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Success Guides

SuccessfulBusiness Planning By A Different View

Success Guides

Successful Business Planning

By A Different View –Rosalind Johnson, Sylvia Matiko, Murray Parfitt, Tamalie Newbery

Front cover picture: “A goal without a plan is just a wish” –the Watts Gallery in Surrey has achieved a dramatictransformation, with the aid of business planning. Watts Gallery

Who Will Be involved?

Everyone! You will need to get inputfrom every level of your organisation.

Involving everyone improves the plan by ensuring that a rounded and moreaccurate picture of your currentsituation is established, and ensuringbuy-in for your vision. Involving theviews of visitors, stakeholders andpartners will mean that the organisationretains an outward focus and won’tcreate a plan that is not relevant tothose who are most important to it.Involving everyone also helps to developunderstanding of and commitment tothe plan that is produced along the way.

Get Ready!

It will help to pull together as muchinformation and evidence as you canbefore you start. This might include:

1. Accounts

2. Memorandum and Articles orConstitution

3. Cash flow forecasts

4. Market research, visitor surveys etc

5. Previous reports or studies

6. Existing plans such as a Forward Plan

3 AIM Success Guides

Successful BusinessPlanning By A Different View

“A goal without a plan is just a wish.” ― Antoine de Saint-Exupéry

A business plan is a road map showing potential funders,trustees, stakeholders and most of all you, where you arestarting from now, where you aim to go and how andwhen you are going to get there. It will also show themyour plan for sustainability and how you will attract andgenerate the funds you need to pay for what’s necessary.

This guide will take you through the process of businessplanning in logical steps, show you what information you will need and who should be involved in formulatingthe plan.

You may already havea Forward Plan,Strategic Plan orCorporate Plan (anumber of differentterms are used). Thisguide flows on fromthose to describe howyou will achieve yourgoals in detail.

TIP Although everyone should beinvolved it is usually best to have asmall team to lead the process. Thisshould include representatives fromthe Trustees and the key people withresponsibility for the day-to-daymanagement of the museum (whetherthese are paid staff and/or volunteers).A group of four or five is ideal.

TIP Skill-set – check whether yourorganisation has people in it who areaccountants or planners who havegone through the business planningprocess before. You might also findhelp from partner organisations whowould be happy to act as a mentoror critical friend.

How Long Should It Take?

It depends on how detailed the planneeds to be and how complicated yourorganisation is.

Typically, six to eight weeks would be anormal timeframe. Set a timeline withroles and responsibilities and setdeadlines for each part of the work soyou keep things moving.

Do We Need An Away Day?

It’s not essential to have an Away Day,but it may well be a good idea at thestart of the business planning processor when the team has hit a wall. A well-planned Away Day can be agood way to encourage fresh thinkingand re-energise your team.

So What Needs To Go In ABusiness Plan?

Although there are no hard and fastrules, and what goes in will depend on

the purpose of the plan (e.g. for aHeritage Lottery Fund (HLF) applicationor for Accreditation purposes), abusiness plan will normally include:

• Executive summary • Introduction to the organisation,

overall vision and values• Strategic aims and objectives• External and internal analysis –

critical factors and trends (SWOT andPESTLE)

• The market – all about people whoengage with you

• Financial analysis• Monitoring and adapting

How Do We Do It?

The framework above can be used tocreate the plan. Writing it all up usually happens at the end when all the thinking has been done and the decisions have been made. The rest of this guide explains how to tackle each of the sections within the plan.

Management Successful Business Planning 4

Visitor surveys provide essentialbackground information to enablebusiness planning to take place. Thisis at ss Great Britain, Bristol.ssGreat Britain

TIP Remember to allow for thinkingtime and for redrafting.

Executive Summary

Although this goes at the beginning, itshould be written at the end of theprocess. It is one of the most importantparts of the plan. It summarises whatyou are going to do, why and when,concisely on one or two sides of A4. Itshould help make it easy for you tocommunicate the main points of yourplan to staff, volunteers, partners andfunders and to remind yourselves whatyou are doing and why. If well written,it can become a useful summarydocument in its own right.

