Penny wise, pound foolish
There are overlooked issues whether investing £3, £5, £7, £10 or even £20 million on a new schools sports centre. Ian Humble reports
Schools readily commit to multimillion capital investments in sports centres, investing time and effort into the design and project management to complete the building. Few schools consider in sufficient detail the ongoing operating costs a centre will incur or the income it can generate. Generic expense budgets are balanced with unfounded over-optimistic income forecasts.
Simple solutions to double additional income
Many schools are content with the level of income they receive. Having completed more than 50 revenue reviews, Ian Humble has only encountered two schools that were achieving their potential, with another two achieving 60-70 per cent of their potential. Most schools generate under 50 per cent of what is achievable. Here he reports
Few schools consider the true value of their assets. Overlooking the value to the end user/hiring organisation.
Trading companies: managing expectations
Trading is an integral part of schools’ need to manage the business professionally and to exceed expectations. Invest in understanding how to trade, writes Ian Humble
Trading companies’ budgets are rarely scientific or accurate. Mirroring schools’ cost-driven formula, they overlook commercial trends and economic factors which limits the investment, training and marketing required to increase income.
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Managing hirers’ expectations
Schools don’t understand business cycles and potential hirers’ requirements, says Ian Humble
Under increasing pressure to generate income from non-core activity, schools are increasingly exploring their commercial opportunities. Without reference to the longevity of the business, research and without any investment, schools risk falling head-long into what are often too ambitious business plans, and making too many assumptions about what they think is commercial and what the market wants. Identifying opportunities and realising income are completely different matters.
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Follow the money
Could your school make money from its resources? Katie Cardona explains how to carry out an enterprise audit
“Sweating the assets” is a phrase often heard emanating from the bursar’s office and is echoed by heads and governors as it floats down the corridors of schools. In these difficult economic times, schools are reviewing the different ways in which they can create another stream of income. Renting out facilities, setting up a school retail unit and running courses are just a few of the ways in which this is being done.
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Setting realistic objectives for income generation
Ian Humble debunks a few myths about what can and can't be achieved when aiming to boost income
A bursar recently asked me how much income his school could generate. A typical conversation ensued as he told me that, following a recent governors’ meeting, he has been tasked to review trading income. “A governor had spoken to another school which outlined how much they are earning.”
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How would you spend £0.5 million?
Ian Humble reports on how to generate more income for your school
In 2004, a school commissioned a holistic review, which showed that the school could potentially increase its commercial turnover from its static £150,000 to £750,000 over time, without encroaching on the school’s time.
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Exploiting school assets
What sort of person would fit the role of commercial manager and how can you overcome some of the pitfalls he or she is likely to meet? By Nick Durkin
The level of appointment will depend on a review of the school’s letting potential and whether or not the person appointed will control the sports centre and retail outlets – clothes shop, sports shop, and bookshop. Such a review is best undertaken by outside professionals who come with a fresh pair of eyes to explore the commercial opportunities. They can make an objective assessment of the school’s income potential in all areas and suggest annual attainment targets. It is important that the subsequent business plan is endorsed by the governors and the school’s senior management.
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