Business Planning (for nonprofits or for-profits)

Written by Carter McNamara, MBA, PhD, Authenticity Consulting, LLC. Copyright 1997-2008.
Adapted from the Field Guide to Nonprofit Program Design, Marketing and Evaluation.

Preface

Business planning is often conducted when:

• Starting a new venture (organization, product or service)
• Expanding a current organization, product or service
• Buying a current organization, product or service
• Working to improve the management of a current organization, product or service

There are a wide variety of formats for a business plan. The particular format and amount of content included in a plan depends on the complexity of the organization, product or service and on the demands of those who will use the business plan to make a decision, eg, an investor, funder, management, Board of Directors, etc.

Overall, the contents of a business plan typically aim to:

1. Describe the venture (new or current organization, product or service), often including its primary features, advantages and benefits
2. What the organization wants to do with it (buy it, expand it, etc.)
3. Justification that the plans are credible (eg, results of research that indicate the need for what the organization wants to do)
4. Marketing plans, including research results about how the venture will be marketed (eg, who the customers will be, any specific groups (or targets) of customers, why they need the venture (benefits they seek from the venture), how they will use the venture, what they will be willing to pay, how the venture will be advertised and promoted, etc.)
5. Staffing plans, including what expertise will be needed to build (sometimes included in business plans) and provide the venture on an ongoing basis
6. Management plans, including how the expertise will be organized, coordinated and led
7. Financial plans, including costs to build the venture (sometimes included in business plans), costs to operate the venture, expected revenue, budgets for each of the first several years into the future, when the venture might break-even (begin making more money overall than it has cost), etc.
8. Appendices (there are a wide variety of materials included in appendices, eg, description of the overall organization, its other products and/or services, its current staff, etc.)

Nonprofit readers might notice that a business plan is very similar to a well designed grant proposal. In addition to the above items, a grant proposal might include itemization of any deficits (when expected expenses exceed expected revenues), which indicates the need for funding from the particular funder to which the grant proposal is being submitted. Also, a break-even analysis usually isn't included in a grant proposal.

Quite often, an organization's business planners already know much of what will go into a business plan (this is true for strategic planning, too). However, development of the business plan greatly helps to clarify the organization's plans and ensure that key leaders are all "on the same script". Far more important than the plan document, is the planning process itself.

Sections of This Topic Include:

Basic Introduction for Nonprofits and For-Profits (and how to convert between FP and NP)
For-Profit Business Planning (very similar to nonprofit business planning)
Nonprofit Business Planning (very similar to for-profit business planning)
Preparation for Planning a Business Venture (nonprofit or for-profit)

General Resources

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Basic Introduction (for for-profits and nonprofits)

Business planning is usually conducted when starting a new organization or a new major venture, for example, new product, service or program. Essentially, a business plan is a combination of a marketing plan, strategic plan, operational/management plan and a financial plan. Far more important than the plan document, is the planning process itself.

Business planning usually includes a thorough examination of the idea for a new product/service, if there's really a market for it, who the competitors are, how the idea is uniquely positioned to be competitive and noticeable, how the idea will be produced to a product/service, how much it will cost, how it will be promoted, what overall goals must be accomplished, how the development and ongoing operations will be managed and what resources are needed (including money). As noted above, a business plan is a combination of a marketing plan, financial plan, strategic plan and a operational/management plan. Here are a variety of perspectives.

Note to Nonprofits -- to Translate For-Profit Plans to Nonprofit Plans

For-profit and nonprofit business plans are very similar. (Nonprofits have "sales", "markets", "competitors", etc, too.) Therefore, nonprofit personnel would benefit from reading the links in the section "For-Profit Business Planning". When reading about for-profit business plans:
1. Substitute "balance sheet" for "statement of financial position"
2. Substitute "profit and loss statement" for "statement of financial activities".
3. Substitute "customer" for "client"
4. Substitute "investor" for "funder"
5. Substitute "product" for "program" or "services"

For-Profit Business Planning

Basics About Business Planning (including outlines of plans)

Be sure to also see "Comprehensive Overviews" below
Introduction to Business Plans
Business Plan FAQ
Business Plan FAQ
Business plan basics
Business plan basics business planning resources

Comprehensive Overviews

Be sure to also see "Basics ..." above
Business Plan Outline (FAQ's)
Writing An Effective Business Plan (comprehensive overview and links)
Business Planning (many, well-organized links to other business planning articles)
How to Write a Business Plan (comprehensive overview and links)

Sample For-Profit Business Plan

Sample business plan
outline of a business plan
several sample plans

Nonprofit Business Planning

Basics

(Nonprofits would also benefit from reading the above major section "For-Profit Business Plans". See Converting For-Profit Plans to Nonprofit Plans.)
Preparing Nonprofit Business Plan Nonprofit Business Solutions has some free information
has free info -- scroll down to bottom

Introduction and links to other resources
www.businessplan.org (for nonprofits)

Sample Nonprofit Business Plan
Another sample business plan
Another sample business plan

Preparation for Planning a Business Venture (nonprofit or for-profit)

Before you start a major venture, there are several considerations about yourself that you should address. This manual guides you through those considerations. Then the manual guides you through the major considerations you'll have to address when you complete your business plan. The manual includes numerous links to other free resources as the reader goes through each section of the manual.
Preparation for Planning a Business Venture

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General Resources

Business Plan, Business Planner &Business Planning Site
Bplans.com: The Business Planning Resource Center
Business Resource Center
SBA - Business Plan Outline - Updated September 1997
Data From Gopher
Entrepreneur's Help Page
GO Network: Business planning
5 Most Common Mistakes When Writing a Business Plan
Critical Steps to Writing a Business Plan

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For the Category of Business Planning:

Related Library Topics

Recommended Books

For-Profit-Specific Business Planning

Nonprofit-Specific Business Planning

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For-Profit-Specific Business Planning

The following books are recommended because of their highly practical nature and often because they include a wide range of information about this Library topic. To get more information about each book, just hover your cursor over the image of the book. A "bubble" of information will be displayed. You can click on the title of the book in that bubble to get more information, too.

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Nonprofit-Specific Business Planning

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Also See

Planning and Project Management -- Recommended Books

Social Entrepreneurship (Nonprofit) -- Recommended Books

Strategic Planning -- Recommended Books

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