Playhouse Business Plan

 
Beverley Picture Playhouse, Feasibilty Review, Alun Bond – Artservice

 

7  PLAYHOUSE BUSINESS PLAN
7.1 Purpose of Plan

The purpose of this plan is to test out the viability of the Playhouse continuing to operate as a public arts and entertainment venue, including a programme of film. A number of commercial proposals for future operation of the building have already been submitted to the Council. This exercise is intended to offer an assessment of an alternative to the options proposed by retaining the venue as a public facility.

We have assumed that the venue would address the needs of the local arts community, including the town’s festivals, and would aim to maintain the capacity to show film. No design work has been undertaken on behalf of the Council (though some design ideas have been prepared by some interested parties as part of the Council’s process of seeking expressions of interest) and certain assumptions are made in this plan about the facilities and capacity a re-developed venue might have in order to inform the business plan.

The plan assumes that major capital investment has been undertaken and that the new Playhouse would:

· Have a 220-seat main auditorium with improved stage and backstage areas (seating capacity is an estimate and is not based on design work)

· The auditorium would have retractable seating so that the hall could be used in flat floor format

· Have a café and bar facility with street frontage operating in the daytime and evenings

· Have a meeting/training room in the building

· Be fully equipped for live performances and film.

7.2 Governance and Management

If the Playhouse is not to be operated direct by the Council or by a commercial operator then a new charitable trust would need to be set up to take on the lease and manage the building. This might consist of representatives of East Riding of Yorkshire and Beverley Town Council with independent members selected for the contribution they might make to the body. The most likely form of trust would be a company limited by guarantee with charitable status. The trust would have the capacity to apply for funding from a variety of external and charitable sources. In addition it could be eligible for relief from business rates at a percentage to be agreed with the Council.

 

7.3 Operation and Staffing

A trust operated Playhouse could benefit from voluntary sector support in a number of ways, including fundraising and staffing. If the venue was operated, as many arts facilities are, using voluntary stewards, then it could be operated on a small staff complement. This would reduce the level of operating costs.

We have looked at the operating models for Goole Arts Centre and Pocklington Arts Centre. Goole, though a much smaller facility, is located in a town of comparable scale to Beverley and provides an interesting operational model. The venue is operated by the Town Council with staff support provided on a part-time and casual basis. The venue offers a programme of live amateur and professional performances and occasional film and is only open to the public for events and activities. It has no ancillary facilities such as a bar and catering facility or rehearsal room.

The Playhouse could operate on a similar basis, but with its own dedicated staff employed by the trust. This would need to consist of:

· A full time venue manager/co-ordinator

· A technician – possibly part time

· An administrator – part-time

· cleaners

· Casual staff including possibly a bookkeeper, front of house staff (if not voluntary).

 

7.4 Annual Programme

The Playhouse could operate as a mixed programme facility presenting its own in-house programme of film, theatre, dance, comedy and music and amateur and voluntary sector performances and events presented on a hired basis. With sufficient staff capacity and funding it could also present an ongoing programme of participatory activity.

The venue could be available for hire by private sector and business users and other agencies seeking a venue for seminars, training activities, meetings, product and promotional launches, fairs and other activities. No assessment of the market for such activities has been undertaken, but it would overlap with the Memorial Hall if that were to be developed.

We have used the following annual programme of professional promotions as the basis for the business plan indicative estimates.

Playhouse Professional Promotions

No of events

Total estimated audience

Music promotions

25

3,850

Theatre, dance etc promotions

20

2,200

Film showings (inc. matinees)

150

8,250

Workshops sessions

12

180

Total

207

14,480

The above does not include local amateur and voluntary sector activities at the Playhouse, nor festival events and hires. The total estimated annual attendance for the venue’s own direct promotions is therefore 14,480, of which 8,250 are for film and 6,230 for live performances.

7.5 Indicative Financial Estimates

The three-year estimates assume that the venue will be operated by an independent charitable trust and that the Council would provide the building to the trust at a peppercorn rent with full discretionary rate relief. (If the Council charged an annual commercial rental it might decide to meet this cost by increasing the level of any grant aid to the venue by a similar amount – a negative balance would result). This presents the most favourable picture therefore in financial terms.

It assumes that the building has been re-developed and refurbished to provide a 220-seat main auditorium (this is a notional capacity and could be higher or lower depending on the design solution) with a franchised bar and catering operation and a meeting room available for hire. Though there might be some potential for including office space for hire within the building, we have not assumed an income from that source in the estimates as it has to be viewed as speculative at this stage. The building would be staffed professionally, but with some additional volunteer support with stewarding.

