Resource Tool for Start-up and Small Businesses in New Mexico » Starting or Managing a Non-profit

Business Plans Aren’t Just for Start-Ups

financenm — Sun, 16 Dec 2007 06:00:45 +0000

J. Roy Miller, State Director, NMSBDC

Once you open your business, don’t think that you have finished with your business plan. Your business plan should be a dynamic working document, helping you stay afloat and remain focused on progress during your journey.

Business planning is a continuous cycle. Examining your position against the chart and making course corrections is part of the process. Sometimes you will find that you’ve strayed off course or are out of the bounds of your budget. In these instances you will need to take actions to bring things under control and to get back to your plan. At other times you may be forced to change it because your original concept just doesn’t square with reality, or because unforeseen market changes or product innovations make your assumptions invalid. In any case, an annual review and update of the plan will enhance your success.

As part of this review you will want to reconsider some of your major assumptions. Have any external influences changed? Consideration should be given to such things as competitors, current and potential customers, suppliers, technology, trends, demographic changes, government policies and regulations, and, of course, the economy.

Against this backdrop, think about your strengths and weaknesses. Are there new opportunities? What factors might threaten your business? Ask yourself what your competitors could do to drive your enterprise out of business.

Given this review, think about any changes you should make regarding your assumptions of market share, revenue growth, inflation, and expenses. If necessary, rework the calculations on your financial projections.

Take a close look at your performance objectives. Are they still relevant? Are there others that would be more appropriate? Are you achieving your objectives? Have you met key deadlines? Are your financial controls working? Identify any barriers that may inhibit or prevent you from reaching your goals.

Once you have completed this step, ask yourself a series of questions that start with “How do we …” Broad answers to these questions should provide you with strategies that you may consider for implementation. For example, “How do we increase sales to 500 units within six months?” This will result in a list of possible answers that may include things like initiate a telemarketing program, increase advertising visibility, and so on. You may end up with dozens of answers.

Select two or three answers that best utilize your strengths, and begin to look at steps or actions you need to take to put your strategies to work. Check your business plan to see if this will result in any changes to your operating, manufacturing, personnel, facilities, or marketing plans.

By understanding such a process, you should be able to monitor not only the performance of your business, but also those accountable – including yourself – for its success. Keep in mind that you will never be able to eliminate every problem in your business, but there will always be room for improvement and change.

By following your plan, you should be able to respond quickly to external factors – such as changes in the business environment – and internal factors that may include poor performance or a decrease in quality. You will be able to make improvements and cope with change. Most importantly, you will continue to reduce your risks and to find new opportunities.

Learn more about the Small Business Development Center.

Article 12

Download 12_Business Plans for On-Going Businesses PDF

Manage Your Non-Profit Like a For-Profit Business

financenm — Sun, 25 Nov 2007 06:00:47 +0000

In my position advising non-profits that seek funding from The Loan Fund, I’ve had experience with many non-profit organizations and I currently serve on the boards of two. Regardless of their mission, they all have the same challenges as for-profit businesses – they must address everything from selling to human resources.

Unfortunately, good intentions aren’t enough to build a sustainable organization, no matter how worthy the cause. When it comes to funding the organization, it doesn’t do much good to have financing if you don’t know how to use it.

Here are five critical elements and some tips to help get your non-profit started or back on track.

1. Get the right people – As with for-profit businesses, people are the single most important factor that determines success. After all, it’s people who implement plans. You’ve also got to have the right people in the right roles. A trail-blazer probably isn’t going to be happy with day-to-day operations, and a stellar fundraiser may be terrible at managing staff.

Tip: Write job descriptions and performance measurements before any recruitment. If you expect a board member to raise money, state that right up front. If you need your development director to also handle marketing, recruit accordingly.

2. Do A Workable Plan – Your plan doesn’t have to be long to be effective, but it does have to be written so it can be implemented. Both board and staff should be involved in planning – strategic or otherwise – to avoid confusion and duplicated effort. Many entrepreneurs never write a plan and a large number of them ultimately fail.

Tip: Keep it Simple! For example, seven major objectives are too many. Try for three, maybe even one. The simpler you keep it, the more likely you are to keep focused on your mission and achieve results.

