more than horses feasibility parts i and ii lydia genner marshall custer chompreeya baiphowongse
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More Than HorsesMore Than Horses
Feasibility Parts I and IILydia Genner
Marshall Custer
Chompreeya Baiphowongse
OverviewOverview
The Opportunity:
There is a shortfall of space in the Boulder area due to high commercial real estate prices and the lack in underdeveloped land. This creates a lack of affordable space in which resident and traveling artists can rehearse and perform. Additionally, there is no convenient outlet where artists can converge and interact with each other – feeding their psychological need for re-affirmation and collaboration while creating a creative space and community comprised of artists from different backgrounds and abilities.
Our Purpose:
To address this opportunity by establishing a multidisciplinary membership based arts co-operative that seeks to cultivate a sense of community and creativity in providing affordable access to work, rehearsal, and display space for Boulder’s performing and visual artists.
Market Size and GrowthMarket Size and Growth
Of 129 million employable Americans, 2.5 million consider themselves artists. Source: 2000 US Census
In Boulder: 200-300 People are actively and consistently attempting to participate in the
shared gallery and home gallery tours Over 1,000 general public attend these tours annually with the main thrust coming in
the Fall Home showings. At least 150 young emerging visual artists, that are not part of gallery showings. At least 500 non-professional (hobbyist) musicians
Usually between 20-35 years of age ~20 unique postings per day seeking Boulder musiciansSource: craigslist survey and personal interaction in the musician community
20 dance companies in Boulder with ~10 dancers per company Dance genres range from modern to ballet and tap to traditional native dances,
with a growing trend towards modern dance Approximately 50 undergraduate dance majors and 13 graduate dance
degree candidates at CU
Assumption:There will always be a thriving arts community, since artistic outlet is more a function of personal need rather than that of economic fluctuation.
Market TrendsMarket TrendsTheater and Dance: Movement towards more non-traditional venues and genres
Ex. Shakespeare in the Park, Frequent Flyers (aerial modern dance) Smaller, but more collaborative short term ‘pick-up’ groups Less reliance on classical repertoire and more focus on innovative material
Ex. Colorado Ballet’s spring performance of Where the Wild Things Are Public performance exhibitions gaining in popularity
Ex. Success of “365 Plays in 365 Days” and the Boulder Fringe Festival
Visual Arts: Rise in collaborative showings with a
common theme vs. traditional single artist showings
Ex. “Pretty Baby” photo exhibit, BMOCA trending away from single artists showing
Trend towards more installation art Often requires multidisciplinary skills and
the help of various artists to create and assemble
Musical Arts: Through the rise of sites such as
myspace and craigslist, musicians have become much more collaborative and less willing to commit totally to one musical project
Technology to create and distribute music has lead to an explosion in the number of self-proclaimed musicians
Generational TrendsGenerational Trends 60’s Children “baby boomer” were the first generation to massively rebel
against the values of the previous generation; they married later, began careers later, spent early 20’s pursuing self interest and generally began the early adulthood characteristics we still see today.
Late baby boomers exhibited a slight return to more traditional values; more career oriented.
Gen X’ers: Further pursuit of self interests during their early 20’s; considered lazy with a lack of optimism. Little trust in traditional values.
Gen Y: The EcoBoom, current generation coming of age. Largest demographic since the baby boom. Often a second round of children for baby boomers as such the these children are often raised in financially sound environment. EcoBoomers can afford the luxury of leisure and value self-fulfillment. Comfortable with technology, optimistic, accepting and highly interested in other cultures.
Conclusion: Large Population of EcoBoom generation have views in line with the goals of More Than Horses giving us a broad base of potential members across the country.
Artist SegmentationArtist Segmentation
Professional Artists –
Making a living from their art
(Age range: 35+)
They are the gate keepers that control recognition of new artists
They have their own highly guarded network
They enjoy helping and inspiring young artists, yet do not want to be burdened with over involvement.
