Business Planning
(For nonprofits, for-profits and hybrid organizations)
© Copyright Carter McNamara, MBA, PhD, Authenticity Consulting, LLC and Rolfe Larson, Rolfe Larson Associates.
What is a Business Plan?
Uses and Benefits of a Business Plan
A business plan is often prepared when:
- Starting a new organization, business venture, or product (service) or
- Expanding, acquiring or improving any of the above.
Several benefits are gained from preparing a business plan.
- First, this process often leads to early identification of important problems, which can lead to finding solutions prior to launch, or lead to the realization that the plan needs to be significantly revised or even scrapped.
- Secondly, getting the people who will be responsible for implementation to agree in advance on purpose, priorities and strategies BEFORE implementation, typically leads to better results.
- Finally, the business plan can serve as a roadmap to compare with results as the venture proceeds from paper to reality.
For these reasons, often the planning process itself is as valuable as the business plan document itself. Finally, a business plan is often an important document to present to investors, funders, lenders and Board of Directors to get their advice and support.
Types of Content in Business Plan
Business plans appear in many different formats, depending on the audience for the plan and complexity of the business. However, msot business plans address the following five topic areas in one form or another.
- Business summary -- Describes the organization, business venture or product (service), summarizing its purpose, management, operations, marketing and finances.
- Market opportunity -- Concisely describes what unmet need it will (or does) fill, presents evidence that this need is genuine, and that the benefiiciaries (or a third party) will pay for the costs to meet this need. Describes credible market research on target customers (including perceived benefits and willingness to pay), competitors and pricing.
- People -- Arguably the most important part of the plan, it describes who will be responsible for developing, marketing and operating this venture, and why their backgrounds and skills make them the right people to make this successful. Ideally, each person in the management team (and key program and technical folks) are indicated by NAME.
- Implementation -- This is the how-to section of the plan, where the action steps are clearly described, usually in four areas: start-up, marketing, operations and financial. Marketing builds on market research presented, e.g., in a Market Opportunity section of the plan, including your competitive niche (how you will be better than your competitors in ways that matter to your target customers). Financial plan includes, e.g., costs to launch, operate, market and finance the business, along with conservative estimates of revenue, typically for three years; a break-even analysis is often included in this section.
- Contingencies -- This section outlines the most likely things that could go wrong with implementing this plan, and how management is prepared to respond to those problems if they emerge.
In many cases, an organization will already have in its possession some of the information needed for preparing a business plan. For example, in the case of nonprofits, grant proposals often contain some of this information.
Sections of This Topic Include:
Preparation for Planning a Business Venture (nonprofit
or for-profit)
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)
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
For-Profit Business Planning
Basics
Business
Plan for Small Business
Business
Plan FAQ
Business
planning -- free, online course from SBA
10 Painless Steps to Starting
and Finishing Your Business Plan
5
Most Common Mistakes When Writing a Business Plan
Critical
Steps to Writing a Business Plan
The
One-Page Business Case
General Resources About For-Profit Business Planning
How
to Write a Business Plan (comprehensive overview and links)
Business
Plan Writing Center
Bplans.com: The Business Planning
Resource Center
Small
Business Administration resources
Entrepreneur's Help Page
Sample For-Profit Business Plans
outline
of a business plan
numerous
sample business plans
sample
business plans
Nonprofit Business Planning
Translate For-Profit Plans to Nonprofit Plans
For-profit and nonprofit business plans have many similarities. For that reason, nonprofit personnel would benefit from reading the links in the section below, "For-Profit Business Planning". Some of the terms are different, but in most cases they can readily be translated into words more commonly used in the nonprofit sector. For example, "blance sheet" is what nonprofit call a "statement of financial position", "profit and loss statement" (or income statement) is essentially the same as a "statement of fianncial activities", and so on
Basics
What
is a Business Plan and Why Do I Need One for My Nonprofit?
Nonprofit
Business Plan Tips
The following online business planning tool for earned-income focused ventures
can be helpful, Free sample plan (registration is rquired) is available. Or,
for a donation of $30 or more to the Truman Community Foundation, you can get
full access to business plan worksheets and reports.
Nonprofit Business
Solutions
Sample Nonprofit Business Plans
Nonprofit
Business Plan Sample
numerous
sample nonprofit business plans
Additional Resources for Nonprofit Business Planning
Also Learn About Nonprofit Earned-Income Ventures
Nonprofit earned-income ventures involve developing nonprofit business plans.
These activities are often described in the broader context of social entrepreneurship.
See
Social Enterprise
(Social Entrepreneurship)
Online, Free, Forum for Those Interested in Social Enterprise
Here is a free, online forum with 1,000s of participants, including experts,
practitioners, researchers, etc.
npEnterprise Forum
Numerous, Related Library Topics
The Free Management Library has numerous related topics.
Related
Library Topics
One Way to Make Sure Plans Actually Are Implemented
It's one thing to develop a plan. It's another to actually implement the plan. Far too many plans sit untouched on shelves. A low-cost, straightforward approach to share ongoing support and accountabilities to implement a plan is to use peer coaching groups. That approach is brought to you by Authenticity Consulting, LLC -- the same company that brings you this Free Management Library.
Using Peer Coaching Groups(sm) to Ensure Accountability and Actions
For the Category of Business Planning:
Related Library Topics
Recommended Books
For-Profit-Specific Business Planning
Nonprofit-Specific Business Planning
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.
Nonprofit-Specific Business Planning
Field
Guide to Nonprofit Program Design, Marketing and Evaluation
- by Carter McNamara, published by Authenticity Consulting, LLC. Nonprofit business planning often is focused on a specific program, rather than on the overall organization. (Planning focused on the overall organization is usually strategic planning.) There are few books, if any, that explain how to carefully plan, organize and develop a nonprofit program. Also, too many books completely separate the highly integrated activities of planning, marketing and evaluating programs. This book integrates all three into a comprehensive, straightforward approach that anyone can follow in order to provide high-quality programs with strong appeal to funders. Includes many online forms that can be downloaded.
Field
Guide to Nonprofit Strategic Planning and Facilitation
- by Carter McNamara, published by Authenticity Consulting, LLC. If you intend your nonprofit business planning to cover the entire organization, then you probably need strategic planning as much as, if not more than, business planning. This book provides step-by-step guidelines to customize and facilitate planners to implement the best strategic planning process to suit the particular nature and needs of their nonprofit. This is one of the few books, if any, that explains how to actually facilitate planning. Includes many online forms that can be downloaded and used by planners.
Also See
Planning and Project Management -- Recommended Books
Social Entrepreneurship (Nonprofit) -- Recommended Books
Strategic Planning -- Recommended Books
