Major Goals of the 5 Year Plan Are As Follows

The Balmoral School
Strategic Plan
January 31, 2011

Executive Summary

Goals

The School can put into motion a set of actions to overcome the challenges and capitalize on its opportunities.

Major goals of the 5 year plan are as follows:

1. To increase the reach of our mission by increasing the number of students, competitors, and community members involved in the programs. The school will serve 274 students in 2015, up from 127 students in 2010.
2. To increase the value of our instruction while increasing tuition income AND reducing the out-of-pocket expenses for our students and competitors. This will be accomplished through an innovative social fundraising scholarship program.
3. To make the Balmoral School financially secure by expanding to the level where it reaches economies of scale and can drive consistent income from tuition fees, ticket sales, business sponsorships, and regular donors. Through the 5 year plan, top line earned income is projected to increase to $178,000 by 2015, up from $63,000 in 2010. Contributed income will decrease in years 2011-2012 and then gradually regain current levels as the support from one major benefactor is replaced by a number of other supporters.

Initiatives

The Balmoral School will accomplish these goals through the following 6 initiatives:

1.  Increase the value and quality of our summer instructional sessions:
The Balmoral School will increase the value of our summer sessions by slightly decreasing the student-to-instructor ratios in 2011-2012. Balmoral will also increase the number of hours of instruction at each session to make the summer sessions more attractive to prospective students. These changes will increase the cost and decrease the gross margin from the summer sessions in 2011 to 14% from 23% in 2010. Gross margins will climb starting in 2013 and will exceed 40% by 2015 due to initiatives 2 and 3 described below.

2.  Increase the quantity of students, competitors and concert goers:
The Balmoral School will increase the number of students instructed at existing schools and launch new school summer sessions. New locations that are possibilities include Danville, Kentucky; Salt Lake City, Utah; and Birmingham, Alabama. Location requirements include:

a.  Strong Scottish and Irish music communities;

b.  Pipe bands for schools, fire departments or military bases;

c.  Non-profit organizations that support Scottish and Irish heritage such as the St. Andrews Society,

Clan societies, and annual Highland Games.
Likewise, the Balmoral School will increase the number of youth competitors at the Balmoral Classic and the number of Balmoral Classic concert attendees through better, more targeted marketing efforts.

3.  Add a ‘Social Fundraising Scholarship Program’ for the 2012 summer sessions:
This program will provide students with the tools they need to attain at least $100 of sponsorships from their families, friends and local organizations (St. Andrews Societies, Clan Foundations, Music & Arts Foundations). The program will be run mostly through third-party web sites that provide a turn-key solution. The sponsorships will apply directly to the student’s tuition fee. The Balmoral School, with the help of our supporters, will match the sponsorship up to $25 per student through a tuition reduction. This program will:

a.  Reduce the out-of-pocket expense for the students by $125, around 25% of the tuition fee. This will increase the value delivered to our students and may increase the number of students, as well.

b.  Enable the Balmoral school to build a relationship with the local organizations that make a donation in honor of the students. This will help the Balmoral School to attract potential students and donors in future years.

c.  Allow the Balmoral School to raise the tuition fees by $50-$100 per student in 2013-2015. Students will, in turn, be encouraged to raise additional funds to receive world-class piping and drumming instruction through the summer sessions.

d.  Help to demonstrate our mission to potential donors in ‘real people’ terms by listing the student musicians on our web site and other social media.

e.  This program may be extended to the Balmoral Classic in an effort to defray the travel, room and board expenses for the junior competitors who travel to Pittsburgh from across the USA.

4.  Provide Piping Instruction Online:
The Balmoral school will provide piping instruction to potential summer session students through the Internet. This will be accomplished by recording 6-10 instructional sessions, each approximately 20 minutes in length, and providing them to the students through our web site and/or a Facebook page. The instruction will be geared towards beginners who need extra practice to reach the prerequisite skill level required for the summer sessions.
The online instruction program will increase the value of our summer sessions while also building and strengthening our international community through low-cost web site community tools. The program will also give the Balmoral School a reason to reach out to every Clan and Pipe Band in the US and will give recipients a reason to learn more about the summer sessions and the Balmoral Classic Competition.

