Earned Income Business Planning

Earned income, or the sale of goods and services, is a somewhat misunderstood and unexplored financial opportunity for nonprofits. Yet there are countless examples of nonprofit organizations that sell goods or services to supplement their revenue. These include Goodwill, museum gift shops, hospitals, charter schools, theaters, and much more.

Earned income is not right for every nonprofit, but every nonprofit should at the very least analyze whether earned income is a potential opportunity. Earned income is not a panacea, it cannot transform a shaky financial model into a sustainable resource engine, it cannot provide fast cash. Earned income should be explored only when your organization is relatively stable and you are planning for the long-term. Earned income ventures could take years to reach profitability.

Social Velocity works with nonprofit organizations all along the earned income spectrum, from those nonprofits that are just starting to explore earned income as a possibility, to those nonprofits that have already piloted a product or service but need to put a full business plan behind it.

Social Velocity can work with a nonprofit organization at any point in the process of launching an earned income business:

1. Analyze organization assets
2. Determine which, if any, of those assets might have the potential to be turned into a product/service for profit
3. Conduct market research to understand the profit potential of the sale of that product/service
4. Balance the promise of profit with the mission of the organization
5. Refine products or services based on market research
6. Create a business plan

When a nonprofit is ready for a full business plan, Social Velocity leads them through that process. A final business plan includes:

• Market analysis (consumers, competitors, industry)
• Business model and how it operates
• Structure, roles and responsibilities of staffing for the business
• Pricing, promotion, packaging, and distribution of the products/services
• Financial plan
• Risks and ways to overcome those risks
• Day-to-day operational plan for the business

If you want to learn more about Social Velocity’s business planning process, you can read the Sustainable Food Center or Literacy Coalition case studies.

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