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Questions to consider prior to creating your
Business plan
Description
- Name
- Location (description)
- Vision/Mission/About
- Legal registration – Please contact a Business consultant
specialised in your local market that can support you in
deciding which legal registration would be the best fit for
you.- Foundation
- Association
- Holding
- Co. Ltd
- Cooperative society
- Private consortium agreement
- Trust
- Other
Accessibility
- Opening
- All year with fixed hours
- by appointment only
- only for special events
- Entry
- Entrance ticket
- Ticket for events only
- Free (with ticket and/or reservation)
- Free
- Services
- Library/archive
- Special services for disabled people
- Education department
- Guided tours/audio guide/audio visual
- Bookshop
- Cafeteria/restaurant
- Online reservation/ticket sales
- Free Wi-Fi
- Other
Organisation And Governance
- Organs/functions
- President/Chairman
- Director
- CEO
- Administration Board
- Curatorial/scientific committee
- Professional team
- Registrar
- Curator
- Room assistant
- Cultural mediator
- Educational dep.
- Social media manager
- Press office
- Young artists programmes/residency curator
- Accounting Administration
- Project Manager
- Human Resources
- Employee
- Consultant
- External collaborators
- Volunteers
Activities
- Permanent exhibition
- Temporary exhibitions
- Educational
- Research
- Workshop
- Internship
- Publishing
- Residency (artists/curators)
- Meetings/seminars
- Training programmes
- Public and private Projects partnership
- Cultural events (es. concerts, cinema, theatre)
- Venue rent
- Other
Commercial Activities
- NO
- YES
- Artworks
- Artist multiples / limited edition series sell
- Catalogues/ editorial products
- Merchandising/design/craftsmanship
Fairs Participation
- NO
- YES
Which ones
Young Artists Programmes
- NO
- YES
- Exhibition
- Residency
- Grants / open call
- National/International Scholarships
- Production/Co-Production
- Artistic network
- Communication / social media
- Marketing
Does The Organisation Own A Collection?
- YES
- NO
If Yes, Artworks Acquisition Modalities
- Production
- From the artists
- From galleries
- Fairs
- Co-production with galleries (with or without purchase option)
- Co-production with museums
- Co-production with other institutions
- Donations/ bequests
National/International Networking
- NO
- YES
Description
Fundraising
- Self-financing / quote associative
- Public funds
- European funds
- Banking Foundations
- Donations
- Crowdfunding
- Sponsorships
- Tickets Sales
- Commercial Activities/ Rents
- Other
If possible indicate the percentage
Transparency
- Financial statement
- O NO
- O YES
- Is it public?
- NO
- YES
Visitors
- Exhibitions
- Number of visitors/year
- Education
- Number of participants/year
Communication/Promotion
- Channels
- Website
- Newsletter
- Magazine, brochure, leaflet, flyers etc.
- Social media
- Youtube
- Others
- Broadcasting
- Radio (local, regional, national)
- Podcasts
- Television (local, regional, national)
At Xyz Business Models
Intro.
In order for your platform to maintain integrity a strategy of in-house compartmentalisation is mandatory. In-house funding streams are a useful tool to preserve purist arts practice and promotion and keep the wolves at door. By separating your funding stream from studio and gallery practices, you insure against intermittent sales and an unpredictable market. With one or more revenue streams, you will be in a better position to sustain a genuine manifesto of supporting artists in their journey of self-discovery, rather than imposing financially motivated appraisals of work.
We appreciate that the financial reality of life as an independent artist is a healthy wall to push against; however, as an artist-led organization you will be responsible for preserving the integrity of artists and avoiding too many creative compromises. Less financial pressure when creating new bodies of work, leads to better and more authentic results. Monetising portfolios, comes after exhibition when you have proven demand and created a market for your artists. ‘Creative freedom, leads to exploration; exploration leads to innovation and a zeitgeist.
To successfully operate a symbiosis of commercial and creative, you will need to start with business models that divide operations equally. This can be through various commercial operations, with time or space and with licensees or sole-proprietorships.
For a more in-depth knowledge around specific models please contact us.
Models
- Studio / gallery & catering
- Studio / gallery & residential property management3. Studio / gallery & commercial property management
- Studio / gallery & gallery for hire
- Studio / gallery & weekend event venue for hire
- Studio / gallery & performance venue
- Studio / gallery & film and theater production
- Studio / gallery & shared community space
- Studio / gallery & shared commercial space
- Studio / gallery & broadcasting venue for hire
- Studio / gallery & photography studio
- Studio / Gallery & record store / music venue
- Studio / Gallery & art advising /private curation/ installation/
- Studio / Gallery & workshop with hired facilities management
- Studio / Gallery & licensee (workspaces, food & beverage, residential)
Business Model The Muse At Xyz
To be printed and filled out with your team
Key Partners
Who are your key partners/suppliers?
