A BRIEF TUTORIAL ON BUSINESS PLANNING
FOR NONPROFIT ENTERPRISE
by Cynthia W. Massarsky
Compared to the private sector, nonprofits rarely do enough research and business
planning before beginning a new program. A structured process that culminates in the
presentation of a formal business plan can separate the successful from the unsuccessful.
This brief tutorial offers answers to frequently asked questions and a list of resources on
business planning for nonprofit enterprise.1
What is a business plan?
The main tool for business development is the business plan. A business plan is a formal,
written document that describes the business—what it does, how it does it, and why. It is
the distillation of research into a comprehensive, coherent, and concise document.
Emerging businesses need a written plan to force careful thinking, encourage discipline,
forge internal communication, and enhance coordination and clarity of purpose among
managers and investors. Business plans help us assess the amount of capital required by
a venture, and help to raise it. And, once a business is operating, the plan provides a
yardstick against which to define and measure progress.
The key issues addressed in a business plan include market demand, management, human
resources, operations, and capitalization. It describes the extent of the relationship
between the business venture and the mission of the parent organization. A nonprofit
organization writing a business plan for an affirmative business (businesses that provide
real jobs, competitive wages, career tracks and ownership opportunities to people who are
mentally, physically, economically or educationally disadvantaged) will look different
from one whose product or service is supplied by non-client personnel. A nonprofit
organization writing a business plan for growing an existing enterprise, as opposed to a
start-up venture, has the advantage of forecasts that are based on a financial and
operational history. Whether planning for a n