Threads Dance Project // Minneapolis, MN
Photo Credit: Alice Gebura
THE COSTS ASSOCIATED WITH PLANNING, CONSTRUCTING, AND OPERATING THE SPACE
All space-related initiatives, big or small, require a commitment of financial and staff resources. So it is extremely important that early in the planning process you examine your organization’s current operating budget and tolerance for risk.
OBJECTIVE FOR THE EXPLORATION PHASE:
Determine whether your organization is prepared to take on the financial stress of a space-related initiative. One way to begin is by considering whether your organization currently operates at a surplus or a deficit. New or expanded space means increased expenses. If you regularly experience deficits or have debt on an existing loan, will you be able to pay for the increased expenses? If you expect your space-related initiative to result in increased revenue, how confident are you of your projections?
Even if deficits are not a challenge for your organization, you still need to determine whether your surpluses are large enough to support you at the anticipated scale of your new space. In either case, be transparent with your Leadership Team about any concerns or red flags.
KEY QUESTION FOR EXPLORATION:
Does your organization have the financial capacity to take on a space-related initiative?
TO DO:
Examine your organization’s budget. When you subtract expenses from revenue, is the difference a positive or negative number? What are the areas that may be affected by the space related initiative?
Revisit and update your organization’s business plan, or other document that details revenue sources, operations costs, program costs and capital structure. Can it be adapted during the planning period to create a surplus (e.g. by focusing on revenue-generating programs, or scaling back on programs to free up staff time)?