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Nonprofit Business Planning and Organization

Every business, whether for-profit or nonprofit, needs to manage its staff, set goals, market, deliver products and services, maintain budgets, and measure progress. The business rules are pretty much the same whether you’re providing meals to shut-ins or turning your mother’s cookie recipe into a million-dollar enterprise. Business fundamentals matter — no matter how lofty your mission.

Ditto for business planning. The same steps apply whether your venture is big or small, service or retail, for-profit or nonprofit. But to nonprofit organizations, certain steps require special attention.

Before launching a nonprofit organization, test your idea by asking these questions:

  • Is this idea something you really believe in? A driving passion isn’t the only qualification for success, but it sure helps. Having that passion helps balance the fact that most people who start, run, or work with nonprofit organizations earn less money than they would working in the private sector. What motivates them isn’t the money but doing something that they really care about.

  • Does the nonprofit fill a need? The process of planning is to make sure that your venture — for-profit or nonprofit — is likely to succeed. One indicator is whether it addresses a real market need. You probably don’t think of nonprofits as competing in the same way that for-profit companies do, but, in fact, they do.

    They often compete for scarce grant monies. They also need to check out what other similar nonprofits are doing to make sure that they aren’t duplicating efforts. They have to convince donors that their work is worthwhile, and they have to reach clients who can use their services.

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