Introduction to theOrganisation, Overall Vision and Values

You may already have these thingsestablished before you begin yourbusiness planning process, but if youdon’t, you can’t go any further untilthey are agreed. Every aspect of yourorganisation, everything you do andhow you do it, ties to these key points.

The organisation – summarise brieflywhat your organisation/museum is

about, its key characteristics includingsize, major assets, staffing model etc.

Charitable/core purpose – summariseyour charitable purposes and elaborateon these, if necessary, to explain yourcore purpose (why you need to exist).

Vision – this is a high level, motivating,people-focused ‘dream’ for where youwant your museum to be, or what youwant it to achieve, in the long term.The vision is likely to have a longerlifespan than the business plan you arecreating. It should be distinctive sotaking the time to find exactly the rightwords is important. The vision doesn’ttell you how you are going to achievethe dream, just what it is. Generally,the shorter the better.

Values – these show what is importantto you in how you do things. Theyshould permeate the decisions youmake at every stage of your planningand in the way your organisationoperates. So for instance, if you saythat being ethical is one of your values,then this should be central to how youtreat staff and suppliers, as well as incollections policies.


Every aspect of yourorganisation,everything you do and how you do it, tiesto your vision andvalues.

Arundel Museum, West Sussex, has recently re-opened in a newpurpose-built home: businessplanning was an essential part of the project Arundel Museum

Strategic Aims and Objectives

The strategic aims will set out, in broadterms, what you want to do.

Once you have agreed these aims, therest of the plan is about how to achievethem. So what are good strategic aims?

• They tie back to your purpose, visionand values

• They are specific to your organisation• They are about doing something new

or something differently for yourorganisation – they don’t describebusiness as usual

• Collectively they highlight the keyareas you are going to work at toprogress towards your vision

• They describe what you will haveachieved in each of those areasduring the life of the business plan,but they still don’t tell you how youare going to do it.

Some organisations link a strategic aimto each department or area of activityin their museum. This kind ofcompartmentalised thinking and actingis not necessarily helpful as much ofwhat needs to be done requireseveryone involved in the museum towork collectively towards achievinggoals.

Around four or five strategic aims isprobably about right – perhaps onlythree for a two-year plan or a smallorganisation. You might find it difficultto prioritise to this extent but you’ll seeas you write more detailed objectivesthat too many aims will make your planunrealistic from a resource perspective.

Once you have a set of aims you needto start developing detailed objectives.These objectives will be informed bythe rest of the analysis so it’s best tocome back to them when you havecompleted most of the plan.Remember, this is an iterative process.

So, what is the difference between anaim and objective? Aims are what youwant your organisation to do.Objectives are the specific steps oractions you need to complete in orderto achieve those aims.

Current and Future Internal andExternal Analysis

The purpose of this part is to show thatyou have considered the key factors,internal to your organisation andexternally in your environment, whichwill affect how successful you will be inachieving your goals.

You are looking for both the positiveand the negative – often articulated ina SWOT analysis – looking internally atyour Strengths and Weaknesses andexternally at the Opportunities andThreats. Consider the lessons you canlearn from your experience butremember to look towards the futureas well as into the past.

It can seem daunting trying to ‘predictthe future’ but it is not necessarily thathard to see what is coming up whichmight affect your museum. A PESTLEanalysis is sometimes used to helpfocus on the different types ofOpportunities and Threats (Political,Economic, Social, Technological, Legaland Environmental). You can use yourown knowledge and experience butalso be aware of what otherorganisations are thinking about.Consider what is important, in yourlocal area and to other similarmuseums. Try and assess what the bigmuseums are thinking about andpreparing for. They may be earlyadopters of new ways of doing things,which will become relevant to youduring the course of your plan.Consider national government policy,local government policy, as well aspolicy changes for major funders.

Comparator and competitor analysis isvery important. This should be lookedat from your visitors’ point of view.Who do they compare you with?Where else might they be going if theydon’t come to you? This might need toinclude a range of local organisationsand other visitor attractions, not justmuseums, because visitors don’t onlyvisit museums – even the really keenones. Don’t forget to think aboutcompetitors to your retail and catering


EXAMPLE – AIMAND OBJECTIVE

Here we have an exampleaim and then anassociated objective thatshows how you will meetthat aim. You are likely tohave several objectives foreach aim but that is verymuch up to you and yourcircumstances.