Participate in Master Classes, Music Camps, Foundations for the Arts
Aspiring Artists –
Semi-professionals
(Age range: ~25-40)
They are seriously attempting to make a living from their artistic output
They often end up as teachers
They have less interest in social collaboration, yet more interest in actual networking for the benefit of their career
Emerging Artists –
Young, artistic socialites
(Age range: ~16-35)
They have often just started their “life on their own” – recent grads
They are just beginning the exploration of their artistic tendencies
They are very impressionable and highly inspired by group interaction
Deep desire to interact Want a sense of
community
Current MarketCurrent Market
Theater and Dance: Dance studios – Cater to professional and aspiring artists Churches and community rooms – Cater to all artists CU and Naropa dance facilities – Cater to all, emphasis on emerging artists
Visual Arts: Arts Galleries – Cater to professional and aspiring artists Art work studios, CU and Naropa facilities, Boulder Co-Rec – Cater to
aspiring and emerging artists, mainly through class offerings
Music Venues and Resources: Fox Theater, Boulder Theater – Cater to professional artists Churches and community rooms – Cater to professional and aspiring artists Co-op Market, Trilogy, various small venues – Cater to aspiring artists CU student union, rehearsal spaces, mom’s garage – Cater to emerging
artists
Value Chain Value Chain – – What needs can we addressWhat needs can we address
Professional Artists –
Often primary need is short term space
Recording rehearsal Performance prep Meeting places
Secondary need is psychological fulfillment
Desire to give back to arts community
Reconnect with roots Wish to inspire and be
inspired by next generation of artists
Aspiring Artists –
Primary need is work exposure to tastemakers (professional artists) and the public
Secondary need is for space
Work space and storage Teaching lessons (group
and individual)
Further need to develop their network through interaction with professional artists and professional showcase/ performance organizations
Emerging Artists –
Primary need is for affordable work space
Strong secondary need is for a sense of community
Environment for collaboration
Desire feedback from peers
Further need is for help in facilitating performances and exhibitions
Establishing in-roads with gallery’s and performance spaces
ThreatsThreats
Inability to establish ourselves as a credible institution in the artistic community
Inability to differentiate ourselves from existing art service organizations
Competing with free space Ex. Churches, community space, and university resources
Not financially feasible Is it possible at a low enough rate to attract a base of membership,
given Boulder high real estate prices? Customization costs of individual spaces for each discipline
Are we attempting to cater to too many groups? Unwillingness of member artists to participate in creating the desired
community environment Possibility that we could attract members that wish to operate
independently Risk of substitution with private rehearsal and specialized spaces
Market ConcentrationMarket Concentration
Deferring market saturations for different services:
Performance Space: Marginally to adequately addressed – professional acts do not lack space to present a
production, though it is more difficult for less established performers to find space Shortfalls correspond with performance weeks (ex. late summer - Boulder Fringe Festival,
early spring – university/high school recitals, holiday season performances – Nutcracker Suite Ballet)
Gallery Space: Large number or galleries in the boulder area that cater primarily to professional with limited
access for aspiring artists We consider this portion of the market bordering on saturation
Little to no gallery space allocated to emerging artists
General Work Space: Woefully under addressed
All interview point towards a dire need for general work space, regardless of artistic discipline or ability
Community Involvement and Other Observations: Currently, there is no organization committed to fostering multidisciplinary interaction
between artists Little to no availability for multidisciplinary artists to practice more than one art form in one
space
Degree of StabilityDegree of Stability
Key Assumption:For the foreseeable future it seems that Boulder will have a strong and thriving artistic community. Boulder is a creative environment with a long history of attracting creative individuals. This creates a constant inflow of new artists at all levels of ability.
Effects on Stability: Artists are transient by nature, however this transience tends to
equate to a constant, yet dynamic, artistic population Leads to the possibility of franchising the organization to other “artistic”
cities (ex. Minneapolis, Austin, Portland, Seattle, San Francisco, Chicago, and New York) where membership can transfer as members move
Boulder has a reputation for embracing and supporting the arts
Barriers to EntryBarriers to EntryHigh Initial Investment: Price of real estate in Boulder is high and climbing (ex. $561/sq. ft. for downtown
Boulder space) Importance of location for convenience and image leads to need to place facility near center
of Boulder Customization of facility would be very expensive
High build out costs for sound proofing, kilns, potter wheels, photography equipment, art material disposal and other environmental issues
Real estate and build out cost lead to possible difficultly in meeting competitors price on space rental
Possible Reluctance of Investors: Traditional investors may be hesitant to fund this type of business
Not a traditional business start-up (i.e. no new technology, etc) Return on investment will unlikely be as high as other investment opportunities given the
nature of our intended pursuit Solution: Approach professional artists as potential angel investors
Government Regulation: Compliance with 501c3 requirements for non-profit recognition and accreditation
Possible upside in the availability of grants as funding; however grant funding tends to go towards large scale “arts centers” vs. small arts co-ops and initiatives. We have a better chance of receiving grants with a larger scope of services and artists, demonstrating a larger impact on our community
Degree of RivalryDegree of Rivalry
The community of Boulder is known for its friendly nature. It has a reputation for openness to new partnerships in the arts world. This is a result of over saturation of the number of artists in the community and not enough outlets to meet their needs.
