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How to Get Started Launching A Nonprofit Business

Updated on July 28, 2016

The primary goal of opening a non-profit business is to reach out and serve the community, regardless if it’s a church, youth project, job training program or charity organization. If there is need there is an opportunity for investing in a non-profit business. The problems within any community range from orphanage, unemployment, drugs and alcohol, single parents homes, gangs and violence. The need for effective non-profit business designed to attack these negative issues is a must if communities across the nation are going to recover and grow toward excellence.

Necessary Prerequisites

In order to operate a non-profit business you will need a significant degree of business knowledge in management, operations, funding, recruiting etc. There are also several licenses you must acquire in order for your non-profit business to be legitimate and to avoid breaking governmental laws. If you believe in your cause and if you are passionate about making a difference in the lives of struggling people, then opening a non-profit business is for you.

You may have already zeroed on an issue in the community that you would like to resolve. If not, take a good look at the people in your community. What are their struggles? What are some of the issues they may be afraid of? Are there many idle youth in your community with absolutely nothing to do but hang around and get into trouble? This may be an opportunity to open an after school or summer youth program designed to help students discover their talents or to map out a vision for their lives while participating in building a strong community.

The Process of Launching a Non-Profit Business

Once you have found a need that you desire to fulfill, the next step is to write a business plan. The importance of such a plan cannot be overstated. A good business plan will lead you to consider such factors as mission, target group, recruitment, outreach, marketing, facilities, funding, partnership and many other necessities for a successful non-profit business.

Importance of Written Business Plan

A business plan consists of a summery, mission and objectives, products and services, market, management and staff, marketing strategy, development plans, schedule of operations, risks and problems, financial projections and requirements. A business plan provides direction, confidence, and opportunity for measurement and growth in reaching toward excellence.

Choice of location

Choosing a location for your non-profit business is the next step you need to consider. If you haven’t found one already, get advice from other sources as to how to select a good location. For example, if your service is to help the youth in your community, you want the facility to be nearby. You want it to be

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easily accessible, which means youth can get their by bus without traveling all across town. Also, you want the appearance of the facility to be attractive with a safe environment. In addition to being location-friendly, you want to be in compliance with zoning laws as well. This may take a little research but the investment in a good cause is worthwhile, regardless of what must be done to make things right.


Funding for Business

Funding your non-profit business require you to be familiar with federal and local grants, as well as venture capital and research grants to assist you in starting. Or if you don’t want to include government grants in the operation of your non-profit business, you must design a consistent marketing plan that will bring in donations from a variety of resources, including businesses, religious institutions, private citizens and other community organizations. You must be very aggressive in internet, television and radio marketing opportunities to keep the funding up.

Governmental Obligations

In order to avoid trouble with federal and local governments, you must complete several governmental requirements. First, you must determine if you are going to the sole proprietorship or if you are going into partnership with others. You have already determined that your business is a non-profit, not a (LLC) Limited Liability Company, corporation, S corporation.

Your next steps include registering your business name with the state government and getting incorporated by obtaining a Tax Identification Number. Tax ID numbers are obtained from the Internal Revenue Service and the state revenue agency. These steps should be followed by obtaining all necessary federal, state, local licenses and permits for your non-profit business.


The most effective way of launching a non-profit business is to get all business assistance and training necessary. Once you have the knowledge, training and assistance the process will not be as complex as it may appear. If fact, the more assistance you have, the more passion and excitement will be generated around your idea and cause. A launching celebration may even be a consideration. Such an event can be a great way to get to know those in the community you are inclined to serve.


Opening a business is a serious initiative. Before launching your business you must make sure you have covered all the requirements. Gain an in-depth knowledge in your area of interest. Study similar non-profits and their approach to operations. Master the fundamentals of state and local taxes as well as insurance requirements.


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