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					More Than Horses
    Feasibility Parts I and II
                        Lydia Genner
                      Marshall Custer
            Chompreeya Baiphowongse
Overview
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 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 musicians
     Source: 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 Trends
 Theater 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:                                         Musical Arts:
 Rise in collaborative showings with a               Through the rise of sites such as
  common theme vs. traditional single                  myspace and craigslist, musicians have
  artist showings                                      become much more collaborative and
     Ex. “Pretty Baby” photo exhibit, BMOCA           less willing to commit totally to one
      trending away from single artists showing        musical project
 Trend towards more installation art                 Technology to create and distribute
     Often requires multidisciplinary skills and      music has lead to an explosion in the
      the help of various artists to create and        number of self-proclaimed musicians
      assemble
Generational 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 Segmentation
Professional Artists       –        Aspiring Artists    –           Emerging Artists         –
   Making a living from their art      Semi-professionals               Young, artistic socialites
   (Age range: 35+)                    (Age range: ~25-40)              (Age range: ~16-35)


 They are the gate                  They are seriously             They have often just
  keepers that control                attempting to make a living     started their “life on their
  recognition of new artists          from their artistic output      own” – recent grads

 They have their own                They often end up as           They are just beginning
  highly guarded network              teachers                        the exploration of their
                                                                      artistic tendencies
 They enjoy helping and             They have less interest in
  inspiring young artists,            social collaboration, yet      They are very
  yet do not want to be               more interest in actual         impressionable and highly
  burdened with over                  networking for the benefit      inspired by group
  involvement.                        of their career                 interaction
     Participate in Master                                               Deep desire to interact
      Classes, Music Camps,                                               Want a sense of
      Foundations for the Arts                                             community
Current 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 – What needs can we address
Professional Artists    –      Aspiring Artists   –            Emerging Artists     –


 Often primary need is         Primary need is work           Primary need is for
  short term space               exposure to tastemakers         affordable work space
     Recording rehearsal        (professional artists) and
     Performance prep           the public                     Strong secondary need is
     Meeting places                                             for a sense of community
                                Secondary need is for              Environment for
 Secondary need is              space                               collaboration
  psychological fulfillment         Work space and storage         Desire feedback from
     Desire to give back to        Teaching lessons (group         peers
      arts community                 and individual)
     Reconnect with roots                                      Further need is for help in
     Wish to inspire and be    Further need to develop         facilitating performances
      inspired by next           their network through           and exhibitions
      generation of artists
                                 interaction with                   Establishing in-roads
                                 professional artists and            with gallery’s and
                                 professional showcase/              performance spaces
                                 performance organizations
Threats
 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 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 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 Entry
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
 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 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)
Competitors
  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           107 Churches/Social Spaces (Knights of Columbus)/Wedding Spaces in Boulder area
Spaces
                            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.)
    Organization Name                                               Defining Factors

   Fire Station #2: Boulder   Co-op for pottery hobbyists
   Pottery Lab
                              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                      Group and Individual children’s lessons (work closely w/ CU)
   (Rocky Mountain            Individual lessons $20-$23/ half hour
   Center for Music and
   Arts)                      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 Comparison

                                              Arts Services Offered in Boulder
                                                                                          Storage

                                                                                          Multi-disciplinary Community
                                                                                          Interaction
                                                                                          Work Space

                                                                                          Rehearsal Space

                                                                                          Recital/Display Spaces

                                                                                          Master Classes

More Than The DairyChurches/Free BMOCA Rembrandt Blink/Smith Boulder Arts   BPL   RMCMA   Music Lessons/Workshops
 Horses               Spaces             Yard Kline/Art&Soul Co-op
Basis 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 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
Conclusion
 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 Horses
   Venture Analysis

     Feasibility Parts III
                   Lydia Genner
                 Marshall Custer
       Chompreeya Baiphowongse
Market & 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 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,    Psychological fulfillment: a
                                 rehearsal, performance             desire to give back to the arts
                                 preparation, and meeting places    community


  Aspiring Artists               Exposure to professional artists   Work space, storage, and
                                 and public attention               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.)
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 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.)
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.)
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 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 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 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 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 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 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 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 Market
   Focus 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 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 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 Benefits
Feature                Benefits
Affordability          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       Comfort and desire to be within the facility; inspiration
(décor/styling)        through surroundings
    Benchmarking
                                                                                     Performance
                                                                                     Community
                                                                                     Work/Rehearsal
     The Dairy                                                                       Décor
                                                                                     Multidisiplinary
                                                                                     Security
    More Than                                                                        Access
                                                                                     Storage
     Horses
                                                                                     Affordable
                                                                                     Artist Assistance
The Dairy:                                      More Than Horses:
   Targets professional and aspiring artists      Target mostly aspiring and emerging artists
   Focus on providing performance space           Focus on providing quality work/rehearsal
      Very high quality facilities                 space at an affordable price
   Rental rates: ~$700/week for                   Limited performance space
    theater/performance space
   Limited work/rehearsal space, only              We wish to match or exceed The Dairy’s level
    available to permanent residents (at            of quality in terms of its reputation, décor, and
    capacity)                                       security while additionally addressing the
   Established reputation and modern               needs of aspiring and emerging artists such as
    industrial décor                                24hr access, storage, work/rehearsal space,
                                                    artist assistance, and affordability
Sustainable Competitive Advantage (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 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 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
Capabilities
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 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 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 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 Projection
Operating Income       2009        2010        2011
Growth                                 20%         30%
                                                            Assumptions:
   # of Member              250         300         390         250 members in Year 1 paying an average of
Member fee              150,000     180,000     234,000          $50/mo fees based on customer survey
Other revenue            19,500      23,400      30,420
Total revenue           169,500     203,400     264,420             20% growth for Year 2, 30% for Year 3
   as % of Cost            33%         29%         29%          Minimal marketing cost, mostly comprised of
Cost of revenues                                                 fellowship grants used to attract new artists
   Direct labor         192,000     384,000     576,000
   Indirect + depre     328,500     328,500     328,500         Operating loss must be made up through grants
Total cost              520,500     712,500     904,500          and donations
                                                                Labor and Utilities based on 10 employees at
Gross margin           (351,000)   (509,100)   (640,080)
                          -207%       -250%       -242%          $10/hr, 20 days a month and operating a 24 hour
Operating expense                                                facility
   Sales & Mkt           16,950      20,340      26,442         No variable cost, break even is the number of
   Development           16,950      20,340      26,442
   G&A                   53,450      56,840      62,942
                                                                 members required to fully fund More Than
Total operating exp      87,350      97,520     115,826          Horses through membership revenue
                                                                Start-up cost based on locating 12,000 sq. ft.
Operating inc/(loss)   (438,350)   (606,620)   (755,906)
                                                                 facility in lot between St. Julian and Boulder
Break-even Revenue
                                                                 Republic
   FC                   520,500     712,500     904,500                        More Detail in Appendix
   # Member                 868       1,188       1,508
Break-even Revenue      520,500     712,500     904,500
                                                           Start-Up Cost (24 months prior to opening)
Investment Required                                                                             Land     2,400,000
    CAPEX              6,440,000     20,000      20,000                          Bldg & Improvement      3,600,000
    Working Capital       19,500     36,500      54,000              Capitalized cost from Archi+Eng        40,000
    Other major exp       16,950     20,340      26,442                         Other specific assets      400,000
    Non-recurring         15,500          0           0                                         Total    6,440,000
Conclusion
 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.
Recommendations
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

				
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