Approach to be taken: Focus on community and partnership; not rivalry Arts communities don’t like competition; they embrace cooperation Aggressive pursuit of establishing our image as a leader of multidisciplinary arts
in the Boulder community
For future consideration: Higher propensity towards rivalry exists in larger cities (franchising consideration)
Arts communities in other locations are territorial due to the nature of their funding (ex. Hull House in Chicago: primary provider of amateur arts services)
CompetitorsCompetitors
Organization Name Defining Factors
Dairy Center for the Arts Foot traffic of 300 people per day (students, teachers, artists)
Provide supplemental art’s education (children’s workshops)
2 theaters, 3 galleries, 1 performance space, conference rooms, classrooms, (40,000 sq. feet)
Space available at 60% discount from regular market
Mgmt Team: 46 member Board of Directors (investors & funding orgs), Staff of 12
Churches and Free Spaces
107 Churches/Social Spaces (Knights of Columbus)/Wedding Spaces in Boulder area
30 large churches offer free community spaces
Social spaces and wedding spaces charge a fee for rental
Seasonal demand – during recital and university performance periods.
Galleries BMOCA – caters to professional clientele, has one rental space for performances/business meetings/private parties
Rembrandt Yard – caters to professional and aspiring professionals; has 6 studio spaces in the basement for full time use
Blink, Smith Kline, Art & Soul: professional clientele with gallery space only
Boulder Arts Co-op
Competitors (cont.)Competitors (cont.)
Organization Name Defining Factors
Fire Station #2: Boulder Pottery Lab
Co-op for pottery hobbyists
Club is over 50 years old, 1784 sq. ft facilities
Supported by the Boulder parks and recreation department – facing funding cuts
Average class costs: $150-$185 (2 classes)
RMCMA
(Rocky Mountain Center for Music and Arts)
Group and Individual children’s lessons (work closely w/ CU)
Individual lessons $20-$23/ half hour
Annual registration fee of $20/individual or $25/family
Performance and rehearsal space rental: Main Hall $60-$70/hour, Recital Hall $30-$45/hour
Building hours vary according to teaching and availability
Mgmt Team: 8 member Board of Directors, Administration Staff of 7
Mgmt Characteristics: Art boards are typically comprised of individuals with a vested interest in the organization and/or affluent
members of the community looking to promote the arts through their personal involvement Galleries: Single owners and groups of artists interested in showing their own work and promoting
similar art forms and styles to that matching the gallery’s image
Basis of ComparisonBasis of Comparison
More ThanHorses
The DairyChurches/FreeSpaces
BMOCA RembrandtYard
Blink/SmithKline/Art&Soul
Boulder ArtsCo-op
BP L RMCMA
Arts Services Offered in BoulderStorage
Multi-disciplinary CommunityInteraction
Work Space
Rehearsal Space
Recital/Display Spaces
Master Classes
Music Lessons/Workshops
Basis of ComparisonBasis of Comparison – how we compete
Quality of our services Facility
Spaces must be appropriately lit for arts area – no sun/hard light damage Acoustically accurate and non-tiring to the ear: “quiet” Facilities must be secure, but accessible
Implement lockers/closets or lock away drawers/desks in large group use rooms – protect instruments and artwork
Artists want to keep supplies available and secure in close proximity to their work space Storage areas/building must be humidity and temperature controlled for the protection of
artwork and instruments Parking space and loading dock for ease of loading equipment
Traveling professional artists need quick access to facilities Aspiring artists often transports their equipment and displays for outside showings and
performances
Community Encourage artistic exchange through multi-use areas, gathering rooms, and
multidisciplinary showings/events
Control of the MarketControl of the Market
Price Will be dictated by the willingness to pay by the target market
Will artists be willing to give up ~$50/month for a “home base” Apparent target market does not possess high amounts of disposable income, but are willing
to pay to support and pursue their creative endeavors Price on value added
Addressing an unfulfilled need for space Addressing psychological need for community Promoting career advancement through classes and networking
Cost Space and renovation are main driver
Degree of renovation needed to adequately support desired services necessitate facility purchase not rental.
Reduction could come through donations and grants Leverage strong interest in advancing the arts community to help fund initial investment and
sustain the organization. Successful professional artists are often looking for opportunities to support artistic endeavors
(i.e. potential angel investors)
Market Fragmentation Many galleries/spaces are highly specialized and not in direct competition with one another Excess demand for our services, not excess capacity
Attributed to excessive cost of space in Boulder area and larger cities in general
ConclusionConclusion
Boulder has a large and diverse artistic community with needs that are unsatisfactorily met at this time. In particular, we believe there is a large enough segment of emerging artists that are almost completely ignored by current arts organizations and facilities to warrant the establishment of More Than Horses. We see a tremendous opportunity in addressing the needs of emerging artists while simultaneously serving the needs of professional and aspiring artists. The next step will be to fully identify how we can meet these needs and if it is possible to do so in a sustainable way. Currently, the biggest hurdle to overcome appears to be the price of real estate in Boulder.
