Before the Business Plan, Begin with the Museum Feasibility Study

The feasibility study is the first step in starting a new museum or expanding an existing museum, and should be prepared before the business plan. Leisure Business Advisors LLC (LBA) specializes in conducting this study, which is generally required by financing institutions. The study provides market and financial analysis and projections that will be used in the developer's business plan.

The study also provides critical physical planning recommendations for the museum business plan. It is critical that design plans are in line with market needs and expected cash flow. These planning guidelines need to be in place before the construction and building can start. Designers, planners, and managers can all benefit from the guidance provided in the study.

As part of the feasibility study, LBA can work closely with you in preparing the initial image package that would assist designers in the planning stage of development that follows the feasibility stage. We could provide a walk-through description and color artist conceptual images of your new museum seen through the eyes of a typical visitor. These would preliminarily suggest its planned "look and feel" in business financing and marketing presentations.

The following paragraphs outline the major tasks typically involved in conducting feasibility studies.

Task 1: Orientation Meeting

An initial meeting would be held to discuss the project in more detail and to see the prospective site if one has been chosen.

Task 2: Site and Area Evaluation

The site and local area would be evaluated to determine its effect on potential usage. Factors include:

  • Market proximity
  • Physical limitations or constraints
  • Access routes
  • Traffic patterns
  • Surrounding development
  • Potential complementary and competitive facilities

Task 3: Concept Description and Industry Trends

The museum concept would be described and industry trends discussed. Readers of the feasibility study may be unfamiliar with the concept and this section of the report provides an introduction before specific project-related issues are examined.

Task 4: Market Analysis

The market areas would be defined based on distance from the site. Demographic characteristics for the resident market would be analyzed to provide an indication of support. This would typically include:

  • Population growth
  • Age distribution
  • Income distribution

The tourist market would be defined and analyzed. Based on available information, this analysis would likely examine:

  • Current size
  • Historic growth
  • Other characteristics

Task 5: Evaluation of Comparable Facilities

Selected comparable museums would be examined. Available reported information would be provided on individual characteristics, including:

  • Name and location
  • Physical description
  • Financial performance
  • Development costs

Task 6: Annual Usage

Potential annual usage for the proposed museum would be estimated for the first five years of operation based on a number of factors, including:

  • Planned components
  • Size of the available markets
  • Qualitative market characteristics
  • Market performance achieved by comparable facilities
  • Location and potential competition

Task 7: Physical Planning and Concept Development

LBA would make physical planning recommendations needed to service expected market demand. The specific parameters vary from one leisure attraction to another. Physical planning parameters may include:

  • Recommended types of activities
  • Recommended mix and sizing
  • Recommended visitor service space
  • Minimum land area or building space needed

Initial conceptual efforts may also be provided. These could include:

  • Functional layout diagram for the new museum
  • Narrative description of a typical visit from the perspective of a typical family
  • 3D computer graphics visualizations of selected activities

The final report could also include a video presenting the results of the feasibility study with a "fly-through" or "walk through" computer animation of part of the new museum.

Task 8: Financial Analysis

The financial analysis for the proposed museum would be based on the selected concept and potential usage. Financial estimates for the first five years of operations would include:

  • Revenues by category
  • Operating expenses
  • Operating profit or surplus
  • Return-on-investment for equity investors, if applicable

Task 9: Warranted and Typical Development Cost

LBA would determine the warranted development cost or investment based on potential profitability. This is the recommended maximum amount that should be spent to effectively develop the museum and return a reasonable return-on-investment to equity investors. This warranted amount would be compared to the actual development costs for other comparable facilities. Relative size would be taken into consideration. This comparison would provide guidance as to whether the proposed museum could be developed for its warranted investment. If it can be, the project is considered financially feasible.

Past Museum Consulting Projects

Selected past consulting projects are described below. All involved John Gerner, LBA's managing director:

Fort Monroe Cultural Business Plan (Hampton, Virginia  USA)

Fort Monroe is a former military base in Virginia that contains the largest stone fort ever built in America and more than a 100 historic buildings. It is 231 hectares (570 acres) in size. LBA prepared the cultural business plan in 2010 that was part of the interpretive master plan for Fort Monroe's reuse when it closed as an active military base. Click here to download this plan.

Kansas Cosmosphere and Space Center (Hutchinson, Kansas  USA)

The Cosmosphere is a science museum with many historic space exploration artifacts, including the Apollo 13 command module. In 2014, Leisure Business Advisors LLC (LBA) and Verner Johnson, Inc prepared a revitalization plan that emphasized STEM (science, technology, engineering, mathematics) education initiatives. This master plan included significant changes to the museum's mission, programming, exhibits and building layout.

