Preparing for the Future Starts by Creating a Good Business Plan
David LaPiana, an expert in nonprofit strategy, and his team of co-authors recognize the problem many nonprofits encounter: the lack of a rigorous methodology that connects mission to strategy to sustainable execution.
Even more basic, many organizations (and not just nonprofits) operate without a clear definition of strategy,” which makes it difficult to create a business plan distinct from a strategic plan.
LaPiana helps by defining strategy as a coordinated set of actions aimed at creating and sustaining a competitive advantage in carrying out the mission” and a business plan as a tool that tests the proposition that a particular undertakingprogram, partnership, new venture, growth, or the entity as a wholeis economically and operationally viable.”
Business planning, he writes, is a process through which decision makers can understand and anticipate the consequences of financial decisions. And that's where its value lies ” by offering a way to think about the consequences of such decisions. The world will always evolve, and today's plan may soon become outdated, but a sound process for evaluating new conditions and opportunities should serve the nonprofit through waves of change.
A business plan has many uses, including helping a nonprofit:
In addition to laying out this important groundwork, The Nonprofit Business Plan offers guidance for developing a plan and uses a prototype table of contents as a road map for creating a solid document. Case studies and discussion of issues surrounding key elements of a business plan make the book a worthy guide. Many organizations will find the detailed attention given to developing financial projections helpful, as a business plan ultimately succeeds or fails on these projections.
While it would seem to go without saying, LaPiana appropriately emphasizes that the financial projections included in a business plan must be communicated well. Those who read the plan, including non-finance experts, must be able to clearly and fully comprehend what the plan describes and how the organization will achieve its goals. To that end, and consistent with the hands-on, practical approach of the book, the book offers dos and don'ts that any business plan writer will find helpful.
For those who have never written a nonprofit business plan, and who may not have even seen one, the book includes a sample plan in the appendix, which in itself provides valuable guidance.
How do you know if your plan is good? La Piana's answer: If those who read it, including board members, donors, political leaders, and interested funders, are reassured that the proposed program, venture, partnership, or growth strategy makes sense and has a high likelihood of success.
The Nonprofit Business Plan is available from Turner Publishing.
Reviewed by Peter Lowy