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There is nothing like starting a business of your own. It's an empowering feeling to set your own targets and work towards your own goals, especially when those goals involve working towards the betterment of society. Maybe the inspiration to branch out on your own came from and after spending extended hours inside your cubicle in the big corporate office that you diligently served for quite some time. Now you feel like it’s time to finally “give back” to society for everything it’s done for you. It finally feels like the right time to invest in your own objectives rather than work towards another's. If your objectives are member-serving or community-serving, then you are looking to set up a not-for-profit business.
Non-profit organisations are those formed in order to pursue a common goal without the intention of distributing excess revenue (i.e. profit) to members or leaders of the organisation. They operate like any other company with the only significant difference being that their profits are used to work towards company objectives.
If you are looking to start your own non-profit business, here are a few tips to keep in mind:
1) Define your objective - There are, broadly, two primary types of non-profit organisations: member-serving and community-serving. Member-serving organisations look to benefit a particular group of people, like in the case of trade unions, sports clubs, mutual societies, co-operatives etc. Community-serving organisations are focused on providing services to the community in general, such as health services, medical research, education, aid and development programmes etc. They could be operating on a local level or at the global level. Your first objective, before putting any finances into the picture, should be to define your company objective. Are your objectives member-serving or community-serving? Once you get a clear idea on this, it’s half the battle won.
Also Read: What is Debt Service Coverage Ratio (DSCR) ?
2) Understand your market – When you have defined your objective, it’s time to do an extensive research of your market. Take a couple of weeks, maybe even months, to track the market and its ever-changing trends. Understand the market size to get a fair idea on what you are signing up for; nothing that a simple SWOT analysis (Strengths, Weakness, Opportunities, Threats) won’t solve. Though you will be working for social betterment, you still need to survive in the industry and nothing will help you better that having a complete understanding of your market.
3) Ask yourself questions – Before starting anything, especially a business, you need to ask yourself a few questions to clear any doubts in your head. Are you offering something of value in the present world/local scenario? Are you offering a unique service that isn’t being tapped into by someone else? If your services aren’t unique, are you giving seekers something more? Being a not-for-profit organisation, how have you mapped the company’s growth? Are you acquainted with the fact that not-for-profit organisations do not have owners and that the funds gained in the operation of the organisation will not be used to benefit any owners? These are a few basic questions in a list that contains many more. So, it’s best to clear your head before making the investment.
4) The big registration – To turn your big idea into a full-fledged running entity, you need to acquaint yourself with the necessary documents and procedures. Every country has its own set of rules and regulations to register a not-for-profit organisation. Make sure you have read and re-read the terms that apply to your country of operation.
Do not hesitate to take help from a professional, as they are the best people to guide you through the process almost hassle-free. It’ll only make your life easier if you have everything in place for the start.
5) It’s all about the money –And now coming to the most important aspect of any business, it’s financial planning. Starting a business means getting all your resources in place, and resources cost money. Be it the office space, your work force, equipments, services, additional expenses like bills, stationery, etc. the list goes on and on. You need others to assist you with governance, i.e. board members, employees and volunteers to assist you with operating your programs. You also need people, either insiders or hired professional service providers, who can help you with compliance issues and keep your non profit out of trouble with the state and federal governments. It is far better to recruit help earlier rather than later. Yes, funds will come from donations, grants, program fees, but that once you are a fully functioning organisation.
So how do you fund your business from the very beginning? You can avail business loans with quick approval and hassle-free procedures involving minimal paperwork. Worried about repaying your loan? There are a host of easy EMI options available. Now you don’t have to worry about disturbing your personal investments or taking multiple loans. To know more about Business Loans for your not-for-profit set up, speak to our relationship manager who would be happy to assist you.
Also Read: What is Business Finance?
Now that you are familiar with a few but important aspects of starting a not-for-profit business, check out our next blog that will show you how to run a not-for-profit business.
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