For the first time in touring company Paines Plough's 37-year history, we're building our own theatre – albeit one that travels. The Roundabout auditorium is a portable in-the-round space in which we'll perform a repertory of new plays using a single ensemble of actors. It's going to revolutionise the way we tour, enabling us to take a range of different plays to previously inaccessible places.

When we joined Paines Plough as joint artistic directors, it was our ambition to show work more widely than ever before. We've become obsessive about identifying the obstacles to touring and finding ways around them. Roundabout has evolved as a direct response to these challenges, and we hope it will mean a sustainable future for touring on the small scale (which is to say, spaces for an audience of less than 450).

Roundabout will be a self-contained, portable, "demountable" in-the-round theatre. It will comprise 150 seats over four tiers, or 100 seats over three tiers (depending on available space), creating an amphitheatre-style performance space. Think a miniature Coliseum, or Barcelona's Camp Nou. It flat-packs into a lorry and can fit into anywhere, from large theatres to studio spaces, eventually touring to village halls, schools, warehouses and parks.

Until now, we haven't been able to visit certain towns because they lacked a theatre. Or there wasn't a theatre the right size for the play. The Roundabout auditorium requires only an empty space – so anything is possible. In time, we hope to partner with major regional theatres to present work in places that have no theatre of their own.

Why in-the-round? Well, it's one of the most exhilarating ways to watch a play – a true 3D experience. As playwright and Paines Plough trustee Simon Stephens says, "there's no theatrical architecture that challenges or interrogates what it is to be a human being more than theatre in-the-round". With only five permanent in-the-round venues in the UK, few audience members will have sat encircling a play. We hope Roundabout will create a sense of event, and attract audiences like Imax cinemas attract filmgoers.

Another age-old challenge of the small-scale tour is how to replicate high quality production values in a range of spaces. Moving day by day to theatres of completely different shapes and technical capacities means elements of a production inevitably have to give way, while an audience's relationship with the work will also vary. The dimensions of the Roundabout auditorium are constant, so everyone will have a similar viewing experience, wherever they are.

Second, Roundabout features a repertory of plays. Currently we only tour one small-scale show per year which, while popular, is inevitably not to everyone's taste. We want to offer more variety. Venues can programme one or all three shows in whichever way they feel best suits their audience. Plus, working with an ensemble of actors means we are able to tour three plays for the price of one.

Last year we conducted a six-month research project and uncovered a vicious cycle in the small-scale touring network. The amount of top quality touring work isn't consistent, which means audiences don't grow and venues often lose money on staging new plays. Subsequently they can't offer visiting companies the financial guarantee they need, which in turn dissuades companies from touring. The supply is further reduced, and audiences remain underdeveloped; it's a catch 22.

Often, the best work retracts its reach to theatres in major cities, where audiences are in plentiful supply. In many parts of the country, smaller venues book safe bets such as tribute bands and standup comedians, or in some cases close down altogether. (The recently proposed closure of the Arc theatre in Trowbridge is another blow to the small-scale circuit. Locals now face a trip to Bath or Salisbury if they want to see professional work.)

With our partners, Sheffield Theatres, we built a prototype of the auditorium, in which we plan to show three premieres this autumn (plays by Nick Payne, Duncan MacMillan and Penelope Skinner). The theatre is made from sustainable materials and it offers an opportunity to test the architecture, try out the space and pilot the three-play concept. It's a life-size model of the actual auditorium, but will be unable to tour and is not built to last. Instead, it gives us the chance to get every aspect of the auditorium right before building a version that can be taken apart easily and quickly, and will last for years to come.

Then there's the £90,000 we need to raise in order to build the auditorium itself. It may sound like a lot of money, but really it's a steal for a fully functioning theatre that will last for a decade. Most new theatres cost millions, and they're stuck in one spot.

We genuinely believe we can get around the challenges of touring. But ensuring a sustainable touring system requires initial investment; only then can we pave the way for a new generation of touring companies to reach audiences in every corner of the UK.