Open Forum

We are looking at opening a 8,000 sq. ft. facility in the next 12 to 18 months. I realize that there are many factors / variables that contribute to the bottom-line economically speaking. That said, I would be interested in hearing from my peer group their thoughts / experiences in operating their museum:

How long does it take to break even financially?

Thanks for your assistance in advance. 

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Dennis Parmer
Director
Sugar Land Heritage Foundation
Sugar Land TX
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Hi Dennis. You might want to check the benchmarking resources available from AAM. From your question, it sounds like a new, stand-alone facility (not an addition to an existing museum)? If so, then you should anticipate that the venue will always need a balance of revenue: earned (admissions & membership, per-cap spending, special event rentals), contributions (annual fund, donor society, exhibit sponsorship), and perhaps endowment and/or public funding. Museums outside of the major tourism centers rarely find that earned revenue alone is sufficient to cover the operating costs.

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Laura MacDonald
President
Benefactors Counsel, LLC
Columbus OH
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Without some form of additional support it will be improbable if not impossible to break even based on earned income alone.  All of the private non-profit museums that I have worked in have had either a large endowment or a major income source from outside the organization.  I agree with Laura MacDonald, that AAM would be a great resource for you to use.  In addition to a major source of support, you will always need sponsors, facility rentals, etc. to achieve a break-even in operating your facility.

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Gregory Shuman
Deputy Director
National Museum of Nuclear Science and History
Albuquerque NM
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Dennis--

I don't think any museum ever really breaks even! There is always one more thing that could be done to help achieve the mission that only takes a few more dollars. And sometimes there are fewer dollars so a few important things don't get done.  

My goal would be to have a balanced budget from the beginning, with a very conservative revenue projection. "What can we do most effectively with what we have?" is the big question. 

It is very unlikely that you will ever have enough earned revenue (ticket sales, store sales, program fees, event rentals, etc.) to cover all of your expenses. You will also need memberships, annual fund donations, galas, grants, and, ideally, either an endowment or ongoing operating support from a larger entity to keep the doors open.

The revenue rule of thumb for museums is 1/3 earned, 1/3 donated, and 1/3 from endowment (or subsidy). I've never seen that rule of thumb met exactly in any museum, but it is an easy way to think about your revenue mix.  

Guy

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Guy Hermann
Principal
MuseumInsights
www.museuminsights.com
Mystic CT

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Just to verify, Dennis -- Your institution is a non-profit, and does have/will have 501(c)3 tax status, is that true? I think that's the model we've all been considering.

If you're actually a for-profit museum, that's a whole different scenario of course -- best, Mary LaGue

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Mary LaGue
Registrar
Taubman Museum of Art
Roanoke VA
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Hi Dennis,

So if I may, I could help you at least keep creative costs within reason.

I am graphic designer and I would love to help you develop exhibit and graphics, signage, imagery and typographic treatment, identity. Does it make sense to discuss possibilities?

justin@uppercasedesign.us

303-444-5212

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Justin Deister
Louisville CO
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