Starting a Nonprofit: The Importance of Developing a Business Plan

Many nonprofits start out on a wing and a prayer but without a legit business plan. Just because an organization is labeled a “nonprofit,” that doesn’t exempt it from operating like a business—a nonprofit is a type of business, and many of the same rules that apply to a for-profit company also apply to a nonprofit organization. You need both a strategic plan and a business plan to ensure success.

Essentially, your business plan will be a combination of your marketing plan, strategic plan, operational/management plan and financial plan. Granted, your start-up’s business plan may be brief and general at first, but it’s good practice to include some basic elements, many of which you’d find in a for-profit’s plan.

Here’s where to start:

Executive Summary

This is your business plan in a nutshell—a high-level view of your organization. It includes your nonprofit’s mission, values, strengths and assets, plus a list of products, services or programs you offer. You may also want to include a few sentences about your marketing plan and how you plan to finance your organization over both the short- and long- term.

Now let’s get more specific:

Organizational Structure

Describe how your nonprofit is organized, from board to staff members. You probably don’t have enough staff for an organizational chart, but you could include one eventually. Also list your objectives, plans to scale (or grow) and a few of the trends in your specific area of interest/work.

What You Offer

List and describe any products you plan to distribute and what types of programs or services you will provide. You can also include copyrights, trademarks or patents that your organization is eventually awarded. If you have a vision for future programs or services, make mention of them here.

Marketing Plan

Who are you trying to reach and how will you reach them—that’s the gist of what to describe here. You can also explain the trends in your market, the need for your nonprofit’s services and which other organizations are possible competitors or potential partners.

Operational Plan

Think specifics and logistics here. How do you plan to deliver your services? Where will your office/facility be located? Do you have equipment or inventory to make note of? Basically, explain how you plan to operate and maintain your organization.

Financial Plan

You won’t have a lot to describe as a start-up, but this is where to explain your nonprofit’s current and projected financial status. At first, you may just want to list your sources of income and include your fundraising plan. Eventually, you can list grant awards, major contributions and in-kind support as well as your statement of financial position and financial projections.

Key People

Management staff, board members and significant financial sponsors—this is the “who’s who” section of your business plan. Detail their expertise and explain areas of responsibility. It’s also a good place to describe your vision for future staffing needs.


This section can be what you want it to be, but organizations will sometimes include staff resumes, relevant charts and graphs, promotional materials, their strategic plan and annual report. But again—as a start-up, you may not even need an appendix. Think of this as a section for key elements that don’t fit into one of the previous buckets.

This is a basic overview of what your business plan could include and it’s important to note that it doesn’t need to be set in stone—your plan can change and evolve according to purpose. While some things like your vision, values and structure will remain the same, your business plan may need to be revised when its time to fund a program, project or when seeking angel funders. Keep your audience in mind and adjust your plan as needed.


Randy Hawthorne

As the former Executive Director and Editor for Nonprofit Hub and a Professional Certified Marketer, Randy shares his passions of marketing and education with nonprofits to help them implement marketing and organizational leadership principles so they can grow their organizations. Randy lends his marketing and organizational leadership expertise to a number of nonprofits in his community. Outside the office, Randy works with high school and college students and mentors young professionals to develop their leadership and entrepreneurial skills.

April 16, 2015

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