Developing a Strategic Business Plan
for Your Nonprofit Organization

Nonprofit organizations need to know at least two things: 1) what their community (their market) needs, and 2) what is required to be a successful organization. A Strategic Business Plan can help you in both of these areas.

What Will a Strategic Business Plan Do for Us?

  • Focus your thoughts, ideas, and dreams, transforming them into a documented plan of action.
  • Provide a way of communicating your goals to employees, volunteers, and donors.
  • Serve as a “road map” to show where you are going and how you plan to get there.
  • Enable you to measure your progress.
  • Facilitate fundraising, as the Plan describes what will be done with the funds.
  • Improve morale of employees and volunteers (especially if they’re allowed to participate in creating the plan), and make recruiting easier.
  • Attract new Board members, as it demonstrates that your organization practices strategic planning.

Reasons for Not Having a Strategic Business Plan

It’s not unusual for individuals and organizations to resist developing a Strategic Business Plan. Some of the reasons that you may have heard (or used?) for not doing so are:

  • We don’t have time to do strategic planning: we have to concentrate on day-to-day problems.
  • We are very successful without a plan.
  • The last plan we developed was never used, and therefore was a waste of time.
  • We don’t have anyone who can manage the development of a good strategic business plan.
  • We don’t need a plan to know what we have to do to accomplish our mission statement

Don’t accept these excuses! It’s important not only to have a Strategic Business Plan, but to have many members of your organization participate in creating it. Board members, managers, administrators, and key workers/volunteers should all participate. When everyone believes that he or she “owns” the plan, there is a better chance that its goals will be reached.

Involvement of the Board of Directors is particularly vital. The Board is usually responsible for writing the mission statement, managing the organization at the highest level, and carrying out fundraising activities. Even if the Board’s initial participation is slight, they should be heavily involved in the assessing the Strategic Business Plan, as they are ultimately responsible for achieving the goals and objectives of the organization, and assuring that adequate funding and other resources will be available to implement them.

Three Major Components of a Strategic Business Plan

VISION

This is the “dream” that the organization hopes to accomplish. In most instances, the vision is developed as an extension of the mission statement, and serves as the basis for your goals.

GOALS

Most organizations start by describing many goals, then reducing the list to those that can be accomplished in the coming year with the resources available.

OBJECTIVES

For each goal, list exactly what needs to be done in order for the goal to be achieved.

How to Develop Your Strategic Business Plan

Though each organization has to determine the best way to develop its own Strategic Business Plan, the process should always include these steps:

  1. Review the previous Strategic Business Plan (if there is one) to determine what goals need to be continued, why goals were not accomplished, and what has changed.
  2. Review the mission statement. Consider updating it if the community being served or the needs of the community being served have changed.
  3. Determine whether the funding available will allow the organization to meet current or expanded objectives, or dictate that efforts to be scaled back in coming years.
  4. Establish preliminary goals. This is one of the most important steps. It is critical to determine WHAT goals you have, and HOW MANY. Though optimism is admirable, over-optimism in establishing your goals can create great discouragement for those who have to achieve them.
  5.  Establish objectives for each of your goals. Each objective should describe:
    • specific tasks
    • a specific time frame for when each task has to be completed, and
    • who is responsible for each task.
  6. Submit the goals and objectives to all parities involved in achieving them, for their review and endorsement. If these individuals cannot or will not endorse them, the goals and objectives will have to be reworked until they’re acceptable.
  7. Prepare a financial plan and budget based on the agreed-upon goals and objectives.
  8. Submit the entire Strategic Business Plan to the Board of Directors for approval.

H59 - May 2002