As they look for ways to become more self-sufficient and provide themselves with predictable revenue, increasing numbers of nonprofit organizations are engaging in social entrepreneurship.

The benefits of going this route take many forms. Making money through a nonprofit social enterprise can help fund the expansion of programs and services. That money is free from the restrictions of government agencies and foundations, which typically provide grants for narrowly defined purposes. And, with more money coming in, an organization’s leadership can focus less on fundraising and more on capacity building and the development of programs that meet the nonprofit’s mission.

Social entrepreneurship comes with its fair share of challenges, especially for organizations with little to no experience in the for-profit world. Below are several questions to consider before you move forward with a nonprofit social enterprise business plan:

1. What’s your current financial status?

Social entrepreneurship is not a feasible way to help a nonprofit out of immediate financial hardship. Rather, it’s a long-term strategy that may take several years to pay dividends. You may lose money on your venture for some time before turning a corner and becoming profitable.

2. Is your funding diverse enough?

There are few things scarier to a nonprofit than having one or two large funders responsible for the majority of its budget. If a funder does not come through on the next grant cycle, the impact could be devastating. A nonprofit social enterprise can diversify your funding and keep you from relying too heavily on any one revenue source.

3. How well are you raising funds now?

Are you having trouble bringing in funds from traditional sources? If so, social entrepreneurship could allow you to explore new methods of bringing more money through the door. If you are confident in your nonprofit’s ability to raise money through traditional means, you might be better off sticking with that.

4. What’s the status of your ‘funding well?’

As you look at your current and potential funders, is there a limit to the amount of money you could possibly raise? Many nonprofits find that they can raise a lot of money from a limited number of funders, but struggle to go beyond that. If your organization’s “funding well” appears to be drying up, social entrepreneurship could open up more opportunities.

5. Do you have strong leadership?

Launching a nonprofit social enterprise business plan is a big task—and not one that should be handled by an organization dealing with uncertainty in its leadership. Staff turnover should be relatively low and the board should have confidence in the executive director and other management personnel.

6. Does your nonprofit have an entrepreneurial spirit?

Some organizations like to take risks and explore new ideas, while others can be more traditional and conservative. If your nonprofit falls into the former category, it may be positioned well for social entrepreneurship opportunities.

While there are clear financial and capacity-building benefits to nonprofit social enterprise, it’s important for organizations and their boards to conduct a comprehensive assessment of their operations first. Without the leadership, staff and resources to make it happen, it can be difficult to support social entrepreneurship for the long term. Keep these questions top of mind as you discuss this issue with your board.