AIM: To meet the existing,changing and growingneeds of our visitors

OBJECTIVE: Train our 70volunteers in visitormanagement andcustomer service over thenext 12 months

TIP: Make any objectives SMARTones, that is:

S SpecificM MeasurableA AchievableR RealisticT Time-scaled

and compare offerings and priceslocally.

You can research some of these areasthrough the AIM Bulletin, conferences,the news and through your networkswith other museums andorganisations. Don’t forget to includeTrustees here whose expertise outsideyour own sector can be very beneficialin ensuring you think widely enough.

In terms of internal analysis, it can bevery helpful to benchmark your keyindicators or performance againstother similar organisations.

Consultation and Analysis of theViews of Visitors, Stakeholdersand Key Partners

As well as the external environment youalso need to think about what mattersto those people who you are servingand those who fund and support you.Your plans for the future will need tocontinue to meet their needs.

You can commission research orundertake your own research and ifyour business plan is going to introduce

big changes, or includes large one-offitems of expenditure, it may be veryimportant to do this, to ensure yournew initiative is well-grounded in anunderstanding of your customers.

The Market

In this part of your plan you need todescribe visitors or audiences who willengage with your organisation. Youneed to be specific and give detailedinformation about what you knowabout them and how you will reachthem.

1. Explain concisely your target markets– for example children under 12years, adult learners or if you havemarket research you may refer tothem by demographic profiles orother types of segmentation. Themain thing here is to ensure youhaven’t listed everyone in the world.You need to prioritise.

2. Describe a typical visitor – this is afun exercise that everyone will enjoydoing. It allows you to think aboutwho is really coming through yourdoors and what’s important to them.


Case Study

“The new management team at the Museum of Dartmoor Life inOkehampton, Devon used the re-accreditation process as anopportunity to introduce more robustfinancial and business planning. We used the excellent template producedby the South West Federation of Museums & Art Galleries. It has enabledus to clearly plan budget headings covering all aspects of the museum, toanticipate income and expenditure changes over the coming two years,and to make contingencies. The process also helped us to prioritiseprojects where additional external funding was required and to begin toidentify sources for potential grants”.

Andrew ThompsonManager, Museum of Dartmoor Lifewww.museumofdartmoorlife.co.uk

3. Describe what the decision makingprocess is for visitors coming to yourmuseum. For example are you adestination in your own right or areyou part of a wider heritage offerthat makes up a whole day?

4. Detail the size of the market youoperate in and where you seepotential or opportunity. You willfind a lot of this information readilythrough desk research or you cancommission a study from a marketresearch company.

5. Describe briefly how you will reachthem (your marketing plan) and howmuch you are going to spend doingthat.

Financial Analysis

In a business plan, you will typicallyfind financial statements that are madeup of three separate documents:income and expenditure statement, acash flow and a balance sheet. You mayneed an accountant to help with theseif you have a complex financialsituation so don’t be afraid to approachone if you don’t have sufficient in-house knowledge.

Start by looking at your income. Makesure you include everything, e.g. ticketsales, retail, catering, events, rentsreceived, grants, donations andsponsorships. Your business plan maywell involve new income streams. Tryto be optimistically realistic! Startdocumenting your assumptions andthen start putting some numbers tothem.

Next, look at your expenses and seewhat resources you will need to fundboth your capital plans and your day-to-day running costs. Again be realistic.A look at your income and expenditureaccount will help make sure you don’tleave anything out.

This is a good moment to compareyour estimates with any benchmarkingdata you may have. There will bebenchmark figures for sales per squaremetre or sales per visitor. Catering will

probably be based on sales per head.This benchmarking data should beavailable through a trade association orfrom a consultant that you havecommissioned. Make sure you handleVAT in the appropriate way for yourorganisation (another call to theaccountant may be a good idea).

The cash flow comes next. It’s fiddly,even with the templates you might findon your computer’s software. In mosttemplates, all of the financialinformation automatically ties together(income, expenditure, cashflow,balance sheet), but it’s best to check tomake sure. When you are forecastingover a three-five year period, don’tworry about inflation, put everything inat today’s prices.