Artisan Center (Staunton, Virginia  USA)

Leisure Business Advisors LLC (LBA) and Verner Johnson, Inc prepared a  comprehensive master plan for a new artisan center in the Shenandoah Valley during 2014. It would promote and support Virginia artisans through sales, exhibition, interpretation, education and special events. The goal is to inspire the next generation of artisans, strengthen communities, and provide an authentic cultural gateway to the region and state. Click here to download this comprehensive master plan.

Arkansas Arts Center (Little Rock, Arkansas  USA)

The Arkansas Arts Center is an art museum and center for the visual and performing arts. It features live theater productions, art classes, lectures, films, family programs, shopping and dining. As a subcontractor to A Different View, Leisure Business Advisors LLC (LBA) evaluated the market and financial feasibility of expanding the museum school in 2006. This effort included an examination of the performance of comparable art schools in relation to the size and quality of the markets that these facilities serve.

Clark Planetarium (Salt Lake City, Utah  USA)

The Clark Planetarium opened in 2003, replacing the historic Hansen Planetarium. It features a dome theater, IMAX theater, and 10,000 square feet (930 square meters) of exhibits. During its initial planning stage, Economics Research Associates was retained by the Hansen Planetarium to conduct the feasibility study for this new science center. As a subcontractor to ERA, Gerner Consulting (LBA's previous name) prepared the financial analysis and projections.

Walt Disney Hometown Museum (Marceline, Missouri  USA)

The Walt Disney Hometown Museum offers interpretive exhibits focusing on his life in Marceline.  The museum was dedicated in 2001. As a subcontractor to International Theme Park Services, Gerner Consulting (LBA's previous name) evaluated the potential of this museum during its planning stage.

Jones Archaeological Museum (Tuscaloosa, Alabama  USA)

The Jones Archaeological Museum tells the story of one of the most significant Native American archaeological sites in the country through modern technology and historical artifacts. Originally built in 1939, the museum reopened in 2010 after a $5 million renovation and expansion. Working with Taft Design + Associates, Gerner Consulting (LBA's previous name) evaluated the market and financial potential of this expansion before construction began.

Kennedy Space Center (Merritt Island, Florida  USA)

The Kennedy Space Center has been the launch site for every United States human space flight since 1968. As a subcontractor to Economics Research Associates, Gerner Consulting (LBA's previous name) evaluated future exhibit and theater needs at its visitor center as part of a long-term physical master plan effort.  In 2012, LBA was retained by the visitor center's operator to review its maintenance appearance from the viewpoint of a typical guest to the attraction.

Battleship New Jersey Museum (Camden, New Jersey  USA)

The USS New Jersey is a battleship that was decommissioned after service in World War II, the Korean War, the Vietnam War, the Lebanese Civil War, and service in the Persian Gulf.  As a subcontractor to International Theme Park Services, Gerner Consulting (LBA's previous name) prepared a market assessment for this museum and memorial before it opened to the public.

Nanshan Cultural Tourism Zone (Hainan, China)

The Nanshan Culture Tourism Zone is approximately 27 hectares (67 acres) in size, and contains several tourist attractions. These include the Hainan Culture Park, Felicity and Longevity Park, and Buddhist Culture Park. Its centerpiece is the Guanyin Statue of Hainan, which is currently the fourth tallest statue in the world. As a subcontractor to Economics Research Associates, John Gerner (LBA's managing director) evaluated the feasibility of developing this major tourism project.

Country Music Hall of Fame and Museum (Nashville, Tennessee  USA)

The Country Music Hall of Fame and Museum identifies and preserves the evolving history and traditions of country music while educating its audiences. Economics Research Associates was retained by the museum to develop a visitor origin tracking system and analyze its initial results. John Gerner (LBA's managing director) was a consultant with ERA and served as project manager for this market analysis initiative. 

Museum of Science (Boston, Massachusetts  USA)

Boston's Museum of Science features over 700 interactive exhibits, live presentations, and shows at its Charles Hayden Planetarium and the Mugar Omni Theater. Economics Research Associates was retained by the museum to evaluate the admissions system and make recommendations that would increase throughput and decrease waiting time. John Gerner (LBA's managing director) was a consultant with ERA and served as project manager for this operations analysis.

National Air and Space Museum (Washington, DC  USA)

The National Air and Space Museum of the Smithsonian Institution holds the largest collection of historic aircraft and spacecraft in the world. Marriott Corporation operated its visitor food service in 1984 and considered opening a full-service restaurant within the museum. Economics Research Associates was retained by Marriott to evaluate visitation patterns at the museum. John Gerner (LBA's managing director) was a consultant with ERA and served as an analyst for this consulting project.

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Leisure Business Advisors LLC
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Richmond, VA  23223  USA

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