In light of the Great Recession, many small businesses are looking at switching legal structures and purposes from the for-profit sector to the nonprofit sector. Although nonprofits offer many benefits, specifically to the local community or the groups that they serve, these incorporations
still need to be run in the same way as their for-profit counterparts, according to Entrepreneur
magazine contributor Brad Sugars.
Before switching legal structures, a business owner must be sure that there is a demonstrated need for the incorporation
in the community, otherwise it could risk failure.
For example, if an entrepreneur is looking to launch a nonprofit that benefits local schools, but parent-teacher organizations are already meeting the needs the business plans on addressing, a company will likely get nowhere. To prevent such occurences, business owners must do their background research.
"You still need to see if your idea is a good fit in the marketplace, if there is a need for your idea, and you need to have a plan to generate donations, as well as a plan for delivering your service to your audience, or client," Sugars explains.
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