I read an interesting statistic recently. In ACE’s recently published 2008/09 submissions from Regularly Funded Organisations, combined ‘Contributed Income’ (sponsorship, trusts, donations, and lottery revenue partnership funding) fell by over £12.6 million (11%). But this was more than made up for by combined ‘Earned Income’ (ticket sales, workshop fees, merchandising, sale of books and magazines, etc.) which rose by £52.8 million (12%).
If you have read my blogs over the last couple of years, you will know that I hold a particular view of the “recession”; it was patchy, not universal. Its impact ranged from the catastrophic (if you were in house building, car manufacturing, or banking), to the liberating (with interest rates at an all time low, many households were between £100 and £150 a month better off). Public money was drying up, but private/personal money was plentiful.
Reliance on public funding has become an increasingly high risk strategy. I speak from personal experience as the ex-treasurer of an excellent provider of arts education which closed due to withdrawal of its core funding. Other organisations I know well are also starting to think the unthinkable – what if we can’t rely on public funding anymore?
So what is Plan B?
Well, I think public funding will become increasingly scarce, and with the hoops to jump through and numerous forms to complete, it will become harder to maintain.
There has been an interesting debate on LinkedIn to do with factoring as a way of improving cashflow. What caught my eye was a comment that said “payment terms has, and never will, kill a good idea”. I see this as a clarion call to every organisation that has a good idea – if it’s that good, someone will pay for it.
Tags: funding, personal, plan b, private, public
June 7th, 2010 at 1:13 am
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July 29th, 2010 at 9:21 am
This may sound harsh but many of the company that ceased trading “because of the recession” would have done so anyway. Many owners were trading on an idea and the good times, without the energy or skill sets to drive their business.
What is unfortunate are those who did everything that they could but a chain of events brought down their business through no direct fault of their own. Worst still are those who blame the recession for their actions which are questionable “at best” and bordering on the illegal. I.e. withholding or delaying payments, unnecessary redundancies or pay cuts, defaulting on agreed contracts and renegotiating after receipt of goods & services.
That’s why I renamed my company to PLAN C. Plan Bs tends to be used re-actively. I.e. something’s gone wrong what do we do? Or we want to improve something how do we do it? Plan Cs should use best practice to ensure business continuity & business development. We don’t know when external factors such as volcanic ash, agricultural diseases, industrial action or legislation can impact our business both directly and indirectly. Therefore have a Plan B if you need to fix something immediately, but work on Plan C to control momentum and development of your business.