5.  Improve Marketing and Development:
In the past, the Balmoral School has utilized blunt instruments to reach a niche market spread across the US. But, in the last 12 months, the Balmoral school has begun building an email database of students, supporters, pipe bands, and other organizations. Balmoral will utilize this email database, along with low-cost, software-as-a-service marketing tools to better communicate with our community.
Likewise, with the support of our Board and advisers, Balmoral has sparked relationships with major donors & prospects through events at the Duquesne Club, the Pittsburgh Athletic Association and other locations. The school’s limited development efforts have yielded surprisingly satisfactory fundraising income thus far. Therefore, the school has an opportunity to significantly increase fundraising income through a better planned and managed development program.

6.  Improve Operations
Historically, the administrative processes of the school have been sufficient given its size and complexity. In order to execute the five year plan, the school is in the process of improving its operational effectiveness. The operational improvements are led by the Executive Director and include the following:

a.  Implement monthly and quarterly quantitative targets to measure success based on student enrollment, community member database size, corporate sponsorship pledges and fundraising income.

b.  Implement a monthly financial reporting calendar with the help of Bookminders, or a similar service.

c.  Add a new position of Director of Marketing and Development.

d.  Redefine, balance and harmonize the job responsibilities for the part-time and full-time staff and volunteers.

Incremental Program Expenses

Working capital is required to execute the plan. Expenses will be incurred in the first 24 months and before the related income is earned in years 2-5. The consolidated forecast section provides the financial outlook for the Balmoral School as a whole. Below is a bullet pointed summary of the specific projects and their fully-loaded expenses. The fully loaded expenses include the gross salary staff expense that will be allocated, as well as all other expenses related to each initiative.

1.  Balmoral Instructional Session Expansion:
This initiative will enable the school to increase the number of student served to 274 in 2015, almost double the number of students served in 2008. These investments will yield a significant long-term payoff through additional students, but may not attract enough students in the first two years to offset the associated expenses. Therefore, working capital will be required in first 24 months to launch the expansion. This effort will involve an expense of $59,000 between June 2011-June 2013 and is allocated into the following:

1. Increase the number of instructors:
   In 2011 and 2012, Balmoral will increase the number of instructors at each summer session to improve the student to instructor ratio. This will also provide the summer session instructors with opportunities for different instruction formats. The additional expense for this effort is $22,200 for 6 new instructors at the 6 current summer session locations.
2. New Summer Session Locations:
   Balmoral will launch summer sessions in new locations in the next two years in Danville, Kentucky; Salt Lake City, Utah; and Birmingham, Alabama. It will cost approximately $29,300 to set up and run two new schools in 2012 and to set up the third new school in the spring of 2013.
3. Pipe Band Workshops:
   Balmoral has made inroads with US Government and civilian pipe bands with budgets. In October 2010, the Balmoral School generated $1,100 after expenses on a single 3-day workshop. In 2011-2012, the Balmoral School will actively market instructional services to additional pipe bands. The expansion of this program will involve a $7,500 expense in 2011.
4. Improved Marketing
   The Balmoral School will utilize more modern and lower cost marketing tools based on the Internet to reach students through pipe bands, piping & drumming instructors, and Scottish & Irish cultural organizations. This effort will involve restructuring our existing database of students and prospects, purchasing/leasing low cost database and email marketing software, and making improvements to our web site.
   (The costs for the improved marketing efforts are wrapped into the Database Marketing project below).

