Business planning for not-for-profitsA business plan is not a strategic plan, though it does make up one component of the strategic picture. The strategic planning process is for working out where you want to go -- the goals you can reasonably expect to reach, the objectives that will allow you to know when you have met those goals, and the broad strategies that will allow you to achieve those objectives. A business plan, on the other hand, is about business, which is to say about money. Remember; money doesn't know you're a not-for-profit. It works by its own rules, not yours.
A business plan is a scale model of your enterprise. You model your environment, feed in the expected inputs, and see what figures come out the other end. A realistic simulation will prepare you for the actual production, will help convince your partners that you have done your homework, and will force you to clarify the assumptions you depend on to make it all work.
Terminology in this sector is changing, from non-profit to not-for-profit. We're not working in order to generate a profit, but that doesn't mean we don't mind whether we have a profit or not. The new usage makes clear that fundraisers want to raise funds, and that they want to raise not only enough funds to cover project costs but enough extra to allow the organisation to grow and to provide an even better level of service to the community.
Preparation of a Business PlanThe organisation's Business Plan is prepared under the direction of the Treasurer by the Finance Committee (if you have one) with the assistance of the staff. Business plans for particular projects may be prepared by the Project co-ordinator.
Components of a business planIn any case, your business plan should include the following elements.
Each plan attempts to express in concrete terms
* the outcomes that have to be achieved,
* the steps that will be needed to get there,
* the schedule for these to be done,
* the people who will need to do them, and
* what they will cost.
One element of the plan might look like this:
Project management software may be useful for this stage.
* your relations with the media,
* your success in gaining sponsorship,
* your success at fundraising from the general public,
* projected sales of goods and services, or
* product service delivery standards.
Resources analysis (including human resources plan)
Your resources - in particular, given that you're going to be leaning heavily on volunteers, your human resources - are going to depend largely on how well you market your organisation, and how well you market your organisation is going to depend partly on how much volunteer labour you have to call on.
Your resources plan should cover both human resources (with a note of the systems and policies you have in place to support them) and material resources (buildings, equipment, transport). As above, the plan should result in measurable performance indicators.
The operational plan covers your delivery of products and services. What do you do? How do you do it? Again, the plan should result in performance indicators.
The budget (financial plan)
The heart of the business plan is the budget. Everything else in the plan is there either to feed assumptions into the budget or explain the conclusions that emerge from the budget. It won't come at the front of the document, but it has to come at the head of the process.
What you count in your budget will to some extent depend on the details of your business, but a fairly standard example might be -
* Membership fees
* Special event income
* Sale of goods/services
* Interest Received
* Other Income
* Bank charges
* Advertising/ promotions
* Fundraising/event expenses
* Legal/ accounting fees
o Office equipment
* Utilities (power/light/water)
* Travel costs
* Subscriptions/affiliation fees
* Taxes/GST (if applicable)
* Repairs/ maintenance
* Casual labor
* Miscellaneous expenses/Sundries
Include previous year's actual figures and next year's projected figures. Key assumptions should be flagged as footnotes and referred back to the situation analysis.
The budget is its own performance indicator.
While for-profit companies may look only at the bottom line of the financial report, not-for-profits need to be able to report both on financial soundness and on mission outcomes. Evaluation needs to be built in to the structure of the operation - and needs to be carefully costed into the budget.
TemplatesSome cheap software available on-line provides templates for business plans - see, for example, http://www.planigent.com/html/template.html. (As always, ourcommunity cannot vouch for the quality of such third party material). They'll need considerable work to be adapted to the circumstances of your own case.
TimelinesYour strategic plan should be for three or five years, with yearly reviews. Your business plan should be redone each year, with six-monthly reviews, and should be redone when you are contemplating significant new options or threats - either when applying for new grants or when facing new salary hikes.