More Than HorsesMore Than HorsesVenture AnalysisVenture Analysis
Feasibility Parts IIILydia Genner
Marshall Custer
Chompreeya Baiphowongse
Market & Industry AnalysisMarket & Industry Analysis
Size and Growth
We assumed that there will always be a thriving arts community, since artistic outlet is more a function of personal need rather than that of economic fluctuation.
200-300 People are actively and consistently attempting to participate in the shared gallery and home gallery tours
At least 150 young emerging visual artists, that are not part of gallery showings. At least 500 non-professional (hobbyist) musicians. 20 dance companies in Boulder with ~10 dancers per company.
Trends
All disciplines (Theater & Dance, Visual Arts, and Musical Arts) are moving out of traditional styles and becoming more creative through new innovation, technology, and advancement in communication.
Large population of the current generation (a second round of children for baby boomers – EcoBoom Generation) have consistent views with the goals of More Than Horses giving us a broad base of potential members across the country.
Market & Industry Analysis (cont.)Market & Industry Analysis (cont.)
Market segmentation & Value chain
There are three main market segments - Professional Artists, Aspiring Artists, and Emerging Artists – across all disciplines in which each plays different role and has different interests and needs.
Segments Primary need Secondary need
Professional Artists Short-term space for recording, rehearsal, performance preparation, and meeting places
Psychological fulfillment: a desire to give back to the arts community
Aspiring Artists Exposure to professional artists and public attention
Work space, storage, and classes with an additional need in networking with other segments
Emerging Artists Affordable work space Sense of community with an additional need in facilitating performances and exhibitions
Market & Industry Analysis (cont.)Market & Industry Analysis (cont.)
Current market
Theater and Dance: Dance studios, churches and community rooms, CU and Naropa’s dance facilities, The Dairy
Visual Arts: Arts galleries, Art work studios, CU and Naropa’s facilities, Boulder Co-Rec, Rembrandt Yard, The Dairy
Music Venues/Resources: Fox Theater and Boulder Theater, churches and community rooms, co-op market, Trilogy, various small venues, RMCMA, CU student union, rehearsal spaces, and “mom’s garage”
Threats
Main threats are inability to establish creditability and to differentiate services, financial feasibility, risk of substitution by free space or other private/specialized space, and unwillingness of artists to create the desirable community environment.
Competitive AnalysisCompetitive Analysis
Market Concentration
Access to work and rehearsal space is woefully under addressed to marginally or adequately addressed depending upon the market segment. In addition, there is no organization committed to fostering multidisciplinary interaction between artists and currently there is little to no availability for multidisciplinary artists to practice more than one art form in a single space.
Degree of Stability
Boulder is a creative environment with a long history of attracting creative individuals. It has a reputation for embracing and supporting the arts, therefore, we can assume that there will always be a constant inflow of new artists at all levels of ability. Since artists are transient by nature, this trend tendse to equate to a constant, yet dynamic, artistic population.
Barriers to Entry
High initial investment: Price of good location and renovation of building
Possible reluctance of investors : Nature of services and objectives of organization are not attractive to traditional investor, but possibility for professional artists whose objectives are more than a financial return.
Government Regulation: Compliance with 501c3 requirements
Competitive Analysis (cont.)Competitive Analysis (cont.)
Degree of Rivalry
As a friendly community by nature, Boulder has a reputation for openness to new partnerships in the arts world. There are a large number of artists in this community with limited space to satisfy their needs. Rivalry is minimal as arts communities tend to encourage cooperation not competition.
Competitors
Main competitors are Dairy Center for the Arts, churches and free spaces, galleries, Fire Station # 2: Boulder Pottery Lab, and Rocky Mountain Center for Music and Arts.
Basis of comparison
Arts services offered: Storage, multi-disciplinary community interaction, work space, rehearsal space, recital/display space, master classes, and music lessons/workshops
Quality of services: Temperature and humidity control, security, accessibility, sufficient parking space and loading dock, and community gathering space
Competitive Analysis (cont.)Competitive Analysis (cont.)
Control of the market
Price Depends upon willingness to pay by target markets. With the exception of professional, artists might not possess high
amounts of disposable income
Cost Main drivers are space and degree of renovation
Market Fragmentation Specialization creates fragmentation. There is a high demand with a very limited supply of space.
Conclusion
We believe that establishing More Than Horses would be a good opportunity to pursue because of the size of market and the needs of all identified market segments that are not currently satisfactorily being met by existing services. However, further analysis in the next sections will help identify whether More Than Horses will be possible and sustainable.
