Begin charging admission for patrons to view the rotating permanent collection. The attendance for the permanent collections for the past three ears averaged 302,409. If Coalman Museum decided to charge a discounted rate of $2 for the permanent collection, this would generate an additional $604,818. This would more than compensate for the average lost revenue Of $264,689.
Advantages: -bring in immediate revenue year round from attendance -50% of nonmember visitors would not have an issue with paying $2 fee generate additional memberships for frequent patrons to the permanent collection Disadvantage: -negative public image for charging admission for permanent exhibit Possible loss of 50% of non-member’s attending the museum -Potential loss f investors and reduced donations due to negative image of charging for admission B. Reduce current administration and personnel costs by 10%. The current costs of personnel and administration for 2004 was $5,750,260.
A 10% reduction of this would be $575,026. This amount would cover the continued negative revenue the museum has been generating. Advantages: -Public view of the museum would not change -would be able to market the museum to detonators as a free service to patrons -end the continued loss of revenue -allow the museum to replenish the museum’s financial reserves Disadvantages: More work will have to be spread across fewer employees -Reduction of hours could create disgruntled employees Recommended Course of Action would recommend the Coalman Art Museum to reduce their personnel and administrative costs by 10%.
This would allow the museum to continue to advertise and attract patrons and donations for being a great public facility. The museum would be able to gradually replenish their depleted financial reserves. While there will be tough decision in letting some employees go along with reducing hours for others. This decision will allow the museum to ATA operational and provide jobs for most of the 185 employees that will remain and allow more than the great number of 475 volunteers that the museum is grateful to have.
Implementation Donald Smith will have to sit with the senior staff and determine what actions will have to take place to cut 10% of administration costs. Donald will determine which positions are non-essential and decide how many current employees will be kept. Once this is done, Donald should request current employees to volunteer if interested in moving from a full-time to a part-time employee. After staffing is reduced, Donald will have to push for greater exposure and volunteer opportunities to provide any additional assistance that the museum requires to operate.