Not many people look at the prospect of writing a business plan and feel full of enthusiasm, and we often get told ‘we’re a small charity so we don’t need a business plan’. Actually, both are misleading. Business plans are living documents that hold your drive, ideas and exciting plans for an organisation that you’re passionate about, and every organisation should have a business plan – otherwise how do you know where you’re going?
Writing a business plan shouldn’t be a lonely process, the most effective business plans are the result of listening, problem solving and thinking innovatively in collaboration with your interested stakeholders, this could be through asking visitors what they want from their museum, what ideas the local community has or thinking about the challenges your organisation will be facing in the coming years.
A good business plan will:
What are you going to do with your business plan? Hopefully you’re not going to stick it in a drawer and forget about it. There are lots of different ways in which you could use your business plan, and how you choose to use it should steer how you choose to write it, for example, will the plan be used for funding applications or as part of a programme to attract major donors?
What are the absolute necessities to include in a business plan?
Title page and contents
This is exactly what it says. Title, name and address of organisation, contact details.
Despite being at the start of the business plan, this needs to be written last. Ideally no more than 2 pages maximum. Think about what key fundamentals you would want to tell someone about your business plan if you only had 5 minutes: your product, your market, your purpose, industry trends, the future of your business.
Keep it concise, make it professional, and let your enthusiasm shine through.
Who you are
Your mission statement, in less than 30 words capture why your organisation exists, who it serves, and how it serves them. Some examples of good mission statements:
TED ‘Spreading ideas’
OXFAM ‘To create lasting solutions to poverty, hunger and social injustice’
Also include in here your organisation’s goals and objectives, and values.
Give a detailed description of the organisation including charitable and company status, company history. Think about what your assets are in terms of skills and competencies, what have you got that gives you the edge and will support you in succeeding? What are your long-term plans for the organisation and what challenges are you likely to face.
What you do
Describe what you do and how, have you got any advantages, such as location or a unique collection? Do you charge an entrance fee? What is your ‘unique selling point’ that gives you an edge over other organisations?
Who your market is
You may feel confident describing who your market is anecdotally, but this can be deceptive, so it’s important to find out who your visitors really are. Knowing the demographics of your visitors, such as age, where they live, income, gender or occupation can tell you a lot about them. If you can identify what motivates them to visit you, see where they shop, what they like to spend their money on etc. then you can create ‘products’ that satisfy these, and make sure that your pricing and service match them. Not only will that improve the income of the museum and the service you provide your stakeholders, but you can demonstrate to funders that you are meeting your community’s needs.
You will also need to consider who/what your competition is. This is often where museums fall down. You are in competition not only with other museums and heritage attractions, but depending on your target market, also with family attractions, sporting events, the landscape and beaches.
Look at organisations that do well at attracting the sort of people you want to come to your museum, what are they doing differently to you.
Market research and evidence, market analysis
Even the smallest organisation can benefit from doing some market research. It doesn’t have to be a long or costly process. Market research will provide you with evidence for the assumptions you are making in your business plan and will reduce the element of risk in trying something new. There are basically 2 types of market research – primary and secondary.
Primary research is about creating your own data. This could be through questionnaires in the museum, meeting with community groups, focus groups. It’s about finding out what your existing customers like or want, as well as potential customers. Think about getting out and seeing the competition directly, a bit of secret shopping.
Secondary research is often called desktop research. This is about using published data, look at what industry publications are saying about trends in the museum sector, what information does the local council hold, tourism bodies, demographic profiles etc. Quite often local libraries are excellent places to find information.
How you are going to reach your market
Now you know who your target market is, how are you going to communicate with them and attract them to your museum? The most traditional route for small museums is leaflets. These can be effective, but it’s important to take the time to see how cost effective this is for your organisation. There is lots of information available online about which are the most effective forms of marketing for different target groups.
You must also consider budget when making these decisions. Options include:
Advertising – newspapers, magazines, online
Print – posters, leaflets, banners
Promotions and partnerships – prizes and discounts, partnering with businesses with window displays or branded giveaways
Direct mail and email
Explain the day to day operations of your organisation, this includes the people (staff and volunteers), processes, and your surrounding environment:
The resources you need to run.
Describe what you do – customer service, how you develop new projects, costs etc.
Your location – where are you, what type of location, do you own or rent your building, opening times.
Who do you work with e.g. partners and suppliers.
Any legal requirements that you need to meet e.g. health and safety.
How many staff and volunteers do you have, describe their skills and experience, how do you attract new team members, skills development, roles and responsibilities.
Include the biographies of your senior management team and trustees.
An overview of your management structure.
Consider any gaps you may have in skills and experience and how you plan to address these.
As mentioned before, it’s important to be clear about the social impact that your museum makes. This should include:
• The change you want to make.
• How you will measure the impact.
• How you’ll adapt to meet needs.
• How you’ll communicate your impact.
Provide a summary of your finances, this should include your costs and expenditures, a description of your main sources of income, and pricing strategies. You will also be expected to include financial forecasts here, these need to be realistic and based on sound evidence, key information will be your cash flow forecast and annual budget.
It’s important to demonstrate that you have carefully considered and assessed the risks across all the areas that could impact on your organisation. These include governance risks, financial risks, external risks, and financial risks.
Explain the likelihood of each and the impact it would have on your organisation, as well as how to mitigate against this impact.
SWOT and PESTLE
As part of the process of writing a business plan it is useful to undertake SWOT and PESTLE analysis. This is best done with a group of people where you can gain from a variety of opinions and experiences.