2.  Balmoral Program Initiatives:
Initiatives involve a small upfront investment, low ongoing expenses and produce a gradually increasing income stream through increased student tuition fees and other support. These include:

1. Social Fundraising Scholarship Program:
   This program will be executed with the help of volunteers and staff, and will utilize low-cost software-as-a-service tools. The upfront expense for this will be $14,600 in the end of 2011 and beginning of 2012. The ongoing cost for the program will be relatively minimal as it will be incorporated into the normal operations of the summer sessions. The ongoing fee to maintain the program will be the vendor transaction and processing fee of less than 10% for each donation.
2. Online Bagpiping Instruction:
   The instruction will be provided by one of our world champion bagpipers. The upfront investment is $14,000 for all production costs. The ongoing expense to maintain the program is nil assuming YouTube provides free hosting service (safe assumption).
3. Veterans Day Parades 2011 & 2012:
   In conjunction with the Balmoral Classic Competition and Concert, the Balmoral School will organize a Veterans Day Parade. The Veterans Day parade embodies the ‘fostering tradition’ focus of our mission and will enhance attendance at the Classic competition and concert. The Balmoral School will attain corporate sponsorship for the parade, which will cover its costs by 2013. The working capital required is a total of $10,000 for the parades.
4. Pennsylvania Music Educators Association: The Balmoral School in April 2010 mounted an exhibit booth at the PMEA annual conference at the David Lawrence Convention Center, informing middle and high school music educators about the Balmoral School and our interest in providing assistance in all matters relating to the bagpipe. We have been selected to present a workshop at the April, 2011 PMEA annual conference in Hershey, PA entitled: “How to Integrate the Great Highland Bagpipe into Middle and High School Music Curriculums.” Our membership and participation at the PMEA annual conferences positions the Balmoral School as the source for instruction and information concerning the bagpipe to school districts and music educators throughout the state of Pennsylvania. The working capital required is $4000 to attend two annual conferences.

3.  Balmoral Operational Initiatives
These initiatives will increase the Balmoral School’s ability to serve more students and attain broader community support. These initiatives will permit the organization to attain long-term financial viability.

1. Improve the Balmoral database and Expand Online Marketing Efforts:
   This initiative will be completed under the direction of a board member with extensive expertise with nonprofit databases leveraging low-cost software. Nonetheless, the initiative will entail significant staff time to cleanse & restructure the database, to generate 24 monthly email blasts, and to actively add new contacts to the database. It will also involve a small upfront software fee, a computer, and training fees. The total database marketing initiative expense for June 2011-June 2013 is $29,000.
2. Upgrade Financial Reporting Capability:
   As the school expands, the need for timely financial reports will increase. This initiative will largely be completed by contracting with Bookminders, or other similar service, to outsource the school’s accounting functions. The approximate expense for this effort is $12,750 for 24 months, based on an estimated $500/month fee, plus an upfront $750 implementation fee.
3. Secure Office Space
   Presently, the Balmoral School operates out of offices in the home of the Executive Director. Balmoral intends to secure expanded office space for its staff and volunteers in January, 2012. The rent and incremental utility expense for January 2012-June 2013 is estimated at $23,400.

About the Balmoral School

Our Mission:

The mission of the Balmoral School is:

“To raise the standard and promote the appreciation of bagpipe music in the USA by providing world-class instruction, cultivating excellence in youth, presenting innovative musical events, and fostering tradition.“

Balmoral serves this mission in three ways:

1.  Piping and drumming instruction through summer school sessions across the USA.
The Balmoral School has educated 4000 musicians since 1979. Our principal instructors are world champions who travel from Scotland to teach at the Balmoral summer sessions. The Balmoral School is the ONLY program to train Americans who have won the Gold Medal in the top Scottish solo competitions. The summer sessions are largely funded through tuition fees.

2.  The Balmoral Classic US Junior Solo Competitions
Each year, approximately 25 junior pipers and drummers come to Pittsburgh for the ONLY national junior competition. Our competition rewards the nation’s best young musicians with the recognition they deserve and provides them with the confidence necessary to compete on international platforms. The competition helps to establish Pittsburgh as the center for excellence in bagpiping performance in the US. The event is largely funded through grants, concert tickets and sponsorships.

3.  The Balmoral Classic Concerts and musical events
a. In support of the competition, the Balmoral Classic each year hosts a concert with an internationally acclaimed ensemble that incorporates the bagpipe in its performances and attracts 350-700 people from a strong Western PA community of supporters.