Fall Planning - Let's Get Budgeted!!
As the new school year is beginning, it is a great time (amongst all the craziness!) to make a business plan for the coming year. With no plan in place, life tends to take you where it will instead of consciously investing in the future health of your company. Also, remember that budgeting and being financially healthy are not in conflict with providing excellent education to children but are necessary in providing resources to continue to do awesome things. Planning and budgeting don’t have to be an overwhelming task if you follow a few simple steps.
- Start with the prior year financial results (2016 financial statement or tax return is fine) and compare yourself with the financially healthy school (Hinge has a model and can help!). Note revenue and expense items that are outside the industry norm and be sure that you understand why. There are uniquenesses to every school of course and that is OK, but understanding such items as there is not enough resource because tuition rates are lower than the service you are providing, or you are discounting too many families, or there is waste in a certain expense area, are easy opportunities to becoming financially stronger. (See Hinge articles on Tuition Rate Setting and Discounting Policies.)
- Include key personnel in your decision-making to gain multiple opinions of the school’s needs and possibilities as well as in gaining buy-in from staff. This process can be a simple brain-storming session during a staff meeting or can be its own quick idea-generating session.
- Always have a revenue goal whether it is in raising tuition rates (remember it is fine to grandfather current families and increase on new families if you have the demand), increasing other charges such as registration fees, or decreasing or eliminating certain discounts. In addition, new energy in marketing by investing in your website, social media, branding, or in new technology such as a CRM system or parent communication system is great in attracting new families.
- Always have an expense containment goal as there is always the ability to tighten expenses in some area. Are you wasting man hours that could be spent in hourly raises? Are you putting too much food on plates that is going in the trash? Are teachers propping doors open with the heat on?
- Always have a goal to Invest in your people in ways that support their ability to perform their job or improve their quality of life. Some ideas are to pay for continuing education, start a birthday club or recognition system, or give them professional company logoed shirts.
Remember that each goal set must be specific and measurable (you can mark it off a list when it’s done), has a deadline, and a person that is responsible for getting it done. Also review the goals at every staff meeting and have responsible people report on the progress for accountability. The biggest mistake owners make is in investing in a budget and plan is forgetting that they have a plan!! Please consider Hinge a resource as you develop you budget and plan. We are happy to help!! Feel free to reach a member of our Hinge team at email@example.com