The end of another year means that it is time to start planning for 2017. We find many organizations either don’t have a business plan, or else don’t update a plan that may be 2-3 years old. Organizations which have a sound business plan are more effective and financially sound than those that don’t have a plan at all, or an out of date plan.
What is a business plan? We frequently hear the term business plan and strategic plan used interchangeably. There is no uniform definition. For this article, we will use “business plan” to signify a one-year outline of goals and action steps for the organization. We will use the term strategic plan to mean a plan that covers 3-5 years and often covers a broader range of issues. If you want to do a strategic plan, we recommend that you do a plan for three years. We find that too much changes by the end of the fifth year to make a plan helpful.
A plan is a set of strategic goals with action steps to achieve each goal. You should have no more than 2 to 3 strategic goals. It is a roadmap for you to accomplish your mission.
How do you put a plan together? First, you will typically do a SWOT analysis. SWOT stands for strengths, weaknesses, opportunities and threats. Strengths and weaknesses, such as personnel or too much reliance on government funding, are usually matters over which you have some control. Opportunities and threats are matters in the environment around you over which you don’t have control but to which you need to respond.
You also need to outline the needs of your organization. Do you need volunteers? What about a funding source other than the state of Illinois?
After you have gathered information and done the analysis, you need to put together the goals and action steps that the Board, staff and other stakeholders have agreed on.
Remember, your plan is not etched in stone. You should feel free to change it if circumstances require.
How long should it take to develop a plan? We have heard stories about organizations taking 12-18 months to develop a plan. So much can change in that time that some of the plan may be outdated. We appreciate that nonprofits are often stretched thin, but we recommend that you try to do it in 3-6 months. There is even a way you can do a plan in 6 hours with cooperation from all stakeholders and some advance preparation.
Who should be involved in the process? Obviously, Board members and staff need to be involved in the process. In addition, we recommend that other stakeholders, including those whom you serve and other community leaders, have a say in the process and the final report.
How do you insure follow through with the recommendations? Unfortunately, it too often happens that an organization will go through the effort of formulating a plan, and then put it on a shelf where it gathers dust. You need a way to insure accountability in the organization. One way we recommend is to appoint a committee of 3 individuals in the organization to oversee the action steps. They can ask for reports at Board meetings, for example, on progress made toward the goals.
Why do some organizations not plan? If an organization is divided or its future is in doubt, the organization may need to focus on its short-term survival. Alternatives include a merger or dissolution and transfer of programs.
If you don’t have a business plan that outlines your goals for 2017, we recommend that you talk to your Board, staff and stakeholders about the need for one and the process. Your organization will be more effective with one and you will better serve your constituents. It is especially important for startups. Call us if you have questions or would like to discuss the process.