Which key resources are we acquiring from partners?
Which key activities do partners perform?
Key Activities
What key activities does your value proposition require?
What activities are the most important for your distribution channels, customer relationships, revenue streams etc?
What key activities do you need to deliver your customer experience?
Value Proposition
What core value do you deliver to your audience?
What bundles of product/services are we offering to each customer segment?
What jobs are our customers trying to complete?
What pains do they experience when trying to achieve their goals?
How does our product/service help them achieve their goals/relief pains?
Customer Relationship
What relationship does the target audience expect you to establish and maintain with them?
Which ones have we established?
How costly are they?
How are they integrated with the rest of our business model?
Customer Segments
Which groups of customers are you creating value for?
What are our most important customers? Why?
What differentiates our customer segments?
What opportunities are there to reach new customer segments?
Key Resources
What key resources does your value proposition require?
What key resources do you need for distribution?
What key resources do you need for customer relationship management?
Channels
Through which channel does your audience want to be reached?
How are we reaching them now?
How are the channels integrated?
Which ones work best?
Which ones are the most cost-efficient?
How are we integrating them with customer routines?
Cost Structure
What are the most important costs?
Which Key Resources are the most expensive?
What can be changed from a fixed cost to a variable cost?
Revenue Stream(S)
For what value are customers really willing to pay?
For what do they currently pay?
How are they currently paying?
How much does each revenue stream contribute to the overall revenues?
Designed by:
Designed for:
Version:
Example Business Model of The Muse
Key Partners
The Rayne Foundation – Funding
Art Council England? – Funding Art Schools and universities in the London area. – Finding new talents for the Muse residency program
Free Painters and Sculptors – Portfolio of artists for group exhibitions
The Galleries Association – Networking platform for artists and industry community
Portobello Radio – community internet broadcasting from the gallery every Friday including, musicians Independent Artists.
The Portobello Film & Arts Festival.
Key Activities
Gallery Exhibitions, Sales with low commission rates – physical and digital, Marketing of artists, Invitations to clients Studio Free studio space, mentoring, marketing, an exhibition with no commission
Value Proposition
Visitors/ Clients Inspire, and educate – both social and cultural value and providing a space for the local community Artists Incubate and support the artists by arranging shows, promoting the artist, selling the works, and providing services like financial and business management. Taking a smaller commission than competing galleries supports the artist to keep more of their pay.
Customer Relationship
Visitors / Clients The muse clients expect to get high-quality art and advice on what to invest in. The Muse has built a solid relationship with clients for over 18 years. Artists To support and promote their art at a low cost.
Key Resources
Our physical space is located in a central area with high footfall. Marketing resources to reach both target audiences. Talented staff with multiple skills.
Channels
Physical Portobello road 269 Flyers + postcards to be distributed in local public spaces Digital Webshop Art.Market Instagram Facebook Youtube Newsletters Various listings, Eventbrite, Artrabbit, a-n, Timeout, Seb’s Artlist Most efficient is Instagram and Newsletter at this very moment
Customer Segments
Artists (established and emerging), clients, visitors and the Portobello community. Both our artists, clients and the community surrounding the Muse. Without the artists there would be no exhibitions, without the clients, we would not earn any money and without the community, we would lack the culture that the Muse is built upon. With the residency program integrated into the gallery, we offer a space both for emerging artists to work alongside established artists and learn as well as an experience for the visitors who get to see artists during their process of creating artwork. In addition, The Muse Residency program does not put any pressure or dictate expectations on how much work should be produced or any kind of additional pressure on our artists. Portobello Road and the Muse are located in an area heavily trafficked by tourists this is a COST
Structure
Salaries, Marketing, Print and framing costs
Revenue Stream(S)
Commission from selling art (in general 20%, varies depending on the artwork and artists) Rent from renting the space out to external artists and/or companies
Property supporting the Arts
Existing models for creating in-house funding streams
Note: The Muse concept is a lifestyle that was designed to support arts practices and create professional development and networking opportunities. The model requires all associates to have at least one additional source of income along with their arts practice, and will only generate space and experience with nominal income for services rendered to the organization. This is an exercise in promoting the value of arts in society, as well as supporting those working under The Muse Umbrella. Your belief in art to elevate individuality and support collectivism is at the core of your success.
