What Non-Profits Can Teach Us About Turning a Profit

There's one major difference between running a small business and running a small non-profit. We're in it to turn a profit and they're not. But in many ways that's where it ends. And in many more ways, that concept is misleading.

Though a non-profit, by law, cannot make an actual "profit," you better believe they need to be smart about bringing in money, using it very wisely, and growing their capacity. And they do it all in a way that aligns with their mission - the thing that drives them. Non-profits, especially small ones, have to do more with less. Though many are feeling the crunch in this economy, they are adjusting and staying agile. Sounds a lot like a small business doesn't it?

If you think about it, we can learn a lot about running our small businesses from non-profits. Here are just a few tips to consider:

Have a Strong Mission

Non-profits are built around a mission, and everything they do ideally aligns with that mission. Their donors expect them to adhere to that mission. From a donor's perspective, "If I'm gonna give you my money, I expect you to do what you say you're gonna do or next time, my dollars go elsewhere." As small business owners, it's important that we have a mission that we stand by as well. Your mission doesn't have to appear all over your marketing materials, but it should exist somewhere, even if just as a note on your desk. Your mission doesn't have to be to save the world, but it should be driven by serving someone in some way. When everything you do is driven by that mission, you will be able to make decisions and move forward with clarity and purpose.

Treat Your Cash With Care

What would your business look like if your books were open for people to inspect for integrity? Non-profits have to operate with a level of transparency that we do not, but what can we learn from thinking that way? When a client pays you, she's supporting your cause. She believes in what you're doing and wants some of what you have to offer. Treat her money with the care and respect you would a donor. Sure, entrepreneurship is different - we benefit from taking big risks sometimes - but integrity with our money can stop us from fooling ourselves into thinking we're doing well when we're not.

Leverage Your Assets

Non-profits have to take a long hard look at what they're working with and do the best they can with it. What do you have going for you? Larger foundations have a trust to work with. Do you have money stashed away that you are afraid to touch? Would it make more sense for you to invest it wisely in your business so your assets can grow? Non-profits have boards of directors made up of smart and successful people. Do you have connections that you can use to create an informal advisory board for your small business? You would be surprised how willing people are to give back, so to speak, to help you grow your small business. What other assets can you leverage?

Rally People Around You

When a non-profit is in trouble, funding is down and budgets are cut, all stops are pulled. The staff and volunteers get creative in making appeals and holding smart fundraisers. How are they able to stay afloat when threatened? People rally around them. Non-profits thrive on creating a lively community of supporters. Create a community around what you do and you'll be able to tap into that community for support - business, referrals, new ideas, and much more.

Thriving non-profits contribute a great deal to our society, but so do small businesses. We have a lot to learn from one another. Sometimes it helps to think creatively about where you can gather inspiration as an entrepreneur.

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