As you may recall from studying for the SAT, verbal analogies infer a relationship between two sets of things, e.g., kernel is to corn as sentence is to essay. While not so fun on standardized tests, analogies are helpful in real life because they point to the similarities between two seemingly different things. As an increasing number of nonprofit organizations consider starting for-profit business ventures, or want increased sustainability for existing programs, more are being asked to write business plans that build the case for their ideas. While business plans may seem foreign and corporate, we’d like to suggest that business plans and grant proposals, which are very commonplace in the social sector, are not that different from each other.
In many ways, grant proposals and business plans share many similarities. Grant proposals outline a nonprofit organization’s case to funders on why their program and staff best meet the needs of their clients. Likewise, business plans suggest a product or service that fulfills customer needs and why market conditions and organizational capabilities make the plan viable and attractive. When nonprofit organizations embark on a business plan, here are a few other analogies to make the process seem less daunting:
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- Statement of Need : Grant Proposal ::
Research : Business Plan
In grant proposals, nonprofit organizations typically start with a statement of need that highlights challenges facing clients, the extent of barriers and the scope of the issue. Similarly, business plans cover the needs of customers in the market research section, which includes an analysis of the customer, industry (also called environment in the social sector), and competition. In this phase of business planning, ventures will illustrate the estimated need for their proposed product or service and show the industry and competitive conditions that will affect the success of the venture.
- Program Design : Grant Proposal ::
Strategy : Business Plan
In later sections of grant proposals, organizations provide an overview of the program’s design and demonstrate how the intervention meets the client’s needs and reduces barriers to their receipt of assistance. Similarly, business plans contain a venture description, goals and strategy that show how the proposed product or service will fulfill customer needs or desires.
- Qualifications : Grant Proposal ::
Organization & Management Overview : Business Plan
In addition to showing that your nonprofit organization is implementing a best practice or promising program in a grant proposal, you also have to demonstrate to funders that the organization and key staff are qualified to execute the proposed activities. Organizations typically highlight how long they have been serving their clients and the professional experience of their staff. Likewise, in a business plan, the organization should highlight the specific experiences, expertise, and previous successes of key staff to demonstrate competency to investors.
We are excited to see the growth in nonprofit organizations considering entrepreneurial ventures as well as more sustainable programming, and we urge you to jump into the business planning process with the confidence of years of grant writing experience in your pocket. With transferable skills, professionals in the sector are highly equipped for this challenge, and we want to thank TrendSpotter Rachelle Seger at the Foundation for a Healthy Kentucky for reminding us of that and inspiring this blog at a recent training session. If you have additional tips or thoughts about this piece, please send them our way!
To make it even easier, check out the latest version of our business planning template. We invite you to check in with us next week as we delve further into the differences (and similarities) between business and strategic planning.