Museums have a wide variety of functions. They develop and care for collections, engage with visitors and communities, and keep their buildings safe and welcoming. All these areas require some form of management to ensure the best use of money and other resources.
The importance of planning
Leading and managing a museum has many similarities to the management of any other business.
Museums need to make a surplus to survive beyond the short-term. Understanding your costs and cash flow, managing your risks, and diversifying your income streams will enable your museum to survive and thrive.
The better your business plan, the greater your impact on visitors. Your museum exists to make a difference to your identified communities and preserve your collections for the future. This requires comprehensive and strategic planning.
- Be realistic about your activities, your costs, and your opportunities for income.
- Think long-term: if you have start-up or project funding, what happens when it runs out?
- People are your most important resource. Have good processes in place for working with them.
- Anticipate change and know how to deal with it when it comes.
A sustainable business plan
A business plan is one of the most important tools available to a museum.
It is “a road map showing potential funders, trustees, stakeholders and most of all you, where you are starting from now, where you aim to go and how and when you are going to get there. It will also show them your plan for sustainability and how you will attract and generate the funds you need to pay for what’s necessary.” (AIM Success Guide)
Develop your business plan using all the stakeholders who are vital to a project’s success.
What to include
A business plan should help you keep track of which objectives are being met, whether you are missing any new opportunities, and evaluating changing conditions which could affect your museum. Sometimes deciding what not to do is as important as deciding what you should be doing.
A plan should be developed within the context of your purpose, and should include:
- Ways of identifying operating costs and restricted funds
- Where to look for sources of income and finance
- Market research indicating where your visitors will come from
- Identification and management of risk
- Minimising your environmental impact
- Ways to measure your progress and monitor your performance
- An awareness of legal issues, as outlined in the section on models of governance
Stages of a business plan
A strategic business plan follows a basic three-step structure of analysing resources and context, choosing from a range of options, and then implementing that plan.
Before starting your plan gather all the information you need:
- Existing plans
- Projected visitor numbers
- Visitor feedback
- Funder’s priorities
- Community needs
Then identify key influences, including:
- Potential audiences
- Possible activities
- Available resources, such as money, collections and buildings
- Changes that might affect the museum
- Options for taking advantage of new opportunities or mitigating their impact
- Projected income and expenditure
- Cash flow, particularly if your project includes large grants
- How you will ensure things are on track
- Who can make decisions and how they will be made
Once you have established these influences, keep the document live and ensure that it is reviewed regularly.
Avoid a business model which barely covers running costs, as this leaves no room for investment in new developments.
Be alert to your cash flow, especially when there is a delay between project expenditure and grant income.
Restricted project costs and unrestricted revenue must always be kept separate.
Sources of funding
Reduced public funding, lower returns from investments, and increased competition for grants means that museums have to be more persistent, organised, and entrepreneurial than ever when looking for funding.
Remember these key points:
- Funding is about building and maintaining long-term relationships.
- Involve everyone. Donations and sales come from building relationships with visitors and supporters. All staff and volunteers can champion the museum and its benefits.
- Trustees may have a role in fundraising, and additional patrons may be recruited.
- Look for funding from many small sources instead of relying on a single source of income.
- Think creatively about how you generate income, perhaps looking for capital growth and investment income.
- Seek income that is a good match for your organisation’s mission, such as charging for extra experiences, as long as it fits your model of governance.
- High turnover – the amount of business being done – and surplus, or profit, are different things. You need both for your museum to grow.
- Increased unrestricted income makes your museum spending more flexible.
Types of funding
You can cover core running costs through income streams such as:
- Admission charges, which have the potential to be your highest source of income
- A café, either owned by you or run by someone else on your site
- Delivery contracts with another organisation
- Products such as exhibition merchandise, special events, and reproduction licenses
- Retail sales from your shop, reproductions and research fees
- Learning sessions, where you charge for school activities
- Venue hire and hospitality for meeting rooms, weddings, and events
These are usually for one-off projects and development costs. A few do cover ongoing running costs. Read below for guidance on applying for grants.
This can be individual or corporate. Methods of fundraising include:
- Events such as coffee mornings and sponsored activities
- Gifts and donations, either from traditional donation boxes, bequests, regular giving, online giving, and crowd-funding
- Membership schemes that require an annual payment for benefits such as reduced admission
- Sponsorship from local businesses
It’s possible for museums to build up interest on their reserves or gain money from the increased value of assets such as property.
Grant application advice:
- Do your homework and be specific with your applications. Scattergun approaches don’t work – meet funders between your needs and theirs. Look up their annual report to see how they usually spend money.
