Business Plan Model > A Business Plan Model for Charities and Non-Profit Organisations
© Francis Miller 2002

Increasingly, charities and non-profit organisations are being required to produce business plans to map out their futures and to maximise their efficient use of resources.

The model presented here is a summary of the model I use in my work. Too often business plans are written and then forgotten about. Therefore I have made the development and implementation of an action plan into key parts of the process.

The key difference between business plans for the commercial and non-profit sectors is in the analysis of the external environment. While the external environment for businesses has a similar structure for all businesses with customers, current and potential competitors, suppliers etc, etc, the structure of the external environment for non-commercial organisations varies enormously depending on what the organisation does.

Therefore it is not possible to produce a simple model of the external environment that organisations can then apply to themselves. Therefore non-profit organisations need to do more analysis to map out their own external environment. This is covered further in Step 2 below.

Do not be deceived by the apparent simplicity of this model. Each of the steps can be made as complex as necessary to match the circumstances of individual organisations, both large and small.

The whole process is explained fully in Developing Your Internal Business Plan - 7 Steps to Success. The manual will show you in detail how to use this process. While it is written for businesses, it can also be used by non-commercial organisations. For more information, go to the Manual page.

7 Step Internal Business Plan Model

Step 1 - Develop Your Organisational Identity

Your organisational identity defines who you are as a organisation and what you do. There are three key components.

Vision - what you want your organisation to achieve in the future?

Mission - what does your organisation do and why does it exist?

Values - what is important about what you want to achieve and how you want to achieve it?

Step 2 - Analyse Your External Environment

The whole purpose of the external environment analysis is to understand better the 'space' in which you operate and the effect that changes in this 'space' are going to have on your organisation.

A non-profit organisation's external environment comprises all those individuals, organisations, companies, technologies and social and political trends that either you wish to impact or which will have an impact on you either in the present or the future.

Components of the external environment will include:

• end-users - people or groups that you are helping or trying to influence
  

• funders - individuals, organisations or businesses who will fund your work
  
• competitors - organisations or businesses who are either working with the same end-users or who are targetting the same sources of funds
  
• alliances - organisations who share similar aims and with whom you work or wish to work
  
• other stakeholders - organisations not in the above categories but who are important to your organisation. This might include a government department who is particularly concerned with your area of work or the media
  
• political, social, environmental, economic and technological trends - there will be trends that will have a direct impact on your organisation in the next year as well as over a longer time-scale.

Once you've understood how your external environment is changing, it's important to assess what implications there are for your organisation and how you need to react.

Step 3 - Analyse Your Internal Environment

Your internal analysis is concerned both with the past and the future. On the one hand, it looks at how the organisation has performed in the past and what its strengths and weaknesses are

On the other hand, the analysis takes the vision and begins to work out how exactly it is going to be achieved. Very important here is the identification of strategic objectives and then key success factors, which define what needs to happen in order to achieve your objectives.

Step 4 - Develop Your Action Plan

Your business plan is nothing without an action plan because, without it, little is going to get done. Your action plan will describe who needs to do what by when and what resources are needed?

Step 5 - Implement Your Business Plan

Implementation ensures, not just that everyone knows what they have to do, but also that they actually do it.

Step 6 - Assess Progress and Adjust Your Plans

The whole purpose of your internal business plan is to get results, which could be increased sales, profits, growth or whatever else your objectives are. The aim of Step 6 is to check that you're getting the results that you want or whether you need to adjust your plans.

Step 7 - Review Your Plan

Every six or twelve months, lots will have changed both internally and externally and your existing plan may have become out-of-date. You'll need to review it and probably start writing another one.

If you would like consultancy help on developing an internal business plan for your organisation, please contact me on 01306-882028 or email me at francismiller@miller-consulting.co.uk.

© Francis Miller 2001-2007