Business Planning Applying Business Planning to Heritage Regeneration

Contents • • • Definition Audiences Considerations Outputs Financial Analysis Summary

What is a Business Plan? • A formal statement of a set of business goals, the reasons why they are believed attainable, and the plan for reaching those goals. • But. . . a ‘Business Plan’ can mean different things to different people / organisations • Key factors: – – – New or existing business stream? One product or an entire business / organisation? Stage of development? Commercial or not-for-profit organisation? Who is the audience?

Types of Business Plans Internally Facing Externally Facing • For use by the management team • Setting budgets and goals • Medium term targets for meeting external goals • Identification of critical success factors • To inform / convince external stakeholders Ø Funding agencies Ø Regulatory bodes • Details on key management team • A sales document

Audiences Funders Staff & Management Other existing businesses Local Community Stakeholders Local & National Bodies

Funders’ Objectives • Charities / trusts / foundations – Meeting charitable / altruistic objectives • Public Funding Bodies – Good use of public money – Financially sustainable – Regeneration, job creation, quality of life etc • Private Individuals – Fame and glory! • Corporate Donors – Corporate social responsibility – Brand image / awareness

Heritage Business Planning Capital Investment in Heritage Asset Saves & Protects Heritage Building/Asset Brings building/ site back into public use Creates opportunities for commercial activities Creates a financial surplus Socio-Economic Benefits

Achieving Balance Site/Building Assets - built assets - landscape Site Vision - heritage protection - inclusivity Market Demand - commercial viability

Key Considerations • Typically for heritage projects, the Business Plan is one of a suite of documents – Conservation management, architectural plans etc • The Business Plan might be the only document read by key funders – And they may only read the summary! • Therefore it must be – – – Stand alone Paint a picture Interesting to read Concise and compelling Positive without being unrealistic

Layers of Information Financial heart or ‘engine’ Project Specific details Wider contextual information

Business Plan Template Section Heading 1 Executive Summary 2 History & Background 3 The Project 4 5 Market Appraisal Funding Strategy 6 Financial Appraisal 7 Management & Staff 8 Marketing & Communications 9 Assessing Risk 10 Monitoring & Evaluation Description Overview A bullet point overview summarising the entire Business Plan A description of the historic building or site, its current state, its history & significance. Key aspects of the project including: Ø Aims & objectives Ø Physical aspects Ø Expected impacts & outcomes Ø The existing project structure An analysis of the local and regional market within which the site will operate. Has any funding already been secured? What plans are in place to raise the full amount needed in order to fund the project. The aim here is to show that the project can become financially sustainable once the conservation / restoration works have been completed. Who will be responsible for delivering the project itself. And then, what management and staff will be needed in order to fun the site once it has been restored. How will the project be promoted – to potential funders, the local community etc. And what kinds of marketing & promotion will be undertaken once it’s completed? What are the main risks facing the project? How likely is each one, what would its impact be and what measures are in place to prevent the risk from occurring or to deal with it if it does occur? How will the project be monitored as it proceeds and by whom? How will the success of the project be evaluated once it has been completed?

Sample Outputs • Use of the historic environment as a learning resource • Greater accessibility to and engagement with the historic environment • Harnessing the potential of the historic environment as an economic asset

Sample Outputs cont/… • Improvement to the physical fabric of urban areas • Community involvement and sense of ownership • Improvement in confidence: a sense of pride • Improvement in image • Indirect inward investment into the wider area • Improvements in personal safety and a reduction in crime • Public access to heritage buildings

Quantitative Measures Numbers of visitors Primary and secondary spend Direct and indirect jobs created Number of buildings or square metres refurbished or taken off the ‘at risk’ or ‘in danger’ register • Level of public and private investment attracted • Numbers of residents • •

Financial Assessment Income - Subsidy - Commercial Costs - Trading - Maintenance/stewardship

Income • Sources of Income – Non-Earned • Grants and donations • Revenue funding • Bank interest – Earned • Admission charges • Commercial activities

Earned income • Typically driven by visitor numbers – How have you arrived at these? • Ticket prices – What is reasonable? • Commercial activities – Do they fit with the site / property / other users

Earned Income • The balance of income – Too dependant on one source? – Spread risk – But don’t try to do too many different things • Revenue vs income – What are the costs of generating that income • Time to build up business streams • Risks & contingencies

Costs • Trading Costs vs Stewardship Costs – Variable vs fixed • Key expenditure items – – – – – Staff Utilities Maintenance Office supplies/telephone Insurance Marketing & promotion Non-recoverable taxes Contingency Periodic maintenance

Income & Expenditure Model A Simple Example

Summary • Remember the Business Plan is a sales document • Make it as visually interesting & compelling as possible • Provide as much evidence based analysis as possible – If you don’t know something, acknowledge it and set out a plan of how you will go about filling the gaps in knowledge