Nonprofit Business Planning

Key Go/No/Reconsider Program Planning Questions

I recently had the opportunity to pose the following questions to a work group focused on making a go/no go/reconsider program (aka business) planning decision.

Here are the questions:

1. How much interest and or investment is there by the board (consistency with mission)?

2. Is the revenue model sustainable?

3. Is there or how big of a demand is there by the target population?

4. Does the organization have, or could it have without significant investments, the capacity to do the program?

If the revenue model says that no money can be generated and/or a loss would occur and there is no demonstrated demand and, the board or governing body is not really enthused -- DON'T DO THIS!

Social Impact Bonds

thisThe nonprofit world is humming with this "new" idea for solving community challenges.  The idea has one core tenet: only pay for outcomes.  Check out this New York Times's blog post to understand more.  Note the one thing not said: I would want a serious understanding of market and market solutions and capacity to take this approach -- essentially, a strong business plan.

One example in the above linked post is One Service.  What's interesting about One Servcie isn’t what it does, but how it is financed — by the sale of bonds. The idea comes from various thinkers, social service experts and captains of industry in Britain who formed a group called Social Finance to build a social investment market there. It raised £5 million — about $8 million — from 17 investors in Britain and the United States,  The investors will get their money back only if One Service succeeds.   The bondholders are mostly charitable groups who would normally give money away; they were willing to be guinea pigs because of their desire to see this financial instrument succeed.

Nonprofit Success

Here's Ari Weinzweig's 12 "Natural Laws of Business" pulled from Zingermanns boo, Being a Better Leader and I believe translatable for nonprofit boards and staff.  I like the way these are presented and the content too!  By the way, these aren't new (think Drucker and Jim Collins and....) but they are succinct, folksy even, and send clear messages.

1. an aspiring, strategically sound vision leads to greatness

2. you need to give your customers some really compelling reasons to buy from you

3. without good finance, you fail

4. people do their best work when they're part of a really great organization

5. if you want a staff to give great service, give great service to staff

6. to get great performance you need to give clear expectations and training tools

7. succesful businesses do things others know they should do, but generally don't

8. to get to greatness you've got to keep getting better, all the time

9. success means you get better problems

10. strengths lead to weaknesses

11. it takes longer to make something great happen than you think

12. great organizations are appreciative and the people in them have more fun

 

Social Impact Exchange Business Plan Competition

The Social Impact Exchange has just completed the second day of its work and one of the activities I am most interested in is the Business Plan Competition. 

In this event, nonprofits, big and small, present their plans for scaling -- reaching tons more customers.  At this event, the finalists get to present and a winner is chose in two categories.

One of the finalists this year is The Hill Center.  It's purpose is to teach teachers how to teach reading.  This group is trying to raise $11 million over the next thre years to train and certify 636 teachers and support the academic success of 10,000.

Maybe this is one of those cycle of life things but there have been and remain some pretty powerful national organizations that teach teachers how to teach reading.  Formost among them and one of my clients in the organization's earliest stage of development is Reading Recovery - -a national program initiated I believe in Australia.

Now it's possible that there's market room for many.  And I have to admit I haven't read their business plan but following the presentations their is a Q&A session by the three judges and you know what: not one asked the competition question.

Great business planning and a great marketing strategy revolve around truly understanding market/demand which in turn demonstrates a true understanding of competition and the subsequent "so what".  That I didn't hear the judges ask the question only concerns me because this Competition is really a teaching opportunity.  We want every nonprofit to do business plans and get them right so they are successful.

Remember, competition matters in terms of who wants or needs a nonprofit's offering and who's going to pay for it.