'Sound business models are a necessary component in a healthy Essay

'Sound business models are a necessary component in a healthy visualarts ecology and essential for most publicly funded organi - Essay Example In essence, a business model is greater than the financial transactions of an organisation recorded and presented in its financial statements. A business model provides a clear description of the rationale of how an organisation crates, captures and delivers value. In conducting business, sound business models are a necessary component in the visual arts ecology and most publicly funded organisations. However, there has been a widespread belief that numerous business models in the context of visual arts are relatively weak and have a high possibility of facing reduced funding with time. This beliefs have been backed by available research suggesting the same. Most organisations in the visual arts sector are characterised by undercapitalisation and holding reserves that are too little to support investment and growth and to cushion the organisation during times of crisis (Oakes & Oakes 2012, p.59). In most visual arts organisations, assets are never fully exploited and increased level of activity often translates into increase costs while visitors remain a relatively unexploited source of income. Within the visual arts ecology, there is minimal understanding of what a sound business model is and what it does for an organisation. This indicates the generally lower levels of business skills and understanding within the sector. Despite this, there is, however, a shared ground as to what a good business model should be like. The challenge arises in translating the shared opinion into tangible action. From a total business perspective, the culture depicted in visual art of individualism and a somewhat traditional leaning towards the values of the economic world. This may be problematic as it is difficult to be exemplary in something that you do not have high regard of or have full comprehension of. Business models relating to the visual arts sector and publicly funded organisations are somewhat technical and attention has to be paid to the detail in order to stipulate a viable and sustainable plan for the long run (Townley& Cooper, 1998, p.66). For example key aspects such as free entry into the visual arts organisations can be a blessing but will pose technical business challenges. This is explained by the fact, revenue is not generated directly from customers, let alone the contribution to overheads or surpluses. As a result, increased level of activity would lead to a disproportionate increase in costs compared to the revenues generated. In light of this, the business models drawn up for the visual arts ecology should focus on secondary revenue generating activities in order to supplement their lack of a direct source of revenue and enhance their operational sustainability. In formulating business models in the publicly funded visual arts sector, the key question still remains â€Å"what is a sustainable business model in the visual arts sector?† When creating a good business plan for the not-for-profit sector, key factors need to be p ut into consideration including the mission, the fiduciary perspective, the customer perspective, internal perspective and the growth and learning potential. In