How To Plan A Profitable Non-Profit Company

It’s not everyday that someone wakes up and says, “I think I will start a non-profit organization.” Starting a business of any kind usually takes years of thought and planning before it can go from the concept on paper to the working model. It usually starts with a desire or a calling to provide a product or service. Then the next step would be to determine the best corporate structure for your business. There are a variety of ways to structure any business whether it is a partnership, a limited liability corporation or a sole proprietorship, but for our purposes we will focus on a simple US domestic corporate structure that is typical of small start up companies. These types of corporate structures will either be for-profit or non-profit in nature. A for-profit corporation is one that is designed to provide a product or service to the public in order to make a financial profit. Non-profit corporations, although they may make a profit on paper, their purpose is to provide a service or product that serves a human need or that is beneficial to a targeted group or cause. Often for-profit corporations create their own non-profits companies and foundations to handle things like education or the arts or even for ecological, social or employee benefit concerns. The profitability factor in a non-profit organization is determined by whether or not its product and services have performed their purpose. Profitability is also determined by whether or not the company was able to successfully meet the needs of the targeted population. Regardless of whether it is a for-profit or non-profit corporation, one must always start with a solid business plan. The following Non Profit Growth are some questions that should be addressed in the business plan.

  1. What is the name of your organization?
  2. What is the purpose or mission? What causes do you support?
  3. What differentiates your organization from others?
  4. Who is your target population?
  5. What service or end product would you provide for your target population?
  6. How will the services be rendered, and products produced?
  7. Do you have a marketing plan?
  8. How will the services and products be financed?
  9. Will you need a building, staff or vehicles?
  10. What are the initial start up projections in dollars and man-hours?
  11. How much of the financing will come from you, from private donations, from public donations?
  12. Do you anticipate needing government funding?
  13. What is the life cycle of your company? It is a temporary fund or a permanent endeavor?
  14. What kind of growth do you foresee (both in target population and in demand for your product or services)?
  15. Can this growth be quantified in your financial projections?
  16. What is your business or personal experience that qualifies you to start a business of this nature?

If you are thinking about also starting any type of business, you might want to research your local small business administration office or consult with an attorney about which corporate and tax structure is best for you. Also note that filing as a non-profit corporation in your state this does not automatically qualify you for a tax exempt status. Contact the IRS website for information about filing for a non-profit tax exempt status.

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