Venture DescriptionVenture Description
Our Proposed Service:
To create a multi-use building and community center that caters primarily to the needs of aspiring and emerging artists in the artistic disciplines of dance, music, and visual arts. We will offer affordable work, rehearsal, teaching, and storage space, as well as assistance in placing work and staging performances with partner arts galleries and venues.
More Than Horses will be a 24 hour accessible facility that promotes collaboration and community in the aspiring and emerging artists segments. Further, we will reach out to professional artists by offering short term rehearsal/prep space for recording and performances as well as the opportunity to “give back” to the arts through instructing master classes, providing guidance, and possible funding support.
Market OpportunityMarket Opportunity
Opportunity:
There is a lack of affordable space in which resident and traveling artists can rehearse and perform. In particular emerging and aspiring artists are underserved and dissatisfied with the arts offerings in Boulder. Additionally, there is no convenient outlet where artists can converge and interact with each other in an environment supportive of their work.
Compelling Need:
Artists, especially young artists, have a need for community interaction and acceptance of their work. These same young artists often lack the financial resources necessary to maintain a private studio or work space. Aspiring artists often face difficulty in navigating the complexities of placing and selling work in the evolving bureaucracy of gallery and performance venue businesses.
Compelling Needs of ArtistsCompelling Needs of Artists
Type of Need Description
Emotional/ Psychological Security and Peace of Mind – guaranteed safety for instruments and supplies
Comfort – atheistically pleasing and welcoming environment with ample common area for artist interaction
Intellectual Exploration, Artistry, Creativity, Growth, Professional Affirmation, Mentorship, Inspiration through exposure to other ideas, and friendly competition generated by self-comparison
Social Ability to interact with a peer group of similar interests creates a close nit community and a sense of belonging.
Economic More Than Horses space will be less expensive than the rent of other currently available options. Added flexibility in choosing from multiple payment options
Servicing Needs of ArtistsServicing Needs of Artists
Perceived Performance of More Than Horses
Focus on Styling, Safety/Security, and Dependability of access and use Styling: Input from members and recruited artists in the development of our interiors
and facility layout. Create open space within a flexible use shell facility that can be re-designed with ease on a continual basis.
Safety/Security: Member equipment, work, and supplies will be covered under More Than Horses insurance policies (further adding to economic benefit for members). Facilities will be humidity and temperature controlled to protect work. Controlled access through secured membership cards, check-in, and video surveillance.
Dependability: 24 Hour access to work/rehearsal spaces, common areas, and truck/car loading dock. Guaranteed available space in “ready to work condition” through planned adequate excess capacity.
Quality Of Community: Gained through purposeful recruitment of desired key artists in the
Boulder community through membership grants: “taste makers.” Also, through fostering relationships with professional artists.
Of Facilities: Modern equipment, availability of quality supplies, sound isolation, clean, well-lit studios appropriate for each discipline.
Servicing Needs of ArtistsServicing Needs of Artists
Membership Fee Structure of More Than Horses Different pricing structure for per-use, monthly, or annual membership
$20 per use $50 per month $500 annually
Classes and Teaching Room Rental Fees $5 per hour for members $20 per hour for non-members
Employment Discount Minimum of 15 hours per week =
complementary membership $10 per hour compensation
These fees are comparable to and provide the same access as owning own studio. (Found to be $150-$500 per month – in Boulder)
Servicing Needs of ArtistsServicing Needs of Artists
Access to More Than Horses Will strive to ensure that space is available for any type of artist at any
time. 24 hour member access – Individual key cards and front desk check-in
Ample parking available: both for member use and visitors to the facility Loading dock for equipment transport and art installation
Social Reputation of More Than Horses Membership adds to the artist’s social status within the greater arts
community when associated with our organization: “Street Cred”. This creates an image of legitimacy for aspiring and emerging artists. As a member of More Than Horsees artists will have access to more resources and more exposure to current trends within their own and other art movements.
