Writing a business plan is a major undertaking. While most of us are accustomed to thinking of business plans as being a must for investors, they’re just as important in the world of nonprofit organizations.
At Addition Financial, we’ve worked closely with nonprofit startups. One of the most common questions they ask us is:
"What should I include in my nonprofit business plan?"
It’s an important question to ask. Your nonprofit business plan will define your goals and help you attract experienced board members, employees and donors. We’ve put together this sample nonprofit business plan to show you what you should include when you write your business plan.
At the beginning of your nonprofit business plan, you’ll need an executive summary. It must be concise and contain a clear and compelling statement of your mission.
Because it is so important, the executive summary is often the last part of a business plan to be written. It should summarize your market analysis, lay out why there is a need for the services you’ll provide and explain why you are qualified to provide them.
We suggest doing a rough draft of the executive statement to start. Then, you can refine it as you go along and revisit it at the end to put the final touches on it.
Products, Programs and Services
In this section, you’ll lay out the specific information on what your nonprofit does.
You’ll need to include:
- The products or services you’ll sell
- The social programs you’ll provide
- The benefits the community will derive from your presence
- The needs you’ll meet and your plans for meeting them
Another way of looking at this section is that it explains how you’ll fulfill the mission statement in the executive summary.
Customer and Market Analysis
Next, you’ll need to expand on the summary market analysis that you put into the executive summary.
Here, you should include:
- An explanation of the issues that made you decide to start a nonprofit
- Details about the number of people affected, who they are, where they live and how your organization will reach them
In this section of your nonprofit business plan, facts are the most important thing. Make sure to be meticulous in your research and include as much relevant information as possible.
No nonprofit organization can survive without a marketing plan to help it reach its target audience – which includes both the audience you serve and your potential donors. You should include the four Ps: product, price, place and promotion.
Here’s what to include in each:
- Product: Every item, service or program you plan to provide
- Price: The cost of the products you sell and the services you provide
- Place: Your planned physical location as well as information about your web presence and any distribution channels you plan to use
- Promotion: Explain how you’ll get people to use your services and/or make donations to your cause
It’s also a good idea to include a section on customer and donor retention, since many nonprofits rely on repeat donations to stay afloat.
In this section of your nonprofit business plan, you’ll explain the specifics of how you plan to meet the goals that you specified in the Products, Programs and Services section.
You’ll need to include:
- Short-term processes, which are the day-to-day tasks that will allow you to run your nonprofit organization.
- Long-term processes, which are the methods you plan to use to meet your growth goals. These may include plans for expanding your services or opening new locations.
Think of the operation plan as the nuts and bolts of your organization. It’s where you’ll demonstrate you have a vision for the future of your organization and a plan to get there.
Management Team/Organizational Structure
It’s important to have an experienced team to run a nonprofit. In this section, you’ll identify your primary team and board members, including details about their work backgrounds and relevant expertise. You may also choose to include your advisory board members, if you have them.
You should draw an organizational chart that shows:
- Levels of management
- Chains of commands
- Financial sponsors
- Other key players not mentioned here
- Current and future staffing needs
This section allows you to highlight the team you’ve assembled. Your focus should be on demonstrating why this is the right team to help you reach your organizational goals.
Your financial plan is where you’ll identify the different sources of funding you plan to use. You should include any outstanding loans and debts.
You should also:
- Summarize your past and future cash flow statements.
- Summarize your past and future balance sheets and income statements.
- Describe your fundraising plans.
- Identify gaps in your funding.
- Articulate your plans for distributing excess funds.
- Disclose salaries of key employees.
Transparency is essential for any nonprofit. Make sure that this section includes a full disclosure of your finances as they are now.
The final section of your nonprofit business plan is the appendix. This is where you’ll attach any supporting documentation. At a minimum, it should include your most current annual report, a copy of your strategic plan, full financial projections and promotional materials.
Writing a nonprofit business plan takes time. The key is to include the sections we’ve outlined here. As long as you use clear language and focus on transparency, you should end up with a business plan that will help you achieve your organizational goals.
To learn how Addition Financial’s checking accounts for nonprofits can help your organization, please click here now.