- Contact the grants officer or funder long before you submit your application. They can offer guidance and indicate your chances of success.
- Check your project’s eligibility against the funders’ criteria. Don’t waste your time if you don’t meet them.
- Involve your colleagues and draw on knowledge from across your organisation.
- Identify what will make your project stand out.
- Avoid sector-specific jargon.
- Provide an accurate and sensible budget.
- Persuade donors that supporting culture is as important to the wellbeing of the community as other charitable causes.
- Look beyond ‘heritage’ grant streams. Think creatively about sources of funding linked to the idea and subject of your collection.
- Maximise any financial sources by using Gift Aid if you are a registered charity.
- One of the best ways to save money is through smart procurement.
- Remember that some governing documents come with restrictions on trading activity. In some circumstances a separate trading arm may be recommended.
- Identify all costs associated with your income stream – it may cost more than you can generate.
- Think about the full cost of generating different types of income. Develop ideas which offer the best return for your investment of time and money.
Working with staff and volunteers
A museum’s most important resource is its people.
We’ve written an extensive guide to training and developing volunteers. You can read through it for comprehensive guidance on volunteers and staff.
Below are some essential things to remember when working with staff and volunteers:
- Employees come with statutory rights including a written statement of terms of employment, paid holiday, and the national living wage.
- Part time workers have the same rights (pro-rata) as comparable full-time workers.
- If your staff and volunteers work with children or vulnerable adults you may need to register them with the Protecting Vulnerable Groups scheme (PVG).
- Volunteers do not have a legal contract. You can, however, establish a role agreement which sets out mutual expectations and behaviours.
- The most important aspect of working with people is to let them know how important and appreciated they are. Invest time, effort, passion, and knowledge into your staff and volunteers.
Equality and diversity
Equality is ensuring groups and individuals are treated fairly, equally, and no less favourably, specific to their needs. This includes areas of race, gender, disability, religion or belief, sexual orientation, and age. Promoting equality should remove discrimination, bullying, and harassment.
Diversity aims to enable everyone to realise their full potential by recognising, respecting, and valuing the differences in people’s contributions.
That’s why the Equality Act 2010 exists. It ensures that your museum is relevant to the many audiences which are critical to its survival and purpose. Reflect your different communities in your workforce and involve your varied audiences in the museum. By prohibiting discrimination and harassment of any kind, the Equality Act ensures that your establishment must be a more welcoming and inclusive place.
The Equality Act
The Act consolidates and strengthens previous equality laws.
Characteristics that fall under its protection are:
- Gender reassignment
- Marriage and civil partnership
- Pregnancy and maternity
- Religion and belief
- Sexual orientation
The act prohibits:
- Direct discrimination, including by association and perception
- Indirect discrimination
- Pregnancy and maternity discrimination
- Third party harassment
- Discrimination arising from disability
It also includes a duty to make reasonable adjustments.
The Act applies to all organisations that provide a service to the public. Failure to comply will leave you open to legal challenge from individuals or groups.
Embedding equality and diversity
- Create an inclusive culture that treats all staff, volunteers, and visitors fairly.
- Design your exhibitions, displays, and activities so that they don’t discriminate against individuals or groups. Ensure that all your visitors can take part in them.
- Encourage your entire workforce to develop to their full potential.
- Make sure that everyone knows how to recognise and challenge both inequality and discrimination.
- Ensure that your policies, procedures, and processes don’t discriminate.
- Encourage everyone, where practical, to have a say in museum decision-making.
- Broaden where you advertise for staff and volunteers.
- Establish that everyone has a role to play in promoting and embedding diversity, from trustees to front of house staff and curators.
- Where possible, make adjustments to your building to allow everyone to access collections and displays. Consider compliance with the British Standard 8300 for disabled access.
- Devise a plan for involving different sections of your community across ages, genders, and races.
- Make everyone feel welcome to your museum by removing any barriers to access and inclusivity.
- Be aware that catering to one group may inadvertently exclude others.
Review and response
Every museum needs to be able to respond to change. Change isn’t just a one-off event: it’s the normal state of being for even the most established museums.
When you want to create stability and ensure that collections are preserved for future generations, change can be confusing. It can happen because of external factors such as development in technology or changes to the economy. Equally, it could be because the audience expectations of a museum evolve.
Resilience arises from your approach to actively managing, reviewing, and adapting your plans while keeping focused on your goals.
How to manage change
Poorly managed change can alienate stakeholders and increase the costs of your museum.
To combat this, follow these guidelines:
- Keep a clear vision. The route may vary, but the direction remains the same.
- Maintain constant communication with stakeholders to manage expectations and keep their trust.
