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Yet, we often read opinions in the popular business press that the business plan is no longer relevant.
All you need is a business model, we are told by business gurus.
What if the particular sources of income that exist today change in the future?
A business plan can help the nonprofit and its board be prepared for future risks, by answering questions such as, “What is the likelihood that the planned activities will continue as usual?
A business plan can also take into account assumptions that exist today but may change in the future: Are there certain factors that need to be in place in order for those income streams to continue flowing?
The plan should address both the everyday costs needed to operate the organization as an entity, as well as costs that are specific to the unique programs and activities of the nonprofit.A business plan can explain: what the income sources will be to support the charitable nonprofit's activities.What will be the types of revenue (sometimes referred to as "income streams") that the nonprofit will rely on to keep its engine running?If you are making widgets, you will need parts suppliers.If you are providing services, you will need partners that make the services more useful.or that our current sources of revenue will continue to provide this level of income? ” You can think of a business plan as a narrative - or story - explaining (ideally in a way that will make sense to someone not intimately familiar with the nonprofit's operations) how the nonprofit will thrive given its activities, its sources of revenue, its expenses, and the inevitable changes in its internal and external environments over time.According to Propel Nonprofits, business plan usually should have 4 components that identify: revenue sources/mix; operations costs; program costs; and capital structure.” “What other nonprofits are providing similar services?” and “What services does our nonprofit deliver that are unique?Business planning is a way of answering, “What problem(s) are we trying to solve? ” but also, “Who will get us there, by when, and how much money and other resources, will it take?” The business planning process takes into account the nonprofit’s mission and vision, the role of the board, and external environmental factors, such as the climate for fundraising.