• Six Questions for a Better Business Plan

Business planning is an important element in any nonprofit’s toolbox. It can seem like a daunting undertaking, but it needn’t range so far and wide as to get out of hand. Answering six basic questions at the outset, and with as much specificity as possible, will help bring focus the entire process—saving you time and energy and ensuring a useful outcome.

Consider these six questions as a planning team, and document your concise answers to serve as a guide throughout your business planning process.

1. What is the focus of our business planning effort (e.g., a particular program, a new initiative undertaken either alone or with partners, or the enterprise as a whole)?

Business planning should only be undertaken because there is a specific question, or set of questions, that needs to be answered. Typically, it is used prospectively to inform the launch of a new program, structure a new initiative or partnership, or form a whole new organization. Your first task is to be crystal clear on what the focus is for your planning effort.

2. What is the strategic intent of the program, initiative, or enterprise that is the focus of the business planning effort?

Before an organization can productively engage in business planning, it must have identified a strategy. The process of business planning can test this strategy to see if it makes economic and operational sense. Articulating the strategic intent of the program, initiative, or enterprise is essential to ensuring that the business planning process is well-constructed to provide this value.

3. What questions do we need to answer—and what decisions do we need to make—in the course of this business planning process?

New ventures pose numerous questions, and it can be tempting to try to answer them all. A thoughtful business planning process is about finding answers to the most vital questions. Unfortunately, even the best process cannot provide certainty on every question—it will not predict the future. But by concentrating on the key questions and critical decisions that must be made, the process can deliver a well-considered map forward.

4. What information do we need in order to make these decisions?

Business planning is typically conducted for new ventures that will require a significant investment—when the cost of failure can be great. The planning process is an opportunity to exercise data-informed decision making about new efforts that bring an element of risk. But more information doesn’t always yield better decisions. Identifying the kinds of data that you need to make informed decisions will help keep you from going down a rabbit-hole of research that can hinder rather than aid decision making.

5. Who is the audience for this business plan, and how will they use it?

Are you developing an internal planning document, or do you need funders, partners, or other external stakeholders to see and understand the plan? Depending on the audience, your plan might emphasize more operational guidance, or marketing language, or include greater or lesser levels of detail. If you anticipate that the plan will need to serve multiple uses for different audiences, you might consider a modular approach where a detailed plan serves as a source document for more concise external-facing versions.

6. Who will approve the final decisions and document?

Finally, it is essential that you be 100% clear at the outset who is responsible for approving the plan when it is complete. Often, this will be your board. Your planning committee may include such decision-makers, which can help you anticipate and think through the kinds of concerns and information needs the decision-making body will have. You might also involve or update other decision makers at key points throughout the process, either individually or collectively, to help prepare the way for their final review.

Answering these six questions will give you a basic framework that will give your business planning process the focus and momentum to get you where you need to go.

[Adapted from The Nonprofit Business Plan: A Leader’s Guide to Creating a Successful Business Model]


Categories: Business Planning

Tags: business models, decision making, market awareness, planning, strategy

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