You Can't Always Get What You Want

The line from the Rolling Stones provides this week's "Marketing Matters."  Not so much for your school, but for your prospective parents.  In other words, create demand for your services.

If we're struggling to fill every desk, parents realize this.  Parents know there is room for their child, so there is no hurry to fill out financial aid forms, re-enroll their children, etc.  They know there will "ALWAYS" be room for their child, because their child is "their child."

Until a school says (or better yet, a parent says), "They're wait-listed."  All of a sudden, the landscape changes.  Why?  Because people want what they can't have. 

A waiting list just for one grade creates a demand for the other grades.  The key is knowing when it's financially prudent to open another class.

For instance, if a class has 20 students paying an average of $2000 each, the net income from that class is $40,000.  Hiring a teacher at $30,000 generates $10,000 profit.  (Yes - you need to think like a business.  If you're not doing it, get started.  Remember - schools rarely close for having poor curriculum or non-caring communities.  If it's "a business decision" that closes the school, start looking at the "business" reasons that keeps a school open.).

If 6 more students come into the class, and another teacher is hired to make 13 students in each class, the school will have $26,000 of income per classroom.  If both teachers are paid $30,000, a net LOSS of $8,000 is the consequence.  Yes, you've increased enrollment (one step forward), but you're further "in the hole" (two steps back).  If 10 more students are in a classroom before a new teacher is hired, 30 children are in the class.  Hiring another teacher makes you "break even" for that grade.

Therefore, in the example, if you set a maximum class size at 20, only when there are more than 10 additional children on the waiting list should another teacher be hired and another classroom opened for a positive cash flow.

 © Michael V. Ziemski, SchoolAdvancement, 2005-2010 (Original Publication Date: 20050620)