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Help Sheet

Business planning for community groups

A business plan for many groups presently active in the mental health area is unnecessary as most groups are unfunded and some want to stay this way for good reasons. However, others will want to expand and become more organised and it is at this point that business planning becomes integral.

A business plan is not a strategic plan, although it does make up one component of the strategic picture. The strategic planning process is for working out where you want to go - the goals you can reasonably expect to reach, the objectives that will allow you to know when you have met those goals, and the broad strategies that will allow you to achieve those objectives. A business plan, on the other hand, is about business, which is to say about money. Remember; money doesn't know you're a not-for-profit. It works by its own rules, not yours.

A business plan is a scale model of your enterprise. You model for your environment. Feed in the expected inputs, and see what figures come out the other end. A realistic simulation will prepare you for the actual production, will help convince your partners that you have done your homework, and will force you to clarify the assumptions you depend on to make it all work.

Terminology in the community sector is changing, from non-profit to not-for-profit. We're not working in order to generate a profit, but that doesn't mean we don't mind whether we have a profit or not. The new usage makes clear that fundraisers want to raise funds, and that they want to raise not only enough funds to cover project costs but enough extra to allow the organisation to grow and to provide an even better level of service to the community.

Why write a business plan?

Writing a business plan:


The organisation's Business Plan is prepared under the direction of the Treasurer by the Finance Committee (if you have one) with the assistance of the staff (if you have any). Business plans for particular projects may be prepared by the Project Co-ordinator.

Components of a business plan

Your business plan should include the following elements.

Mission statement/goals/objective

All the elements that aren't about money are carried over from your strategic plan. They don't change; what happens now is that you have to realistically assess how much the inspiration they have for you is worth to other people.

The situation report

It is here that you feed in the results of your surveys, your SWOT analysis, your judgements of the trends, your evaluation of the competition, and your-seat-of-the-pants analysis - the best information you have.

Facts are better than estimates, and estimates are better than guesses, but even guesses are better than not putting anything down. Guesses provide a starting point for later refinement, and a marker for what elements the budget is particularly sensitive to, and a reminder that decisions have to be taken no matter what.


Each plan attempts to express in concrete terms:

Project management software may be useful for this stage.

Marketing Plan

With those being your goals, and that being the environment you're operating in, how can you market your vision to the community? What image are you projecting, through what materials? What PR/media relations/advertising is going to be needed to feed your appeals? What target groups are you distinguishing? Are you going to employ direct mail, or e-marketing, or graffiti, or letterboxing to get the word out to the public?

Decide on the answers to these questions and set your objectives. Develop an action plan that will lead you to these ends, and develop performance indicators that will enable you to monitor the processes. Key performance areas here might include

Resources analysis (including human resources plan)

Your resources - in particular, given that you're going to be leaning heavily on volunteers, your human resources - are going to depend largely on how well you market your organisation, and how well you market your organisation is going to depend partly on how much volunteer labour you have to call on.

Your resources plan should cover both human resources (with a note of the systems and policies you have in place to support them) and material resources (buildings, equipment, transport). As above, the plan should result in measurable performance indicators.

Operational plan

The operational plan covers your delivery of products and services. What do you do? How do you do it? Again, the plan should result in performance indicators.

The budget (financial plan)

The heart of the business plan is the budget. Everything else in the plan is there either to feed assumptions into the budget or explain the conclusions that emerge from the budget. It won't come at the front of the document, but it has to come at the head of the process.

What you count in your budget will to some extent depend on the details of your business, but a fairly standard example might be -

Include the previous year's actual figures and next year's projected figures. Key assumptions should be flagged as footnotes and referred back to the situation analysis.

The budget is its own performance indicator.

Evaluation plan

While for-profit companies may look only at the bottom line of the financial report, not-for-profits need to be able to report both on financial soundness and on mission outcomes.

Evaluation needs to be built in to the structure of the operation - and needs to be carefully costed into the budget.


Your strategic plan should be for three or five years, with yearly reviews. Your business plan should be re-done each year, with six-monthly reviews, and should be re-done when you are contemplating significant new options or threats - either when applying for new grants or when facing salary hikes.

Finding help

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