Stages 4-5: Show Me the Money
Stage 4: Finances
After you’ve gotten your approvals and your site is ready to go, two looming questions now come to the forefront:
- Do you have the money to pay for this, and if not, can you get it?
- Is there enough need for this project to make it sustainable (a nice way of saying, “will anyone care”)?
It’s always desirable to have financing (Stage 4) in place as early as possible. Realistically, however, there is a chicken-egg relationship between financing and design. You have to know roughly what you’re building in order to shape your fundraising/financing requests, but to get to a level where you have that knowledge, you’ll probably need to make some investment in the design. Usually, getting your design to the master planning or preliminary concept level is enough to a) establish a range-of-magnitude budget, and b) provide your potential donors or financiers the “pretty pictures” they need to understand your project. We’ll go into more detail on master planning, preliminary and final concept design over the next several weeks.
Stage 5: Feasibility
While conducting a feasibility analysis follows financing in our stage progression, in reality they go hand-in-hand. In order to make a compelling case to your donor, government entity, investors or lending institution, you have to assess whether there is sufficient demand for your project and who your target audience should be. The best way to make this assessment is to commission a feasibility study from an objective third-party who has experience in the attraction industry (i.e., not someone who has a connection to you, your organization or your project). This type of independent analysis allows you to get a business and market assessment that is not biased by the excitement and passion that you may have for the project. Feasibility studies usually include:
- Demographic analyses
- Assessments of your target audiences’ ability to spend money and their willingness to spend money on attractions like yours
- Estimations of capital expenditure and potential revenue
- Determination of the optimal dwell time for your facility and whether there are opportunities for repeat visitation
- Distance people are willing to travel to get to your facility
- Evaluations of like facilities (your competitive environment)
All of these factors determine your ability to raise capital and attract a sustainable number of visitors. JRA is happy to provide a list of trusted consultants that can provide these analyses for you.
So your project is feasible and has secured at least enough funding to get you through the next stages. Now the fun begins! And we’ll begin the fun next week when JRA joins your team and begins crafting the story for your project!