Some of the most amazing entrepreneurs that I’ve ever supported have been folks that wanted to launch a nonprofit. They’re trying to do something philanthropic or socially conscious and they assume a nonprofit is the way to do that, so they come to me looking for help with their nonprofit business plan.

Once we sit down and have a discussion, what tends to happen is that they realize there are quite a few things they didn’t know at the outset. They found themselves wishing someone had told them these things BEFORE they started, before they established their entity.

Starting a nonprofit is far more complicated than it seems on the surface. Here are some tips on how to write a nonprofit business plan.The fact is, there are a lot of misconceptions about what it takes to start a nonprofit and how to make it successful.

Nonprofit businesses are often harder to launch and grow than a regular business. Most nonprofits are charitable businesses that are operating based on the goal of people helping people. However, running the business means you aren’t necessarily available to do the volunteer work most nonprofits require. The reality is that most nonprofits need at least some paid staff to make it operate successfully.

That’s why it’s important to talk about what every person hoping to start a nonprofit should know in the beginning stages and how they can get started on their nonprofit business plan.

Securing Grants

When it comes to getting the money you need, you may be thinking about donations or grant funding. You may figure you can do lots of things to attract income that’ll support the business. While yes, there are often different funding sources available, that doesn’t automatically mean those funds will go to your nonprofit.

Some of the most amazing nonprofits I’ve seen are no longer around today because they put way too much hope and faith into government grants. If you can secure a government grant, that’s only half of the battle — and it’s a battle that’s hard to win.

There’s a lot of competition to land grants and they’re often laden with numerous stringent expectations and rules. If you don’t do something perfectly on an application you’ll be immediately disqualified.

If you do manage to get past the application stage and get a grant, there’s a whole other phase that you’ll have to be ready for. There may be quarterly submissions tracking your financials and how you’re using that grant funding. The government requires accountability as there’s a specific purpose for the grant.

You’ll need to be prepared for the reality that grants aren’t  just “free money” which you can spend in whatever way your nonprofit needs to use it. Additionally, managing grants will often require staff to manage all of the steps and processes, so that’s something you’ll have to consider when writing your nonprofit business plan.

What to include in your business plan: Outline the specific grants and grant creation organizations you want to pursue, and the grant value for each one.

Soliciting Donations

Besides government grants, the other aspect that people often overlook is the fact that fundraising is really, really difficult. It’s not enough to say that you’re going to ask others to give you donations because that’s not something that happens easily.

If you have a history of doing some kind of fundraising (even in government) or doing campaigning or fundraising for schools or other nonprofit organizations, you know how challenging it can be to get people to give money. You’re asking people to donate their money willingly and generously — and will likely be doing it over and over and over again.

What to include in your business plan: How do you plan to solicit donations – door-to- door, online, paid ads, drives and events? Get specific and note how many people need to donate how much money for you to meet your needs.

Choosing an Entity

It’s important to keep in mind that nonprofit status isn’t for everybody. You can still run a charitable business and use a different entity type to lessen some of that burden for yourself.

For instance, an LLC is a limited liability company that’s a hybrid between a for-profit and nonprofit business that enables you to raise money as a charity. It also allows you to get money via a revenue stream as you’re selling a product or service.

Remember, you’re an entrepreneur, even if you run a nonprofit, and your goals, vision, and mission are what makes you a great business, not your entity type. You have options and while a nonprofit might be the most obvious choice, there are other alternatives you should explore before you make that decision.

It’s also important to know that your business plan will look very very different if you choose an LLC versus a C-corp versus a B-corp. You need to understand each option before you build your business plan so that everything matches your vision and moves you forward on a path that leads you towards success.

What to include in your business plan: After deciding on an entity, list how this entity is (or isn’t) required to report incomes, how it’s legally required to spend money, and whether it has special tax requirements you need to adhere to.

Now that you know what to consider, you can make a fully informed decision about whether or not choosing the nonprofit route is the best choice for your business idea. If it is, including the key details mentioned in this post will help you write a nonprofit business plan that’s ready to wow investors.

Ashley Cheeks

Author Ashley Cheeks

Ashley Cheeks is a Business Plan Consultant. Her core business plan writer expertise is in designing business plans for bank and investor funding. She founded Written Success after years of being a professional business plan writer as a freelance consultant, and working for companies including GE and Fluor. She lives in Houston with her husband, daughter and son.

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