We all know that every for-profit entity, big or small, must have a business plan to track its bottom line and milestones.  In essence, a business plan is a road map that guides the organization’s growth, helping its board members and directors steer the organization’s efforts. Furthermore, it helps all stakeholders  understand how activities align with the vision of the organization. Nonetheless, drafting a business plan for a non-profit or non-governmental organization (NGO) is often overlooked or considered an oxymoron. I offer you 20 benefits of a business plan for Non-Profits:

1. It presents an overview of the audience to be served and the specific needs.

2. It establishes a methodology or metrics to be used to measure outcomes.

3. It records an inventory of resources at your disposal. This can be tangible or intangible assets. For example: facilities, equipment, expertise, good will, brand reputation, image, and others.

4. It documents the organization’s seed money, it’s purpose, and collateral, if any.

5. It provides guidelines on how it intends to raise funds, setting forth realistic revenue projections.

6. It establishes responsibilities and methods of accountability for management and key leadership roles.

7. It describes the experience and capabilities of its principals, partners, advisors, staff, membership, or other community stakeholders.

8. It provides a historical overview of its accomplishments.

9. It summarizes its marketing plan and strategy. Yes, even grassroots marketing strategies must be documented.

10. It details the market segment and demonstrates the needs of the community to be served.

11. It describes the market opportunity and answers why anyone should partner, sponsor, and support the organization.

12. It analyzes the environment, who or what are you up against? How is your offering different or better?

13. It specifies what is the offering (product or service), the value (cost) of the services offered, the methods you plan to use to reach your audience (advertising) and your unique proposition.

14. It creates a sales forecast: For example what activities you plan, how many people are expected, how much revenue will these generate.

15. It sets realistic assumptions: 3-yr revenue forecast with matching 3-yr resources forecast. A start-up should have a 5 year plan.

16. It creates financial statements: 5-year Operating Budget sales, variable & fixed expenses monthly over the first year, quarterly over years 2 and 3, & annually over years 4 and 5.

17. It lays out the financing requirements, especially important for grant applications or other type of public funding.

18. It details expected growth and how your organization will meet demands: Personnel, facilities, membership or clientele.

19. It details expenditures to execute marketing plan or strategy.

20. It establishes a plan of action with a timeline and progress reporting mechanism. Specific phases or the process, link tasks to specific resources, and sets parameters for accountability.

In summary, a Business Plan will establish goals, organizational systems, productivity mechanisms, and required operational funding. A business plan evolves along with the organization, this is true for any type of organization. A request for grants, seed money, or even partnerships, needs to include a business plan to convince outsiders and contributors that your organization is in it for the long run. No, it is not a paradox, a non-profit entity is serious business.

Reina Valenzuela, MBA, CEO of Starfish*Global LLC, is a management consultant servicing non-profit organizations as well as for-profit business enterprises.