Range of ServicesRange of Services
Size, Décor and Layout Estimate a need of 12,000 square feet per 300 members
Highest number of members at any given time using facilities would be ~20% Décor will be created by members through their projects and displays Open layout
Common area/display area/performance area centrally located within the building
Work space areas/teaching rooms/rehearsal rooms branch off of the common area
Employee Qualifications No formal dress code No specific previous training Number of workers based upon number of members
starting with 10 employees (2 per shift)
Target Market – Consumer MarketTarget Market – Consumer MarketFocus is on Aspiring and Emerging Artists, with professional services and continued outreach to Established Artists
Overview of Survey Results
Demographic Information Even interest from males and females Between ages of 20-30 years Self-identified as aspiring or emerging artists (most likely are aspiring)
Artistic Disciplines: Painting, Drawing, Sculpting, Instrumental Performance, & Dance Most interest shown in Sculpting, Painting, & Instrumental Performance
Willingness to Pay 90% of respondents willing to pay $51-$75 per month for membership Remaining respondents willing to pay $101-$125 per month for membership
Current Satisfaction Level All respondents are either dissatisfied or very dissatisfied with the current offering of artistic
services available to them in Boulder (i.e. work/rehearsal space, performance space, display space, and their ability to collaborate with fellow artists)
There is moderate satisfaction with the current offering of classes in the Boulder community
All respondents expressed a strong interest in participating in More Than Horses
Target MarketTarget Market
Distribution Channels – Introduction of our Services and Establishing Image
Word of Mouth Campaign Propagated through fellowship grants for key artists in the community (tastemakers)
Goal: bringing in key members of the community that will attract others to use our facilities and services and add greatly to establishing our reputation
Monthly Events (Parties) Goal: draw in younger aspiring and emerging artists (20-30 yrs) and build
excitement about the mission Introduction to facilities and opportunity to meet and interact with prospective
members (foundation for “community feel”), and try out available services at no cost
Use Book of List, Publicist, Professional Channels Reaching out to Professional Artists
Goal: establish relationships and build excitement about future involvement with More Than Horses. Ability to use artists names to further bolster our image and legitimacy
Secure and schedule master classes in coordination with touring schedules
Target Market - Business MarketTarget Market - Business Market
Forming Partner Organization Relationships: Creating mutually beneficial relationships that add to the visibility and play upon the strengths of each organization
Target Organizations: Dance Companies w/ Performance Spaces Galleries w/ Display Spaces Musical Performance Venues Other Arts Organizations (The Dairy, Rembrandt Yard, Etc.)
Who Makes the Decisions: Partnership decisions are made by one director in a small organization. Establishing access
to decision makers is critical and decision can be made within a short period. Dance Companies/Galleries/Other Arts Org – Director is decision maker, accountable to organization
members and/or board Musical Performance Venues – Booking manager is decision maker, only concern is ability to fill his
space Risks:
Budgets: All arts organizations are constrained by very tight budgets Response: Focus on ensuring initial joint projects are a success for partner organization
Possibility of perceiving us as fundraising competition which can lead to them becoming territorial with their resources and facilities: An unwillingness to partner.
Response: Focus on revenue and fundraising model that does not encroach on partner funding sources.
Unique BenefitsUnique Benefits
Feature BenefitsAffordability Cost Saving: $50/mo vs. $200/mo studio rental
Security of Facility Peace of Mind from having equipment and supplies in a secure and insured facility (indirect cost saving to the member)
Community Inspiring social interaction that leads to a sense of greater creativity and exchange of ideas
Master Classes Skill development through professional exposure and mentoring
Accessibility Convenience and freedom to use facility on your time schedule; just as if you owned your own studio
Work Environment (décor/styling)
Comfort and desire to be within the facility; inspiration through surroundings
BenchmarkingBenchmarking
More ThanHorses
The Dairy
Performance
Community
Work/Rehearsal
Décor
Multidisiplinary
Security
Access
Storage
Affordable
Artist AssistanceThe Dairy: Targets professional and aspiring artists Focus on providing performance space
Very high quality facilities
Rental rates: ~$700/week for theater/performance space
Limited work/rehearsal space, only available to permanent residents (at capacity)
Established reputation and modern industrial décor
More Than Horses: Target mostly aspiring and emerging artists Focus on providing quality work/rehearsal space
at an affordable price Limited performance space
We wish to match or exceed The Dairy’s level of quality in terms of its reputation, décor, and security while additionally addressing the needs of aspiring and emerging artists such as 24hr access, storage, work/rehearsal space, artist assistance, and affordability
Sustainable Competitive Advantage Sustainable Competitive Advantage (SCA)(SCA)
More Than Horses will seek out a Sustainable Competitive Advantage by locating its facilities in downtown Boulder and creating a reputation for bringing underrepresented and collaborative art to the public’s attention and appreciation. We will be known as the cornerstone of a tight-knit and desirable community among artists.
How Will We Do This? Location: Possible location between St. Julian and former Republic of Boulder zoned
by the city for “civic use” such as an Non/Low-Profit Arts Organization Limited amount of real estate available in downtown Boulder creates barrier to entry for
another establishment seeking a similar location Location in downtown Boulder will create easy access for many artists along with credibility,
reputation, and prestige associated with downtown location Community: Creation of a tight-knit artist community in which members feel proud to
be a part Create the feeling of exclusivity through membership Underground reputation generated through write-up and placement of promotional materials
in artists publications such as Ready-Made, Illiterate, Westword, etc. Currently, the artist community is fragmented by artistic discipline and small social circles.
