Is it more beneficial to start a profit or non-profit business ? What are the benefits ? and what are the challenges of either of them?


I agree with Mark in that it truly depends what you’re trying to accomplish.

Is this a business that you plan on keeping for yourself and/or family, or is there a different exit strategy in place such as selling the brand, an IPO, or being acquired by another company.

When it comes to business and deciding the corporate structure, there’s a few things I’d recommend considering.

1. Entity Type (there’s pros and cons to each type. Check with your CPA)
2. Revenue Model (yes, even NPO’s need this)
3. Business/Strategic Plan
4. Customers - What do they look like and how do you find/reach them
5. Exit strategy.

Let me know if there’s anything I can do to offer further clarity to you!

Answered 8 years ago

It depends on what you are trying to accomplish.

There are those who will tell you that you can make a lot of money by starting a non-profit and working for it as an employee.

This can definitely be true.

However, I think it is a little disingenuous.

The idea behind a non-profit is that you are trying to serve some altruistic purpose or higher good.

The idea behind a for profit business is to maximize the wealth of the shareholders.

Both are legitimate and both are positive.

Decide first what you are trying to accomplish, and then build your business around that.

Answered 8 years ago

To me this is a question that needs to be seen in context both have benefit and challenge but really the question is what are you trying to achieve. Dependent on this will depend on which path to take.

Answered 7 years ago

A few advantages and disadvantages of the non-profit organizations are as follows:
Disadvantage: Limited Funding
Fund development and fund-raising can be a non-profit organization's greatest challenge, particularly during an economic downturn and when unemployment rates are high. In fact, some non-profits are forced to discontinue services to populations in need when the non-profit itself lacks funding.

Advantage: Intrinsic Rewards
The services that non-profit organizations provide benefit communities and segments of the population that are often overlooked or underserved, such as homeless children. It is impossible to measure the tangible effects a non-profit organization can have on families, but the intangible benefits far outweigh the dollar value of their services. This is a distinct advantage for non-profits and the people associated with non-profit organizations. Potential backlash and social fracas plague some non-profit organizations whose missions are considered extreme, whether they are based on fundamentalist beliefs or progressive attitudes.

Disadvantage: Public Scrutiny
The financial statements of non-profit organizations are subject to public scrutiny. Many non-profits opt to periodically hire a third-party organization to audit the non-profit’s books and operations to ensure compliance with tax codes and industry best practices.
Besides if you do have any questions give me a call:

Answered 2 years ago

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