3. Craft The Right Message – Before you do any marketing, ensure you’ve got the right message for the right audience. I often hear, “If they just understood, they’d make that donation!” Unfortunately, like any customer of a for-profit business, it’s not the job of the donor to understand. That’s why it’s critical to focus on one compelling message. Don’t try to tell everything you do, but do tell them why they should care.

Tip: Passion points – the elements that get people’s attention and compel them to act – can vary tremendously even within a single demographic. For example, a lot of companies advertise to women by painting their products pink or talking about “helping” women overcome their fear of finances (or investing or technology.) In fact, a lot of women hate the color pink and don’t believe they need help.

4. Qualify Opportunities – One of the keys to success in the for-profit world is determining if your prospect is qualified to buy. Doing so in a timely manner shortens the sales cycle and ensures quality customers. The same is true in the non-profit world. Don’t chase every dollar. Determine who will be most interested in your message and the best way to approach them. This applies to grant-writing as well.

Tip: Write target profiles for each of your stakeholder groups. Then, craft a sales strategy for each. How can you most effectively reach them? Advertising may not be the answer.

5. Measure Results – If you can’t measure it, don’t do it. Otherwise, how will you ever know if you’re doing the right things?

Tip: Build measurements into your processes from the beginning. This makes it much easier to do and ends the mad scramble for data when it comes time to report to your funders.

And, last but certainly not least, don’t be afraid to drop a plan that’s not working.

The Loan Fund, a partner in the Finance New Mexico initiative, provides financing and consulting to non-profits and for-profit businesses in New Mexico and the Navajo Nation. Find out more at www.loanfund.org.

George Kenefic, Director of Enterprise Empowerment, The Loan Fund

Article 9

Download 9_Funding Non-Profits PDF

Business Loans: When Traditional Banks Can’t Help

financenm — Thu, 18 Oct 2007 06:00:43 +0000

F. Leroy Pacheco, Executive Director, The Loan Fund

Nine years ago, while working as a housekeeper for a large Albuquerque hotel, Delia Gallegos dreamed of her own restaurant. Today she is the owner of two restaurants that provide a living wage to nine employees, and she has plans to open a third.

Delia is just one of many successful clients of The Loan Fund, a non-profit alternative lending agency that steps in when banks are unable to make a loan. The mission of The Loan Fund is to build New Mexico communities, and we pursue this mission one loan at a time.

The Loan Fund was founded in 1989 by the Council of Churches to help alleviate poverty in New Mexico. It was, and still is, a laudable goal and one in which we passionately believe. We don’t – as some believe – give away money. We look for people with good ideas who don’t qualify for traditional financing. In the past year alone we have made it possible for a wide range of ideas to come to fruition, including a dance school in Roswell, a flower shop in Tucumcari and a day-care center in Chaparral.

Because of their own regulations and requirements, banks often can’t loan money to an entrepreneur or small business, even when the banker would like to do so. Nobody likes looking a person in the eye and saying no to a dream. Banks and traditional financial institutions refer many clients to us for both loans and consulting support.

We know that it takes more than business growth to make a community healthy, and that’s why we don’t limit loans to for-profit businesses. The Loan Fund is the only alternative lender in the state that works with non-profits, assisting organizations in bringing services to cities, rural towns and the Navajo Nation. We have worked with groups like the New Mexico Teen Pregnancy Coalition, The London Frontier Theatre in Magdalena and the Tierra Madre Land Trust. In fact, our largest loan was for $700,000 to a non-profit organization.

While some form of collateral is required, we work with applicants to craft loan packages that balance social and fiscal responsibility. Because we aren’t a bank, we can be a lot more flexible with terms and conditions. Following our mandate to provide jobs and economic development in New Mexico, we don’t even use traditional titles; our lenders are known as Community Development Officers.

We also know that success takes more than money. Consulting services, provided by bi-lingual advisors in our Enterprise Empowerment division, help clients put their ideas to work in ways that promote success. Business theory gets translated into realistic plans that fit the goals, abilities and resources of our clients. As one of our client advisors says, “financing doesn’t do you much good if you don’t know how to use it.”

So how do you get a loan from The Loan Fund, or from any other lending agency or bank? First you need an idea. How to expand on that idea will be the subject of a future article.

Learn more about The Loan Fund.

Article 4A

Download 4A_Business Financing Questions PDF