We wish to exploit the ability to unite these fragmented sub-sects into a larger group and translate this into a sustainable advantage by being the pioneers in this area; therefore generating a loyalty and “local lore” behind our organization.
Resources to Create a SCAResources to Create a SCA
Financial Seeking Funding from Established Artists
Established Artists will not usually endorse multiple organizations in a small area such as Boulder; therefore each artist we partner with will likely support More Than Horses exclusively
Other Private Grants Local philanthropists: Boulder has large number of independently wealthy
individuals leading to greater ease in seeking donations for the given population• Risk: Run into the possibility of encroaching upon funders of other arts organization in the
Boulder area Federal, State, and Local Government Grants
Greatest possibility of grants coming from Federal and Local Government (Land Grant from City of Boulder – possibility of downtown location previously described)
Member Fees – Once operational, projected to offset 60% of organizational costs Possibility of Debt Financing – Using high value of building and land value as
collateral for bank loans Board of Directors – Financial obligation to donate/support the organization and
to use their personal network to aid in the fundraising process
Resources to Create a SCAResources to Create a SCA Physical Assets
Own our facility through early donations, start-up grants and debt Location Purchase second hand equipment
Many for-profit facilities replace equipment before the end of the equipment’s useful life. This equipment can easily be purchased at a highly discounted rate. (ex. Fox Theater upgrades sound system every year regardless of condition of current system)
Possibility of absorbing Fire Station #2 Pottery club: acquiring their equipment for free
Human Member
Use as labor for construction, design, and staffing of facility Bring knowledge of how to build spaces (ex. dance space design, bricking kilns, sound isolation) Social networking and member involvement from the early onset of the organization will foster the
collaborative environment we wish to establish Prominent Board Members
Established Artists on board that can attract attention and bring credibility to organization High visibility community members that can use network to help the organization Both are possible angel investors
Intangibles Marshall and Lydia’s experience in both non and for profit arts business spanning multiple
artistic disciplines Established contacts and position with our target market of emerging and aspiring artists in the
community
CapabilitiesCapabilities
Key Strengths:
First hand industry knowledge and experience in multiple arts disciplines – in particular dance, music and visual
Access to and knowledge of navigating proper channels to contact professional artists (ex. agent listings)
Ease of relating and identifying with the need of our members Service Design: our main service will be to meet the needs of our members
As long as members are willing to pay a fee capable of sustaining our facilities, our services can be modified to the changing demands and preferences of members
Facility design will aid in the flexibility of capabilities (ex. Common rooms can be converted to performance/gallery space)
Word of Mouth Advertising Small active arts community in which we are already engaged will aid in member recruitment Transient nature of community will disseminate our reputation to locations across the
country and facilitate expansion when appropriate
Our Barriers to EntryOur Barriers to Entry
Real Estate in Boulder and High Initial Investment: Price of real estate in Boulder is high and climbing (ex. $561/sq. ft. for downtown Boulder space)
Importance of location for convenience and image leads to need to place facility near center of Boulder Real estate and build out cost lead to possible difficulty in maintaining an affordable membership
fee structure and as such we may not be able attract our target market Limited space to build in downtown Boulder Customization of facility would be very expensive
Build out costs for sound proofing, kilns, potter wheels, art material disposal, and other environmental issues
Competition for Fundraising Dollars: Saturation of non-profits in Boulder area Arts funding is historically extremely volatile and funding often directly competes against current
“giving trends” (ex. Environment, Natural Disaster, and Medical Research)
Government Regulation: Difficulty in gaining designation and maintaining compliance as a 501c3 non-profit organization Trend in reduction of government arts funding (ex. NEA budget cuts)
Leads to higher competition for already difficult to attain arts grants
Cost of Membership and Ability to Pay: Target market does not usually have disposable or reliable income
Expecting emerging artists to make a monthly payment might be a reach Members can be expected to be loyal to our idea and vision, but that may not necessarily translate to
payment
Barriers to Entry – We can EstablishBarriers to Entry – We can Establish
First to Establish Cohesive Community and Reputation: Offer fellowships to key artists in community in an effort to bring them and
their peer group into our organization Limited number of Boulder artists from which a future competitor could draw from
(i.e. Population of Boulder may barely be large enough to support More Than Horses, and less likely to support additional organizations of a similar nature)
Establish unique artist endorsements Professional artists usually only lend their name to a limited number of
organizations In a community as small as Boulder, highly unlikely one artists would support multiple
organizations
Location If we can secure downtown location (lot between St. Julian and the former
Boulder Republic) we will inhabit one of the last undeveloped downtown Boulder locations. Currently the only open location zoned for “civic use”.