The balance sheet in a business plangives an idea of the state of theorganisation from a financial point ofview at a specific date in the future,normally at the end of the term of theplan or at the end of each phase. Thebalance sheet shows what you own,how much you are owed and howmuch you owe. In a business plan itshows the overall effect on theorganisation of achieving the goalsoutlined in the plan.

It will also be worth doing a sensitivityanalysis showing three differentexamples of income and expenditure: abad year, a good year and a great year!The adjustments you illustrate shouldrelate to your risk analysis.

Risks

Having created your plan it is importantto consider the risks that might preventyou accomplishing your objectives andhow you can take action to try toensure this doesn’t happen. Some ofthe possible risks may have alreadybeen highlighted when you wereworking on internal weaknesses andexternal threats.


Be conservative whenit comes to thenumbers – no ‘pies inthe sky’ in thissection!

TIP Remember to put the financialhighlights in your ExecutiveSummary.

If there are significant risks to yourorganisation that would affect yourviability (e.g. reliance on a single,unsecured funding source) you mayneed to include a detailed section onhow you are addressing this risk.

There are many ways of presenting arisk appraisal. The important thing is toconsider both the likelihood of the riskoccurring and the extent of its impact,in deciding which risks are mostsignificant. Only the most significantare likely to appear in the final businessplan. Here’s an example:

Monitoring and Adapting

Once your business plan is complete it is important to put aside time tomonitor your progress in achieving the aims and objectives and to adjustyour plans if necessary. Trustees willwant to be updated on progress inimplementing the business plan atTrustee meetings.

The financial forecasts should beupdated each year in light ofperformance in the past year, and if there are significant differences itmay be necessary to review theachievability of some objectives, either changing them or adjusting thetimescale for them or the resources to be applied to them.

This can be simply illustrated with atraffic light system – highlighting in redthose objectives that are not on targetto be achieved, in orange those whichmay be at risk or which need revisingand in green those that are on target tobe delivered.

Last Thoughts

You may be required to produce aproject business plan (for instance for a Heritage Lottery Fund application) or a forward plan (for instance forAccreditation). If this is the case, youshould follow the guidance provided bythe funder concerned.

The business plan is also an advocacydocument. It can be used to showcurrent and potential funders orpartners what your organisation isaiming to do and how it will be doing it,instilling confidence in your ability todeliver against promises. Sometimes abusiness plan is created specifically fora particular funder or partner and ifthis is the case, it should be adapted toaddress the areas that will be ofspecific concern to them.

Do…

Be creative! Don’t get stuck in atemplate. Make the plan your own andreflect your organisation.

Be conservative when it comes to thenumbers – no ‘pies in the sky’ in thissection! Build three different scenarios:bad, good, or great year!

Build in a reasonable contingency forthe ‘just in case’.


Risk Mitigation Impact score Likelihood of Combined Who is after occurring score responsiblemitigation after (impact �(1-5) mitigation likelihood)

(1-5) (1-25)

A DifferentView is aconsultancyspecialising in

visitor experiences of all types.We help and support museums,cultural organisations and thewider visitor attraction worldrealise their dreams andambitions through services suchas strategic and businessplanning and project planningfor funders such as the HeritageLottery Fund (HLF). Our sistercompany, Vivid View, is a fullservice market researchagency for the cultural andwider visitor attraction world.Please have a look around ourwebsite for projects, ideas andto get in touch:www.adifferentviewonline.com

Other ResourcesSouth West Federation of Museums &Art Galleries – resources on forwardplanning at http://www.swfed.org.uk/resources/organisation/management/forward-planning-toolkit-introBirmingham Museums Trust’s tool forassessing key risks which might facemuseums – www.raptonline.org.ukAccreditation guidance –www.artscouncil.org.ukAIM Visitor Verdict benchmarkingscheme – www.aim-museums.co.ukAssociation for Cultural Enterprisesbenchmarking scheme –http://www.acenterprises.org.uk/item.asp?II=53


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Copyright © 2013 A Different View – Rosalind Johnson, Sylvia Matiko, Murray Parfitt, Tamalie Newbery and Association of Independent MuseumsAIM Editor – Diana Zeuner

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