learn<\/em>.<\/p>\n\n\n\nStarting a nonprofit with the lean startup method means that you\u2019ll experiment with various ideas and products you come up with. You\u2019ll get hands-on experience immediately when you use the lean startup method to start a nonprofit, though you start it using smaller increments than you would with the traditional startup method. This is preferable to the traditional startup method, which essentially dooms your business because you\u2019re forced to create a business plan for your nonprofit before you really even know what the nature of your business is. It\u2019s also important when you\u2019re using the lean startup method to use ideas that are the cheapest and easiest to produce. <\/p>\n\n\n\n
First, you build<\/em> your business. To complete this phase you must go out and ask local people about the problems they face with other nonprofits, find a problem that you can feasibly solve, and think up a solution to that problem that people will pay to receive. Is there a lack of nonprofits in your area? Do the nonprofits in your area lack inspiration when it comes to their fundraising efforts? Do people feel that the local nonprofits don\u2019t support a public charity they care about?<\/p>\n\n\n\nThe second phase is to measure<\/em>, or test. During this phase, you actually test the solution you developed during the build<\/em> phase. This phase should allow you to find out whether people actually like your solution and whether it can be successful for your nonprofit. Do people like the public charity or private foundation you\u2019ve chosen for your nonprofit to support? Do they like your fundraising ideas? Have you received donations or profit from your events?<\/p>\n\n\n\nThe last phase is to learn<\/em>. This phase is important because it allows you to obtain valuable feedback from customers about the services, products, charitable organization, or private foundation your nonprofit supports, and about the fundraising events you\u2019ve held. Do customers like the products you\u2019re selling? Do they have a favorable opinion of your nonprofit organization? How do they feel about other local nonprofits compared to yours? If you find that any of your marketing and funding efforts fail, or are unpopular, you can stop focusing time, energy, and money on them and focus on strategies that do work, which will ensure that your nonprofit corporation has a better shot at success. <\/p>\n\n\n\n<\/span>Why use the lean startup method?<\/span><\/h2>\n\n\n\nIf you knew that a product you were considering buying had an 80% probability of failing within a year of purchase, would you still buy it? That sounds outlandish, but that\u2019s the reality of starting a business using traditional methods because four in every five businesses started this way will fail during their first year of business. <\/p>\n\n\n\n
However, when you start a nonprofit using the lean startup method, you avoid this extreme risk of failure. It also allows you to explore methods to reduce startup costs and encourages you to create a customer base for your fledgling business before it\u2019s established. <\/p>\n\n\n\n
Starting a nonprofit with the traditional startup method involves taking significant financial risks on your part. Instead of completing thorough research and learning about the market for nonprofits in your area, you\u2019re expected to dive right in and hope that your nonprofit organization succeeds. But for business owners who use the lean startup method, testing their ideas for their nonprofit is a constant cycle that leads to better products and services based on customer feedback. When you start a nonprofit using the lean startup method, you\u2019re automatically equipped with advantages that business owners who use the traditional startup method don\u2019t benefit from. You\u2019ll create a community for your corporation which will evolve into a primed customer base for your nonprofit. <\/p>\n\n\n\n
The startup costs of your nonprofit will be minimal if you use the lean startup method, compared to the insane startup costs associated with the traditional startup method. The reason for this is that the traditional business method assumes you have loads of money to fund the startup process. With the lean startup method, however, you\u2019re able to learn about your industry gradually and effectively run your corporation without having to make any risky financial decisions. Your nonprofit will have a better chance of thriving and surviving through the first year and beyond.<\/p>\n\n\n\n
How do I know that your nonprofit corporation has a better chance of success with the lean startup method than it does with the traditional startup method? Well simply put, it\u2019s because I\u2019ve started five different businesses over the past eight years using the lean startup method. (I successfully sold three of the businesses and two are still in business today.) I\u2019ve also helped thousands of people start the businesses of their dreams using the lean startup method, and I can help you start your nonprofit corporation, as well! <\/p>\n\n\n\n
