It’s hard to tell how long the effects of COVID will last or the toll it will take on schools’ revenue and overall expenses. In order to ensure your institution continues to operate at its highest capacity, you’ve probably already created an emergency or immediate response plan. However, there will continue to be greater financial need for your families in the years ahead, and you will likely need to continue to address revenue challenges and make ongoing budget changes. How you approach these issues can sink or propel your school.
We’ve rounded up a few tips to help you think long term and ensure financial sustainability for your school in the years to come.
Where Schools Are At: Projections For the Fall
In a survey run by NBOA, 53% of schools reported that they expect to see a decline in enrollment over the next year.
In terms of budget projections, more than half of schools expect a deficit for the 2020-2021 school year. Small schools were more likely to report a deficit than larger schools. On top of that, there are increased expenses around IT, health and safety operations, and decreased revenue from auxiliary programs.
With an expected decrease in revenue and an increase in other expenses, it’s no secret that your business office needs to prepare a plan and new strategies to continue to ensure your institution remains sustainable.
Ways to Perpetuate Your Success + Ensure Financial Sustainability
Here are some ideas to help you on your school’s journey to sustainability:
1. Focus on retention
It’s much easier to support a current family than fill a seat with someone new. Retention should be a whole school initiative, and the responsibility is on both the business office and admissions and enrollment teams. You can create more stability in your finances and budget by keeping families year after year. Not to mention it will help you reach your enrollment goals year after year.
2. Establish a strong partnership between your enrollment and business offices
Forming a strong relationship between your business office and enrollment office and working closely with one another is essential to success and quality communication with your families. Data transparency is particularly essential for your teams. Using a system that allows you to see all of a student’s data and information in one place, including enrollment and financial details, will eliminate the lag time between offices. With a seamless platform like SchoolAdmin, you can immediately see who has turned in their contracts. Additionally, you can even see details like net tuition revenue for each student.
Together you can better assess the budget, set more realistic enrollment goals, estimate how many new students will be enrolling with what percentage of full pay, establish target numbers per grade or division, and double down on retention efforts. All of which can help your school remain sustainable.
3. Care for your people
The health of your offices, teams, and leaders will affect how families adjust to a new school situation. It can also play into the overall perception of your school. Make sure every faculty member has the support they need to do their job well. You never want them to become overburdened or feel burned out. Online learning and work can be taxing for your teachers, leaders, and families- make sure you provide them the support they need.
4. Consider rightsizing
Reconcile your school size with your budget. Take into account both your student enrollment numbers and faculty and staff size. If you feel cutting down is necessary for your school, be mindful of the effect it will have on your school community and the morale of your faculty and staff if people are let go. Rightsizing isn’t an easy approach, but it can help you to become more sustainable long term. If you decide to rightsize, you’ll also want to get your admissions and marketing team on board. They can help you explain and communicate why you’re doing this. Together you can make sure you share your goal to reach a sustainable size with your whole community.
5. Look into alternate revenue sources
Get creative by offering other options to increase your revenue. You can do things like offer online courses to students outside the school, implement a small distance learning fee to offset the cost of Zoom or other software, rent out your facilities for events, or deliver school lunches to a family’s home for a fee. Alternate revenue sources can give you the boost you need.
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The Silver Lining to the Financial Shake-Up
Fighting for sustainability leads to a myriad of benefits and positive outcomes for schools. Here are a few things that may result from your battle for sustainability post-COVID-19:
Benefits of the financial shake-up:
- Better decision-making process across your office and different departments
- More creative use of technology
- Improved collaboration with other offices
- New revenue streams: online courses, expanded market, etc.
- Chance to create better efficiency and a seamless tuition experience for families
- Better evaluations of expenses and resource allocation
- Allows the business office to engage with families in a more personal way; transitioning from merely a transactional relationship to a more family-centered one benefitting overall retention efforts
- Opportunity to try new initiatives
- Data-informed decisions will drive budget choices
- Re-evaluating what is (or isn’t) needed in this new environment creates a willingness to try new and different things that may not have seemed mission-critical in the past
- Leadership may be more open to making bigger changes- like implementing a net tuition revenue strategy or new technology
Financial Sustainability is Critical for Success
Financial sustainability is critical for the long-term success of your school. Making concerted efforts to move toward a budget that can be maintained in years to come will help ensure your school, your office, and your families thrive. And you may just find a couple of new tools, strategies, or relationships along the way that will transform your school for the better.
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