Writing a business plan for your charity

Running a charity is a rewarding experience, but it's also something that requires a great deal of foresight and planning when it comes to ensuring that it functions successfully. Charities need a good business plan to ensure they meet their aims. For existing charities, a business plan is an opportunity to look forward in a structured way.

Why a business plan

It's important for you to consider the reasons why you're writing a business plan, and you need to know who is going to use it and who will be in charge of implementing your ideas. Charities use business plans to help with their strategy, and they are also used to improve management.

It's common for charities to create business plans they can use internally to manage their work in a more sustainable way. It's also worth pointing out that charities will often share their business plan with potential donors. Whether you're looking to improve your management, secure funding or are looking at your long term goals, a business plan is a vital document.

As a charity, it's unlikely you'll be writing a business plan to apply for loans, but it's a good way for you to get your key staff to understand your vision and goals as well as what your plans are for the charity. A business plan enables you to focus on what is important and how you will finance this in a sustainable way.

A business plan is a personal document and even after you've written it, you can adapt it so that it reflects your current circumstances. Business plans are considered as fluid documents that can always be amended.

Assessing your charity’s role

Existing or potential charities should undertake an analysis of their current or intended role - they ought to research what the specific focus of their work should be. As part of this process, they should often find out if the intended (or current) market is in need (still) of a charity like the one they're hoping to launch (or continue with).

Established charities would undoubtedly benefit from this process and it may allow you to consider if your charity is achieving your aims in the best possible way. It's important to consider what impact your current plans and activities have had.

When undertaking a role assessment, it's important to research other charities in the area which are targeting the specific market you are targeting. Doing this allows you to make sure the service you will offer is effective and you aren't doing something that is similar to other organisations.

When it comes to planning a new charity, it's important for you to get as much information as you can before launching so that you are confident what you're proposing will be a success. Businesses undertake market research during their plan and it's advised that charities do the same.

When writing a business plan for your charity, it's important for you to remember that your activities will evolve and the document is just the beginning. It needs to be used in your ongoing development.

What you should include

EXECUTIVE SUMMARY. An executive summary is the first section of your plan that people will read, and it acts as an overview of what is included in the plan itself. It should give a snapshot of your vision.

When writing an executive summary you need to think about the bigger picture and summarise key information by making it clear who you are, what you want to achieve and how you're planning on meeting your targets. Many people may only read this section of your business plan so you need to make sure that you include the most important information.

INFORMATION ABOUT YOUR CHARITY. This information should expand on some of the details given in the executive summary. It should include information about who you are and what you do. You should discuss what your vision is, where the idea for your charity came from, what shape it is in, the legal standing of your charity and what products and services you offer.

As part of your business plan you need to discuss some of the finer details of your charity. Think about how important your charity is. If the service you're providing helps to save lives, shapes the local community or has a global impact, you need to explain how your charity is doing these things.

Offer plenty of details when covering this section because you can write about what you’re currently doing as part of your work but also what you'd like to achieve in the future. It allows you to discuss what worked well in the past, and what your current successes are.

UNDERSTANDING YOUR MARKET. Being able to show that you understand the market is important and you need to make sure that you include information about any stakeholders involved, as well as customers and donors.

It's also important for you to analyse the market by undertaking relevant research. Market research is a part of the planning phase so it's important for you to outline what you've done so far that has informed your decision-making process.

In this section you should also include what your marketing strategy is and what your plans are going forward. Marketing is an important part of any charity as it allows you to reach your intended audience, and by implementing a strategy, you have a greater chance of success.

Undertaking a SWOT (strengths, weaknesses, opportunities and threats) analysis is also a good idea, as it will give you an understanding of where your charity sits in the current market. It allows you to show that you have considered your position, and there are opportunities for your charity to grow.

Adopting an operational perspective

PLANNING FOR DAY TO DAY OPERATIONS. Your business plan should outline how your charity functions. Consider including information about what resources you need to ensure your charity runs smoothly, as well as people and other organisations you may work with.

As with any charity, it's important for you to have dedicated premises that you use for your day-to-day operations and the necessary equipment to undertake the CORE function of your charity. As part of this section, you should also address any legal obligations you may have.

YOUR CHARITY’S KEY PEOPLE. Provide information about the key people for your charity and address any changes as part of your plan. You may wish to include biographies for management personnel, trustees and details of any planned changes to your staffing structure. You may outline any skills gap you have at present and what plans you have in place to address this.

YOUR CHARITY’S SOCIAL IMPACT. Your business plan should show what social impact you think your charity will have in the future. Social impact refers to the way you make a difference to the people and communities that your charity will serve. This section needs to be clear and you should describe what impact your charity is currently having on these communities.

You should include information about what social change you want to make in the future, how you're going to measure this and how you'll use the things that you learn to develop further.

SUMMARISE YOUR FINANCES. You need to include a summary of your finances, which should outline your costs and expenditure, what your main source of income is and any pricing strategy you use for products and services. You should also use this section to include forecasts as they play an important role in a business plan.

Risks you face

Consider what risks you have when it comes to the various aspects of your charity. You may include any relevant external, regulatory, financial and operational risks.

You should take time to explain what the likelihood of each risk is and how you plan to manage each risk, ensuring that you give details of how these risks may impact your charity.

Ultimately, a business plan is an important document for your charity because it allows you to make sure that your plans are clearly set out and that you have a strategy in place to achieve your goals. For both potential and existing charities, a business plan is a document for the future.