A meaningful nonprofit business plan includes a road map of how to succeed in earning revenue from all sources, including grants. Revenue from non-grant and non-contractual sources can then be used to cover costs not covered under contracts and grants. A good plan must describe the following:

Benefits customers get from paying money to the organization.
Influences in the decision-making processes that various customers use to spend their money with the organization.
Revenue mix and how it corresponds to the abilities and capacity to generate money and use money toward the mission.
Methods that the organization will use to maintain competencies to generate future benefits.
Strategies to handle change and uncertainty.

Nonprofits share the challenge of providing for their survival and the challenge of being able to determine their own destiny. Successful nonprofits in the future need to determine how their internal abilities, efficiencies, and effectiveness will enhance their ability to generate sufficient money.