I am currently a social worker who has noticed the increase in juvenile crime in my community. The biggest reason the teens I work with give me is that there is "NOTHING TO DO". I am interested in starting a teen center that would have all the teen essentials: video games, tutoring, basketball, activites, somewhere that teens can go "hang out" with supervision not security. I think using the center for Fri/Sat dances with a popular DJ. The trouble I am having is go profit or non-profit?? The thing that scares me the most is going non-profit- so much red tape and no security with the finaces. How do I decide? Profit or non-profit???
#1. "RE: Profit or non-profit" In response to Reply # 0
I commend you for finding a solution to the problem in your community. I have seen a business like you are describing make a huge impact on the lives of the children involved and the surrounding community.
As with all businesses, you need to develop a solid business plan. I would do some in-depth research on the internet to find others who have already developed a similar program in other parts of the country. There is no need to re-invent the wheel if you don't have to. You can learn from the mistakes they made and ask them your profit vs. non-proft question. This will also give you some people to share ideas with as your business grows.
#2. "RE: Profit or non-profit" In response to Reply # 1
I am in the process of doing extensive research. The one thing I have come across is many of the other teen centers with similar activities etc.. are through the Parks and Recreation department in that community. Out community parks and rec department do have a drop in center that is only two nights a week. Do you suggest that I still contact those centers and research there turnouts?
#4. "RE: Profit or non-profit" In response to Reply # 0
Unless you plan on receiving significant sums of money through donations or grants there isn't much of a reason to go with not for profit status. If you want to create a situation where you make your income and you provide "something to do" for the youth in your area then stick with an LLC or Sub S corp.
I suggest these entities rather than a sole proprietorship or partnership because some of your "clients" may create significant liability for you and you will need to shelter yourself from that. Those two entities are easy to create and manage, and give you adequate legal protection short of gross negligence on your part. Also you may want to make a living out of this business and its much easier to track draws by you and justify them in a for profit scenario. Plus, not everyone trusts NFP's anymore.
Depending on the state you are in there may be programs that will offer grants to NFP entities for doing what you are trying to do. There may also be some federal money in the form of grants that can come in if you are an NFP.
Additionally, people are more likely to donate to a NFP because of the tax deduction. However, for what you are doing you are just as likely to get funding from both private citizens and businesses.
"Things are difficult only while you don't understand them."
#5. "RE: Profit or non-profit" In response to Reply # 0
There is no guarantee on finances either way. The best way to ensure success regardless of business structure, profit or non-profit, is to have a solid plan in place. Feel free to check out this post I wrote about non-profits on my blog. This may give you some helpful resources.
#6. "RE: Profit or non-profit" In response to Reply # 0
Congratulations, and thank you, for your commitment to young people and in deciding to become a Social Worker. I have also worked in the youth development field for many years (started as a H.S. teacher). I'm not sure that your idea can be a viable for-profit business. After all your "competition" will be places like the Boys & Girls Club, locally funded community centers, etc, which are able to build facilities, and offer programming through grants and in-kind donations. Thus, offering free or low-cost services to your intended "customers."
There is a limited amount of funding for this type of non-profit work and if there is an already established center in your community you will have an uphill battle trying to get your's funded. If there isn't one in your community, have you considered reaching out to a large national organization for help in getting one started (Boys & Girls Club, United Way, Salvation Army)? They are really good at what they do and working with them may give you some key advantages that you won?t have by doing it alone.
Some other ideas: Use your education and experience to design programming (workshops, curricula, etc) that you could offer to established youth centers as a consultant (Money Management Skills for Youth, Life Skills for Youth, Coping With Violence, etc.)? This way your deep pocketed "competition" will instead be your partners and clients.
Start a for-profit Gym/Health Club just for teens instead of another youth center? There is a running article in Inc Magazine about a young woman who is doing just that in California. I think that it reaches your aim of providing "something to do" and allows for some of the activities that you mentioned (basketball, dance classes). The time is also right for it, as folks are becoming more aware of the health problems youth are facing.
Finally, whichever route you decide to pursue, nothing says that you can't do both. Sort of... These days Government/Private partnerships are all the rage. Your business would be helping your local government address key community concerns, by offering alternatives to violence and obesity. If well positioned, I don't think you will have a hard time getting noticed. I can envision a plan through which you offer discounted memberships to underprivileged youth. These being subsidized through government and foundation grants.
Again, thank you for your commitment and good luck.
#7. "RE: Profit or non-profit" In response to Reply # 0
>I am currently a social worker who has noticed the increase >in juvenile crime in my community. The biggest reason the >teens I work with give me is that there is "NOTHING TO >DO". I am interested in starting a teen center that would >have all the teen essentials: video games, tutoring, >basketball, activites, somewhere that teens can go "hang >out" with supervision not security. I think using the >center for Fri/Sat dances with a popular DJ. The trouble I am >having is go profit or non-profit?? The thing that scares me >the most is going non-profit- so much red tape and no security >with the finaces. How do I decide? Profit or non-profit???
There is a growing trend of non-profits adding a for-profit aspect to their organization and this is what I would recommend to you. Why don't you just have the best of both worlds?
I firmly agree with the others that you should start with a business plan. You haven't mentioned some things like the building/property that you are going to be using for the center - are you going to buy it or lease it or what? There's a big difference in the expenses for a leased structure than it is for a structure you own. You will have some overhead such as utilities and the like (and unfortunately I agree that you should have some liability insurance because of the kind of center it is you want to have) and of course you will need staff which will involve taxes and payroll.
As far as the "grant" aspect of it goes centers like the one you are proposing get grant money all the time simply because of the reason that they have the center in the first place and that is to help kids - so there are no lack of grant programs in that area.
As far as the "red tape" goes its all going to depend on how you look at it. That red tape is necessary for non-profit status and without the non-profit status you won't be able to receive donations that are tax deductible - plus the other benefits of being a non-profit. If the financial part of it scares you then the only solution is to put in place a plan to make sure that the financial aspect of it won't be so scary - one of the reasons I suggest you look into having a for-profit aspect to your center.
Of course what you are doing is highly commendable but keep in mind that that the better you plan this the less surprises that you will encounter. Just think of your business plan as a road map to where you want to go.