Non Profit vs Profit Business Plans

Non Profit vs Profit Business Plans

Non Profit vs Profit Business Plans - business plan for a nonprofit organization will look just like a for-profit organization's business plan with one difference: In a for profit business plan you need to emphasize revenue and profit growth, plus you have to show how your product meets a consumer need. Nonprofit business plans must focus on the needs your organization meets, such as general community, health and welfare. In both cases you need to make a persuasive argument why someone should contribute to the cause of the nonprofit corporation.

Nonprofit vs Profit

Both types of investors want to see a well managed operation. For profit investors look for low costs, which means more profit for the organization. Nonprofit investors, on the other hand, are actually investing in a cause, so they want to see as much money as possible go toward that cause, not toward overhead. Keep in mind that any plan you put together should build the case that you can operate well and actually do what you're claiming. But the similarities end there.

Profit Investors

For profit investors want to see a profitable business that offers a safe, high return on their money. You'll need to demonstrate there's a market for your product or service that's willing to pay for it out of their own pockets. If you're starting a motel, for example, investors want assurance that in your location, there's enough demand at the price you charge to make a good business. Furthermore, since for-profit investors want their money back, the business must either generate a lot of cash or be a good acquisition or IPO candidate. The emphasis is so much on profit that a for-profit company may end up changing its line of business in the course of its lifetime.

Nonprofit Investors

Nonprofit Investors are usually funded by foundations or people who want to see the organization provide a community service. They are concerned about what you will accomplish and how you'll get the results they want in the community. In a nonprofit plan, what you do is concentrate on the deed, rarely will you find nonprofits that change their mission once they're underway.

The cash raising process for a nonprofit differs from profit fund raising as well. Foundations and donors often have their own requirements for what goes into a nonprofit proposal, and you may find that with nonprofit status, you spend a lot of time figuring out how to satisfy each organization's requirements.

Your objectives in either plan are the same: to meet your funding source's needs by laying out a plan for an organization that will get the job done better than other organizations. In for-profit, it's the bottom line that counts, and your plan will be geared around that. In nonprofits, it's what you do that matters, so you should set a business plan to meet that need.

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