This article was first published in the May 2017 UK edition of Accounting and Business magazine.

For anyone unfamiliar with its host city, Derby Museums’ main building is a hidden gem. It is home to the world’s largest and finest collection of paintings by Joseph Wright of Derby (whose works were the first to embody the spirit of the Industrial Revolution), as well as an impressive and eclectic display of artefacts that range from Egyptian mummies to local porcelain. 

In all, Derby Museums has three museums in the city. Besides the main building, there is a beautifully preserved Georgian house once owned by local architect Joseph Pickford, and the 18th-century Silk Mill, the site of the world’s first fully mechanised factory and part of a Unesco World Heritage Site.

All in all, the institution, whose mission is to ‘positively affect the way in which Derby is understood’, is a thriving and busy place. That is all the more remarkable an outcome considering the financial strain that arts institutions around the country are under. 

Its director of resources, Mo Suleman, looks around the museum’s bustling café – recent winner of Best Café in the city’s Food and Drink Awards – with satisfaction. And well he might, because the museum’s current success has been anything but accidental.

If all goes well, it takes just over £2m a year to keep the museum going. In the 2013/14 financial year, 93% of its total income came from public funding. In the most recent financial year, that proportion has fallen to around 55%. 

The local council hived off control of Derby Museums to a trust in 2012. In the year to March 2016 it received £1.14m from Derby City Council, £399,000 from Arts Council England, £340,000 in grants, trusts and foundation income, £41,000 in donations, and £139,000 from trading activities. However, it lacked the expertise to become more commercial and sustainable

Suleman’s remit was simple: to ‘sort the business side’ and ‘help us make money’. Fortunately, he came with a reputation for both. His father, also an accountant, encouraged him from an early age and, after taking evening classes as a 13-year-old, Suleman became one of the youngest candidates ever to pass O-level accountancy. 

Swiss army knife

He then took the ACCA route to a professional qualification. ‘I deliberately chose ACCA because it is a more rounded qualification, and I knew I wanted to work in industry,’ he explains. ‘As my father said, it is the Swiss army knife of qualifications.’

After a career that took in audit roles at Smith Hannah, Moore Stephens, MacIntyre Hudson and PwC, Suleman saw a perfect opportunity to move into industry when First Inn, a Holiday Inn franchise, came knocking in 2008. 

As it turned out, the hotel sector was in for a rocky ride in 2008, but it was these cash-strapped years (and mentoring by Minhaz Manji, the hotel’s MD) that gave Suleman invaluable experience in managing costs and focusing on revenue potential. 

‘The plan was to make the business costs as variable as possible and minimise fixed costs so if occupancy fell so did costs. I also created and led an internal audit department that tested and implemented controls, which made a big difference. 

‘We took something like £250,000 of fixed costs out of the company in four years. That allowed us to keep going in the bleakest of hours before things started to improve.’ 

In 2013 a headhunter approached him about working for Derby Museums. He said no. ‘I simply wasn’t interested in museums, but they asked me to just listen to what they had to say. So I came here and met the trustees, and I was just blown away by their plans.’

He joined in August 2013 and began a thorough overhaul of how the museums were run. Teams were reorganised to follow the strategic objectives of the trust, and the workforce was trimmed. Key recruits with commercial experience rather than a museum background were brought in, and budget holders were given financial training. The trust’s management accounts were outsourced to a specialist consultancy, with instructions to identify and report key performance indicators and forecasts.

‘The first six or seven months were about getting good management information, getting the accounting right and the controls right, and changing the culture of the organisation,’ says Suleman. ‘Before, there was a tendency to spend money because it was in the budget. Our culture now is to be careful with our money because we are a charity.’

Next came the front-of-house activities. The museum now puts as much effort into being a visitor attraction as into protecting its collections. 

Finally, Suleman turned his attention to how the museum could make money.

Labour of love

The museum café has clearly been a labour of love for its director of resources. In 2013 commercial activities accounted for 2% of the trust’s income; today that figure is around 15%. A coffee aficionado, Suleman struck a deal with the coffee company Lavazza, allowing it to trial a coffee maker that made excellent coffee without the need to employ a barista.

Another important source of income are the buildings themselves. With the support of the curators, the museum’s galleries, Pickford’s House and the Silk Mill have been innovatively redesigned so they can be hired out for private events, and this year will bring in £120,000 alone.

Suleman clearly has an excellent instinct for a commercial opportunity, but that is necessarily constrained by the work environment. The museums house expensive artefacts and the aim of the trust is to educate and inform rather than to make money. ‘We are restricted in what we could do,’ he agrees. ‘It’s about working together with the rest of the organisation, and being flexible.’ 

There are big plans for the future. The Silk Mill was recently awarded £9.5m from the Heritage Lottery Fund and will be completely refurbished; there are plans to establish it as a centre for STEAM (science, technology, engineering, arts and maths). ‘We want to use our past to inspire young people to see themselves as innovators of the future,’ he says. ‘That’s what Derby was built on.’

Times to get tougher

The bad news is that the financial struggle is by no means over. Late in 2015, Derby Council announced it would have to withdraw its funding for the museum because of its own financial pressures. After negotiations, this became a plan to taper the reduction. The trust will now see its funding fall by £170,00 in 2016/17 and 2017/18, and by a further £684,000 in 2018/19. The trust will receive only what is essential to preserve its buildings and collections. 

‘The renegotiation has given us time to explore endowments so we can sustain the museum in the long term,’ says Suleman. ‘The forecasting skills I learned as an accountant were essential in persuading the council that we can reduce our reliance on them completely over time.’ With visitor numbers this year at a record level, it looks like he will be proven right. 

Liz Fisher, journalist