We have attempted to be realistic in terms of income which might be generated and to keep operational costs, staffing and marketing for example, at a modest level, so as to test out the minimum level at which the building might function as a public arts and entertainment facility. In effect this business plan proposes a baseline operational and financial model which could be expanded in response to market demand.

The following notes should be read in conjunction with the attached estimates and provide more detailed information on individual areas of income and expenditure.

Expenditure

Staffing

There is one full-time member of staff, the Manager/Co-ordinator, with two permanent part-time staff, the Administrator and Technician. These posts are supplemented by part-time/casual staff – a cleaner, a bookkeeper and front of house staff to operate the box office and oversee front of house and stewarding. It is assumed that the bar and catering operation would be franchised out and that staff would be employed by the operator.

Activities & Hires

The programme as set out above has been costed at average fee rates for each strand of programming, with music events costing £1,500 average per show, theatre, dance and other live events at £800 per show and film at £120 per showing. A small number of workshop sessions have been included to provide a modest educational programme.

Building Costs

Estimates are based on levels of cost at other similar facilities and previous Playhouse costs taking into account the increased size of the building and level of usage.

Administration Costs

A similar approach has been adopted as for building costs. A marketing and publicity budget of £15,000 has been included to enable the venue to produce a seasonal leaflet as well as other forms of advertising and promotional activity, essential in attracting audiences.

We have also included modest figures for contingency and depreciation of equipment.

Income

Activities

Income includes ticket sales in respect of the promoted programme, are based on a seating capacity of 220 and estimates of sales at 70% for music events, 50% for drama, dance and other live performances such as comedy, and 25% for film.

Venue Hire Income

It is difficult to assess the potential levels of income without more detailed research but we have assumed that there would be demand for a dedicated equipped venue from a variety of local groups, including non-arts groups, both for use of the main auditorium and for the meeting room space. Hire income levels have been set at modest levels, both in terms of cost per hire and volume of hires. Hire to festivals is included as a separate category assuming total usage for 15 events per year.

Bar and Catering Franchise

Estimating the level of income is complex for an arts facility, but it is assumed that the bar and catering operation would function both in the daytime and at evenings. Arts facilities operate bar and catering services both as a means of generating income and as a service to customers and this dual function has to be taken into account in estimating levels of income.

Based on our experience of arts venues income from bar and catering operations can fluctuate considerably between venues. Key factors are: quality and attractiveness of the facility; location – in particular whether the building has good footfall and can attract daytime and casual users as well as venue customers; the level of programme and activity within the building; and the efficiency of the bar and catering operation.

For the purposes of this exercise we have assumed that bar and catering services are franchised out and generate a total income of £35,000 in Year 1 rising by 5% in the tow following years. This sum might be made up of an annual rental, say £25,000 plus a percentage share of turnover.

Fundraising

A sum of £5,000 has been included in Year 1 to include local fundraising efforts, possibly by a Friends of the Playhouse group, and from trusts and foundations and sponsorship.

Refreshments Sales

It is assumed that the Playhouse would retain control over ice cream and confectionery sales and would generate income from this source. A net figure of £4,200 is included in Year 1.

7.6 Annual Funding Requirement

The estimates suggest an additional annual funding requirement of around £55,000 per year. We have not included annual grants within the income and it is likely that the above annual subsidy would need to be met from three funding sources, East Riding of Yorkshire Council, the Arts Council of England, Yorkshire and Beverley Town Council.

This figure is based on the assumption that the building is provided at a peppercorn rental and that 100% rate relief is available. No capital debt repayment charges are included.

This represents an annual subsidy per attendance of around £3.80 per head based simply on attendance at events (rather than at all activities which might take place in the building).

7.7 Capital Funding

There is no provision in the revenue estimates for capital debt repayment on the assumption that if the building were to be trust operated capital funding would be secured from charitable and other sources, rather than through loans.

If, for instance, it was necessary to secure loans for part of the capital scheme then this would impact on the annual revenue subsidy requirement. For instance borrowing £200,000 at 5% could require annual debt repayments of £10,000, increasing the subsidy required by that amount.

Work would need to be undertaken to identify potential capital funding sources, but with the closure of the current national Arts Lottery capital funding programme, the maximum capital award which would be available from regional Arts Lottery sources is likely to be £200,000 over two years, and even that might not be achievable.

A major capital scheme is likely therefore to require funding from the relevant local authorities as well as from charitable sources, private sector sponsorship, a fundraising campaign and individual donations.