NFP And Private Businesses
NFP does not = Not for Business.
All Businesses Count
We are fortunate to work across business sectors, and consequently have a wealth of knowledge and experience of the private and not for profit. Businesses are typically classified as private or not for profit (NFP), not for profits typically include many art organisations, charities, Community Interest Companies (CICs) and social enterprises.
Some of the main differences between private and NFP businesses is what their aims are and what they do with any profits made. NFPs profits are retained within the business and used primarily to help the NFP achieve its objectives.
Each business type has unique and distinctive characteristics, but they share many experiences, challenges and values. Private and NFPs work towards specific objectives, adopt common skills, attitudes and considerations.
There are many examples of NFPs adapting, modifying and using private sectors business and financial practices. However, there are lessons that the private sector can take form the NFP sector.
Three takeaways and lessons that the private sector can take from NFPs.
NFPs have a strong culture of planning, they constantly have to consider the future, with the landscape being more volatile and uncertain and having to do more with less. Many NFPs have a system of budgeting and planning, both short term and 3-5 year business and strategic plans.
Where the money goes and accounting for that, knowing what they’re spending on projects, on services, and then tightly controlling that.
Monitoring and use of KPIs:
NFPs monitor, use and report across a wide range of KPIS, covering efficiency, economy and effectiveness. Efficiency is seen as the relationship between inputs (resources used) and outputs, Economy looking at the cost of doing things and Effectiveness being the degree to which an objective or target is met.
NFPs believe in good work practices, effective management, and responsibility and commitment to client groups. They do not work in a vacuum.
If you would like us to help you improve your Private or NFP business, then please contact us. We can have a cup of (virtual or real) coffee, biscuit and a chat as to how we can help.
Pro Active Resolutions – Your Accounting Solution and Business Friend