Business Planning. A Business Plan is a management tool that sets short-term objectives and defines the steps necessary to achieve them. Although business planning is sometimes confused with strategic planning, a strategic plan is a leadership tool that sets the future direction for the entire organization. It has a broader focus and spells out the organization’s mission, vision, primary goals and strategies. The difference between business planning for for-profit businesses and nonprofit businesses is that nonprofits have a “double bottom line” – they have to pay attention to both making enough money to operate the organization effectively and efficiently AND to fulfilling their mission.

Nonprofit “business” includes mission-related programs, products, or services that are delivered at no charge or for a fee. A nonprofit can also deliver services or products for a fee that are UNRELATED to its mission. In this situation, the nonprofit should consult a lawyer to determine if there are certain tax consequences such as unrelated business income (UBIT), possible loss of tax exempt status, “commerciality doctrine” issues, and the like. 

Feasibility Study. Before an organization begins the business plan, a feasibility study should be completed to determine if the business concept is solid. Would it be possible? In the feasibility study the organization gets the answers to these questions:

·        Who is your target market?

·        Do they want:

The only way to answer those questions is to ask the people in your target market – through individual phone calls, through written or electronic surveys, through focus groups. It is not safe to make assumptions about the answers – it is very important to ask before beginning a new project or organization and then continue to ask on a regular basis.

It is also important to research the product or service’s field or industry:
• What are the trends – i.e. do more people need and are buying this product or service?; if it is government funded, what are the budget implications at this time? How will the trends affect the organization’s plan?
• Is the field or industry growing or declining?
• What characterizes success in other organizations providing the same service or product? What makes the competition successful or not?
• Are there laws or rules and regulations that affect the production, delivery, or other aspects of this product or service?