- Investment to purchase freehold / leasehold of the property
- Private investment
- Public investment
- Supporting Loans through fixed rental income
- A business plan
- Creating value in property
- 2. Property refurbishment and leaseholds
- Increasing the value of property in exchange for tenancy
- Creating relationships with landlords, sharing risk
- Managing residential and commercial lettings to subsidise space
- Feeding a loan through property rentals
- 3. Charity registration (UK)
- Artists as property managers
- Community outreach
- Rates relief in the UK
- National and International arts funding resources
‘There is no art without administration’
Our story…
Private Investment
A. Investment to purchase freehold / leasehold of the property
At XYZ we understand that, as an artist-led initiative, you will encounter more barriers than most, especially where the due diligence of banks and private investment is concerned. Our reference models, including The Muse (UK), offer an example of how best you can utilise resources available. This will invariably come with more financial liability, but ultimately you will be building personal asset value and retaining directive over the project, a key component for keeping out the wolves.
(i) Private loans for the purchase of property (town houses) to start your XYZ.
Buying a property can be one of the most stressful and expensive things you will ever do. As an XYZ pioneer, whether you have been through the process before or are a first-time buyer, it can be extremely complex and take weeks and months of planning and saving. There are many different aspects that have to be considered even before viewing and making an offer on an eligible property for your XYZ venture.
If you decide to develop your model as a sole proprietor, you may want to look at this from a private perspective. Whether you form a company to undertake operations, you may want to finance this yourself. Be prepared for this route, as although this can have real advantages, it puts a huge strain on your finances, especially your savings. There are services (see references below) able to help provide people with short term loans to cover essential expenses when required, there can be many unexpected things that can happen during the time you are saving up a deposit and waiting for a mortgage purchase to go through.
To help, we’ve gathered online information as a short guide on the main things to consider when looking to borrow money to buy a town-house suitable for your XYZ venture. Whether you are buying for yourself, there are various essential things to know. Here you will find out how to get a loan to buy a house, where to get a loan for a suitable XYZ property (for immediate use or conversion or both).
(ii) How to Buy a House with a Mortgage – The Basic Process
Firstly, borrowing money to buy a house is a different process from any other type of loan. With a mortgage, most lenders will require you to pay a deposit towards the property purchase as it is a secured loan. This amount can vary depending on the lender and the value of the property. This is unlike a personal loan or similar which does not require this type of security.
Most lenders will look at a loan to value (LTV) ratio and in most cases will not be able to provide 100% LTV (where they lend you the full amount of the house value). Commonly, the LTV will be no more than 95%, with most mortgages being offered between 80% to 90% LTV. This means the amount of deposit needed is high for most borrowers. This is why you would need to know exactly what your budget is and how much you have in savings to put towards a mortgage. The higher the value of the property, the higher the value of the deposit as you would need to pay upfront 10% to 20% of the house value to secure the mortgage. Here are some basics to consider:
- How much can you afford?– It can be very easy to start looking at your dream home without knowing what your budget is. You should assess your affordability and how much money in savings you currently have. You’ll need to decide how much per month you can afford towards mortgage payments and how much deposit you can pay upfront. If buying a house with parents’ money in the UK as part of a gift deposit, you’ll need to determine how much this will be too.
- Where are you going to live?– it’s a big decision to purchase a property so you will need to research where exactly you want to be and what type of property you’ll need. How many rooms? Do you want a house or a more industrial space? Would you prefer to have exterior space? City centre or outskirts (be conscious of travel and public accessibility)? These will all determine the property value along with where in the country it is. For the XYZ model, we recommend less sq ft for accessibility, making this venue a destination for each PV needs to be taken into consideration.
- Start viewing properties – once you have the basic needs covered and you know your budget, you should start viewing properties to get an idea of the size and the local area. Is it close to local amenities and public transport? How close are the nearest schools? The best way to know if the property you have in mind is the right size is to view it before considering making an offer on it.
How to Mortgage a House
Getting a mortgage in principle is an important step, as this will determine if a lender is prepared to provide the mortgage amount you are looking for based on your current income, the amount of deposit you have, and the value of the property. Most lenders will have set criteria of a maximum they would lend based on your income, usually 3 to 5 times your annual salary. This is why most people will look to buy a property with a partner or family member as it can be very expensive and difficult alone. This is where many parents may look at giving their child money to buy a house if they can afford to.
