Before you begin any development project, you need to be sure to have a well-thought-out business plan in place. This section is where you’ll find information on how to structure your business. It describes the components you’ll need to succeed at creating a particular housing product, and how to assemble those components with your partners.

When you are finished, move on to Step 2: Select Your Business Line

Market

The market for purchase of existing homes that can be acquired, rehabilitated and sold at limited market prices will constrain the size of the program. Successful acquisition/rehab/sale programs produce 10 - 20 houses each year. Few nonprofits ever develop more than that.

Read Overview Document (PDF, 32KB)

Capital

An amount of capital adequate for the complete development of each house must be available. Typically, an organization will obtain working capital financing, secured by the properties, to finance its pipeline of houses. Home purchasers will obtain their own first mortgages, often supplemented by below-market second mortgages funded by public agencies.

Read Overview Document (PDF, 28KB)

Risk

The central risk in an acquisition/rehab/sale program is that a house will cost more to develop than it can be sold for. Little net margin - if any - will be made on the houses. Because nonprofits work in lower-income markets, there is usually only the potential of earning a few thousand dollars on any house, but also the potential for losing a large amount on each house.

Read Overview Document (PDF, 14KB)

Acquisition (PDF, 14KB)
Financial Management (PDF, 28KB)
Team Selection (PDF, 24KB)
Design and Specifications (PDF, 23 KB)
Performance Guarantees (PDF, 14KB)
Production Management (PDF, 23KB)
Change Orders (PDF, 23KB)
Operations and Maintenance (PDF, 22KB)

Organizational Development

Board Basics:
The following narratives are excerpts from a manual produced by the Management and Organizational Development Department of the Enterprise Foundation. The excerpts from Board Basics have been divided into four sections.

1. Introduction, the Reasons the Organization Exists, and Board Responsibilities,(PDF, 39KB) provide a primer on what you can expect as and from a board member.
2. Typically three or four people - the officers - often share the leadership and management of the board. Board Officers and Board Structure (PDF, 34KB) will help you talk about the titles and job descriptions for the officers of your board.
3. Financial Oversight and Legal Risk (PDF, 30KB) discuss a board’s legally responsibility for financial management practices and legal risk for board members.
4. The Stages of Development: Why Your Board is Different (PDF, 47KB) explains the way your board fulfills its duty of care will differ from the way other boards do and will change over time. Because, like people, boards go through different stages of development.

Business Planning Manual: (DOC, 318KB)
A business plan is a detailed description of how an organization intends to produce, market and sell a product or service. Whether the business in housing, commercial or some other enterprise, a solid business plan describes how this new venture will operate successfully. This manual is designed to help the staff and boards of nonprofit community development organizations create effective business plans. It includes information on how to prepare the components of a business plan, including the Executive Summary, Company & Product Description, Market Description, Operations, Management & Ownership Structure, Financial Information, and Risks & Mitigation Strategies. Worksheets and examples are provided to assist the reader in preparing their own business plan.