When you think of a writing up a business plan, the images that come to mind are of pitching to investors, return on investment calculations, profit forecasting, etc. But writing a business plan is just as important for nonprofit organizations as it is for those that are for-profit. In fact, given the challenges that go along with starting and sustaining a nonprofit organization, it may be even more important for a nonprofit business to have a clearly defined strategy and a sense of viability in the form of a written up business plan.
Here are five reasons why your nonprofit needs a business plan writer.
Many grant agencies require business plans before they approve anything. Just like investors or lenders, they want to make sure that their funds are being used in a well thought-out manner and that returns – or in the case of a nonprofit, social good – will come to fruition from the use of their funds.
With more than 1.4 million nonprofits in the United States, competition for funding is fierce. And with nonprofits still recovering from the recession, staying afloat is tougher than ever. “America’s charities have been traveling down a very rocky road in recent years,” says James Yunker, Chairman of the Giving USA Foundation, a philanthropic research group. “The American economy remains volatile on many fronts.”
How can a business plan writer help? Working with an unbiased business plan writing consultant, you’ll see where your strategy needs improvement or what you overlooked. A business plan acts as a viability analysis and can give you a better idea before launching if your idea is even feasible or if yours will be one of the 100,000 nonprofits that fail within two years.
Writing a business plan forces you to think critically about your strategy – how you’ll implement it, how it’ll align across all areas of the organization, and how you’ll measure the success of your strategy are all things that need to be taken into consideration when drafting your business plan. Writing a business plan, either on your own or with the help of a business plan writing company or consultant, makes you take into consideration things that you might not have thought of if you hadn’t written a business plan.
Like grant agencies, donors wanting to give a large donation may ask to see a business plan beforehand. They expect some social good to come from their donation and you being armed with a well thought-out business plan that demonstrates viability and strategic thinking can help seal the donation.
With so many charity scams appearing on the news and the IRS warning about possible scams, individuals and associations are understandably nervous when it comes to providing funding to lesser known nonprofit organizations. That’s why you need to break down your finances to a granular level in your business plan. By detailing how much money day-to-day operations require and how much money will go to the actual cause, you add credibility to your organization. Also include information on registering your nonprofit with the IRS. And most importantly, follow through! If you promise that 75% of donations will go to a specific cause, then do it. This will allow you to build a trustworthy track record year-over-year.