- Take time with solutions: don’t rush them.
- Be mindful your wider context and anticipate change when it’s still on the horizon.
- Don’t take on more responsibilities without considering your available time and resources.
- Identify how you will monitor progress and when you will revise and act on your plans according to what you have learnt.
Recognise that everyone responds to change differently, but always remember that you need to keep a focus on your purpose and goals.
Case study: Lismore Gaelic Heritage Centre
Lismore Gaelic Heritage Centre is social enterprise running a museum, shop, library and café on the Isle of Lismore at the southern end of the Great Glen. A charitable company limited by guarantee, it is also an Accredited museum.
The Centre was largely built up through successful grant funding. However, it is extremely difficult to secure grants for ongoing running costs and the organisation’s key focus is now to develop a robust business plan to make sure it remains financially sustainable.
In their own words
Our story started in 1994 when our three founder members came together to form The Historical Society – Comann Eachdraidh Lios Mòr. They held a public meeting at which nine others joined – most of whom are still involved in the Comann.
The teacher’s house on the island became vacant and, after negotiation with the former Strathclyde Regional Council, Comann Eachdraidh Lios Mòr was established in the schoolhouse at Achnacroish in 1995.
Support from the Nadair Trust and Cadispa allowed us to employ an experienced fundraiser at a time when EU and other funding was available to community projects like ours. We succeeded in raising money firstly to restore the cottage, a typical ‘cottar’s house’ and then for a new building to house our museum, which was completed in March 2007.
The result is an ecologically friendly building designed to fit with the landscape and culture of this gentle and beautiful island.
Our centre has enhanced the social life of our island by providing a place for people to meet and has helped increase visitor numbers to the island as a place to visit. We are very much part of our community, run largely by volunteers and constantly engaging people with our collection.
We have had a lot of success in raising money for projects. But it’s difficult to find money for running costs and we are now at a stage when we need renewal funding to address the ongoing wear and tear. We have been pleased to receive a grant from Just Enterprise for a consultant to help us become more financially sustainable.
Being a museum
We have been collecting artefacts since the Society started. We raised funds for two part time museum officers who helped us establish proper procedures to care for our collection.
We are proud to be an Accredited museum which is good news for the island – we now have somewhere for people to deposit local artefacts – for example the results of archaeological finds. The process has also highlighted the importance of proper governance and what it means to be the guardians of the building and the collection.
We are most proud of…
- The courage and vision of the original founding group of islanders
- Our building and the social enterprise side of what we are doing
- Our collection
- Our focus on the Gaelic language and heritage which brings us support from far afield
- Being an accredited museum
Our advice for others
- Go for it!
- Make sure you have the right group of people with enthusiasm, skills and an understanding that much of what you will be doing may be routine and boring at times. A mixture of vision and patience!
- Look past the shiny new projects and have a proper structured forward plan.
The Big Question
It is fundamental that you can generate enough income to run the museum from year to year to cover all your costs and allow you to invest in keeping it fresh and relevant. The next step helps you ask the critical questions to help you determine whether you have a sustainable business model.
If not, you are not viable as a business. This means you will not be able to meet the obligation of a museum to safeguard its collections. Return to the ‘first steps’ guide to review alternative initiatives you could undertake.
If you are overly reliant on a single source of founding, your museum will be at risk if circumstances change.
Limited capacity or poor management of staff and volunteers will curtail your activity and may leave you open to litigation. Review your approach and obligations.
If you fail to address these adequately, you may be left open to litigation.
If not, your museum will struggle to respond to new opportunities and overcome challenges.
If you have met all the above criteria, you can continue to our guide on the types of people who might visit your museum and the facilities and services they will expect.
Creating a business plan
- Arts and Business Scotland
- Association of Independent Museums: Successful Business Planning
- Birmingham Museums: Risk Awareness Profiling Tool
- Creative Carbon Scotland
- Heritage Lottery Fund: Business Planning Guide
- Office of the Scottish Charity Regular: Scottish Charity Account
- Scottish Council for Voluntary Organisations
- Arts and Business Scotland
- Association of Independent Museums: Success Guides
- Heritage Alliance: Funding Directory
- Heritage Lottery Fund
- Museums Galleries Scotland Funding
- National Council of Volunteer Organisations: Sustainable Funding
- Scottish Council of Voluntary Organisations: Funding Scotland Database
Volunteers and staff
- Association of Independent Museums: Recruiting and training volunteers
- Citizens Advice Scotland: Basic Rights at Work
- Scottish Charity Regulator: Trustee Duties
- Volunteer Scotland
Equality and diversity
Review and response