- Get a Decision in Principle (DiP) Before Making an Offer – you should ensure you have an agreement in principle with a lender before deciding to make an offer on a property. Most sellers and their solicitors will not agree to the sale of a house unless you have this as a minimum or already have a mortgage agreed. You’ll need to research which lenders you want to approach for a DiP and potentially also speak to a mortgage advisor for help.
- Make an offer – once you have a decision in principle and have found the property you want to buy, you can make an offer and see if the seller will agree. You may need to negotiate as some properties will be advertised differently, such as ‘offers in excess of asking price’ or ‘offer in the region of’. You’ll need to determine what you can afford to offer based on the DiP and your deposit amount.
- Complete a Mortgage Application – once your offer has been agreed by the seller, you’ll need to complete your mortgage application with the lender who has provided a DiP. You can choose to go with another lender, but most people will continue with the same one. Remember, the DiP is not a guarantee you will be approved as this cannot be done until full credit and affordability checks are complete. You can either complete an application online or book in to speak to a mortgage advisor to help. Once approved, they will help you choose the mortgage products that best suit your needs.
- Instruct a Solicitor – buying a home is complicated from a legal perspective, so you will need to find a solicitor that can help you. This includes doing all of the necessary paperwork and communicating with the seller’s solicitor. You will be able to arrange for a survey of the property too so that can check for any issues or defects structurally. You’ll need to consider that this is all additional costs on top of the mortgage, and you will have to pay Stamp Duty Tax if you are not a first-time buyer.
Can You Use a Loan for a House Deposit?
Generally, taking out a loan to cover a deposit is not recommended, even if it will save you time on saving for a deposit. This is because having further borrowing may affect a decision to get a mortgage, as you will have to repay this monthly as well as the mortgage payments. This is one of the reasons why some parents help with buying a house for a family member to live in, as it can quicken the process of saving over many months or even years.
Buying a house with your child or relative will differ depending on the situation. If you are just planning to gift money towards the deposit, the mortgage lender and the seller’s solicitors will need to have proof of where this is coming from. This is for money laundering checks to ensure the funds are legitimate. You will also need to consider whether inheritance tax will affect the gift, as if a parent dies within 7 years of gifting the money, their child may be liable for this which can be costly.
If you are buying a house with your child or relative in a joint capacity, so being a named person on the mortgage, this will depend on affordability. If a parent has their own mortgage they are still repaying, this may affect whether a lender is willing to agree to another mortgage agreement. It could be it’s deemed putting a parent into financial difficulty by agreeing to a ‘second mortgage’. Gifting the money rather than agreeing on a loan with your child or taking out a joint mortgage with them is usually the best way to help them. For parents who can afford to, they may wish to set up a trust fund to buy a property rather than giving their child money to buy a house.
Cash Loan to Buy a House – Who Can Help?
Most people may look to borrow money to help with related costs of buying a home, rather than getting a cash loan to buy a house. This includes furniture, home improvements and other essential goods they may need. This would usually be a personal loan or similar, such as an interest-free borrowing option through a retailer. Other forms of loans are not designed for this purpose, such as our quick loans at QuidMarket. We can only help to cover emergency expenses for a short term situation that may occur, such as a repair bill or other unexpected expenses.
Do You Need Good Credit to Buy a House with Cash?
If you are someone looking to purchase a property without the need for a mortgage, you generally wouldn’t need good credit. For mortgage applicants, having a good credit rating is usually expected by mortgage lenders due to the amount of risk with this type of loan. You may find some lenders are able to help, but they may charge higher rates of interest and will only lend a lower LTV that needs a bigger deposit.
There are lots to think about when it comes to planning to buy a property whether it’s for yourself or you are helping your son or daughter. Buying a house for your child is possible, whether loaning the money to them or gifting the deposit. It takes a lot of planning and saving, so starting as early as possible before applying for a mortgage and making an offer on a home is best.
If you require a small loan to help cover any emergency expenses that can crop up unexpectedly whilst saving for a deposit, or once fully moved in, there are many options online. Contact us if you have any questions and click apply now if you want to see how we can help today.
Please visit Money Helper for further information relating to move home or if you are experiencing financial difficulties.
References:
UK property finance
- https://www.quidmarketloans.com/bad-credit-loans/
- https://www.quidmarketloans.com/
- https://www.nortonfinance.co.uk/apply/homeowner
Other funding options
- Funding option 1
- Funding option 2
