Like for-profit businesses, nonprofit organizations use business plans to set goals, describe strategy, and secure funding. As your nonprofit matures and grows, so should your business plan.
Signs That It’s Time for an Update
Any time your nonprofit experiences these situations or opportunities, it’s a sign that you need to update your business plan:
- Changes in funding, including new trends donation trends, the end of a grant, a new endowment, or the potential for additional government support
- New nonprofit competitors in your area that might siphon your funding, volunteers, or community support
- Hiring a new director or a new chairman of the board
- New opportunities for funding, collaboration, or partnership
- The emergence of new operating models that could benefit your organization
- Changes to government policies that affect your nonprofit or the people you serve
How to Update a Nonprofit Business Plan
Once you decide to update your business plan, it’s important to involve the right people. You might sit down with the executive director and the staff members who are directly affected by the change; you can also invite one or more board members.
Start by reading through the plan and noting which sections might be affected by the situation that triggered the update. Then, it’s time to get into the details. Some changes are relatively easy if you brought in a small grant, for example, you can make small edits to the sections that cover business objectives, financial projections, and operating costs.
Other changes require a more intensive overhaul. If a new competitor is causing a dip in donations and volunteer participation, you might decide to adjust your marketing plan, change your donor relationship-building strategy, or shift funding to create perks for volunteers. You probably won’t make all of these updates in a single session, since you may need to get staff feedback, board input, and permission from funding sources.
When an internal situation leads to a need for an update, such as the hiring of a new executive director, you can take a more general, big-picture approach. Ask the new leader to review the document and note concerns and proposed changes. Then, sit down with the board and other leaders to discuss and ratify the changes. This step ensures that your leadership team is on board with the plan.
Finally, update the document with a revision date to let the staff and board members know that it’s up to date.
Scheduling Regular Updates
There’s no need to wait for a warning sign to update your business plan. In fact, scheduling regular updates can give you a competitive advantage they force you to take an objective, big-picture look at your organization, so it’s easier to spot opportunities and problems. Depending on your workload and staffing, you might plan a review once or twice a year.
For these scheduled reviews, it can be helpful to involve your lower-level staff. Ground-level workers often have different insights than directors and board members, so they can provide valuable ideas and point to opportunities that help your organization serve its audience. Send the plan to workers in advance, and hold a meeting to discuss potential changes. From there, you can bring the best suggestions to the board for approval. With the right combination of triggered and scheduled reviews, you can ensure that your nonprofit maintains a current, useful business plan.