Key RisksKey Risks
Funding – Insufficient start-up funding 24 months from land acquisition to building occupation: start-up funding must carry
organization through this phase Number of Members
Large number of members may be required to fund ongoing operations and achieve break-even
Velocity of Membership If we do not attract enough members in a timely manner More Than Horses could easily be
overcome by its start-up financial burden Donations will be harder to attract with a low capacity slow or non-growing membership
Swing in Economy Will not affect member base much, but will have a dramatic effect on the availability of
grants and donations Poor Location of Facility
Direct effect on our ability to establish our desired reputation and attract our targeted members
Tax Law Changes Effect our status as a non/for-profit business Additional swings in cost of compliance with tax code
Financial ProjectionFinancial ProjectionOperating Income 2009 2010 2011Growth 20% 30%
# of Member 250 300 390Member fee 150,000 180,000 234,000Other revenue 19,500 23,400 30,420Total revenue 169,500 203,400 264,420
as % of Cost 33% 29% 29%Cost of revenues
Direct labor 192,000 384,000 576,000Indirect + depre 328,500 328,500 328,500
Total cost 520,500 712,500 904,500
Gross margin (351,000) (509,100) (640,080)-207% -250% -242%
Operating expenseSales & Mkt 16,950 20,340 26,442Development 16,950 20,340 26,442G&A 53,450 56,840 62,942
Total operating exp 87,350 97,520 115,826
Operating inc/(loss) (438,350) (606,620) (755,906)
Break-even RevenueFC 520,500 712,500 904,500# Member 868 1,188 1,508
Break-even Revenue 520,500 712,500 904,500
Investment RequiredCAPEX 6,440,000 20,000 20,000Working Capital 19,500 36,500 54,000Other major exp 16,950 20,340 26,442Non-recurring 15,500 0 0
Start-Up Cost (24 months prior to opening)Land 2,400,000
Bldg & Improvement 3,600,000Capitalized cost from Archi+Eng 40,000
Other specific assets 400,000Total 6,440,000
Assumptions: 250 members in Year 1 paying an average of
$50/mo fees based on customer survey 20% growth for Year 2, 30% for Year 3
Minimal marketing cost, mostly comprised of fellowship grants used to attract new artists
Operating loss must be made up through grants and donations
Labor and Utilities based on 10 employees at $10/hr, 20 days a month and operating a 24 hour facility
No variable cost, break even is the number of members required to fully fund More Than Horses through membership revenue
Start-up cost based on locating 12,000 sq. ft. facility in lot between St. Julian and Boulder Republic
More Detail in Appendix
ConclusionConclusion
There is a compelling need for affordable space in the Boulder emerging and aspiring arts community. Our survey results show universal dissatisfaction with the current availability and associated price with work/rehearsal space in Boulder and a genuine interest in the other services More Than Horses wishes to provide. Further, no current Boulder art organizations seek to provide the range of services to a multidisciplinary population of artists.
We believe we can create a sustainable competitive advantage by being the first to establish a recognizable, cohesive, and tight-knit young artistic community in Boulder. We further wish to create a sustainable advantage by locating ourselves in vacant lot between St. Julian and the former Boulder Republic.
Upon review of the financials we show a need for 800+ members to break-even in Year 1, and 1500+ members by Year 3 paying an average of $50/mo. If we increase membership fees to $75/mo (a number not supported by our customer survey) we would require 550+ members to break even in Year 1 (increasing members thereafter). With an assumed capacity of 300 members using a 12,000 sq. ft facility it is impossible to fully fund More Than Horses solely on membership revenue. This fact will require More Than Horses to raise money through donations and grants in order to cover its operational losses. This fundraising would be in addition to the $6.44 million required to start-up the facility in the downtown location. Additionally, the artistic population of Boulder is highly unlikely to support a member base of more than 400 individuals for an organization similar to More Than Horses,
Based on the above we believe More Than Horses, as currently conceived, is
financially infeasible.
RecommendationsRecommendations
Possibilities for Feasibility:
Land grant from City of Boulder to reduce start-up costs
Large angel investments from professional artists “winning the lottery” Given the amount of money necessary to break even, we consider the possibility of raising
enough donations/grants/investments to be very slim
Location change to more affordable real estate This will negatively affect our ability to attract members and image creation
Investigate large arts cities (Chicago, New York, San Francisco, Minneapolis, Austin, Portland)
Cheaper real estate in blighted areas (popular with our target market) Larger population of artists from which to draw membership Greater visibility through exposure to larger population