<\/span>How do you use the lean startup method to start your nonprofit?<\/span><\/h2>\n\n\n\nAny time I start a new business, I use the three main ideals of the lean startup method: build, measure<\/em>, and grow<\/em>. The lean startup method will not only provide you with a more cost-efficient way to start your nonprofit but will also give you the tools and foundations you need to run a successful corporation. This is preferable to the shaky business foundations that you get with the traditional startup method. <\/p>\n\n\n\n<\/span>Build<\/span><\/h2>\n\n\n\nDuring the build<\/em> phase of the startup process, you\u2019ll devise a plan and develop your nonprofit. This is done by talking to potential customers to identify common problems they face with other nonprofits in the area, build a community for your nonprofit, recognize a solution opportunity, and then develop a solution to the problem you wish to solve.<\/p>\n\n\n\nThis phase of the startup process is important because it ensures that the ideas you have about your nonprofit are good and that they meet the needs of people in your community. Building up a solid foundation for your nonprofit and supplying it with the tools needed for success is the goal of the build<\/em> phase. <\/p>\n\n\n\n<\/span>Step 1: Identify a problem<\/span><\/h3>\n\n\n\nThe first step you\u2019ll complete in this startup process is to identify a problem people have that you know you can solve.<\/p>\n\n\n\n
You can\u2019t just jump right into selling products and services and taking donations for your nonprofit and hope people will spend their hard-earned money on it because most people don\u2019t have enough money to make frivolous purchases from a new nonprofit. It\u2019s far more effective to present people with a persuasive reason to purchase it.<\/p>\n\n\n\n
The real trick is identifying that persuasive reason. <\/p>\n\n\n\n
You need to find what is known in the business world as a \u201cpain point.\u201d This is a problem that many people have that causes them all pain and discomfort and drives them to seek a solution. They can either come by this solution themselves or pay someone else to provide them with a solution. In this situation, you want your nonprofit corporation to be the solution. <\/p>\n\n\n\n
Unfortunately, starting a nonprofit is not as simple as doing the same thing that all the other nonprofits in your area are doing. First you need to identify a cause that people in your area want to support. Then, you need to identify a need that many people have that can involve your nonprofit. Do people in your area care about the environment, social issues, animal rights, or other causes that you can team up with a private foundation or charitable organization to solve? Are there too many nonprofits in your area and not enough creative ways to receive funding or donations? <\/p>\n\n\n\n
Really listen to the needs of people in your community because they are your potential customers, and you can use the information they give you to start your nonprofit and bring in donations. Are people more likely to provide donations for charities that involve children or animals? Would they participate in charity runs, walks, or other feats of physical fitness to raise donations for your cause? Do people in your area wish that the live music scene were more active, and would they go to a show where a percentage of ticket sales went to charities? Do you live in an area where a multicultural festival that provides a variety of food and music from around the world would be successful?<\/p>\n\n\n\n
After you\u2019ve talked to a few people, start asking about the common problems that are repeatedly discussed and find out how much that people are affected by them. Asking these questions and talking to potential customers and investors will provide you with knowledge about the industry, what people feel about other local nonprofits, what charitable organizations are popular in the area, the services that people in the area need, and more. During this process you can decide which of these problems you want to solve. <\/p>\n\n\n\n
<\/span>How do you choose which problem to focus on?<\/span><\/h4>\n\n\n\nThe lean startup method doesn\u2019t explicitly state how you should choose which problem to focus on. But I\u2019ll give you three recommendations that will make the process easier: <\/p>\n\n\n\n
- Choose a problem that many local people have in common. Are there a lot of nonprofits in your area that have lost people\u2019s trust? Is the mission statement of one of the most popular organizations in the area laughable? Do people complain that local charitable events are too expensive?<\/li>
- Make sure that the problem is a \u201cpain point.\u201d This problem causes many people distress, and the more distress it causes them the more ideal it is for you to choose it as the basis for your nonprofit. Are a lot of people looking for a nonprofit with a good reputation to contribute to? Do nonprofits in the area not allow people to donate time, service, or alternate support methods? <\/li>
- Choose a problem whose solution is within your grasp. If people want you to pull off a star-studded charitable event right off the bat, that\u2019s not feasible for your fledgling nonprofit. You could instead partner with other well-known organizations to organize an event and gain support for your nonprofit from local people. <\/li><\/ol>\n\n\n\n
Your main goal should be to find a problem that many people have in common, which causes a lot of difficulty or pain, that people desire a solution for so badly that they\u2019ll pay for it. <\/p>\n\n\n\n