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New Business Models for Independent Schools

New Business Models for Independent Schools. Marc Frankel, Ph.D. – Senior Consultant, Triangle Associates (MO) Cynthia Berkshire – Trustee, Wildwood School (CA) Charles Clark, Ed.D . - Headmaster Emeritus, St. Edward’s School (FL)

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New Business Models for Independent Schools

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  1. New Business Models forIndependent Schools Marc Frankel, Ph.D. – Senior Consultant, Triangle Associates (MO) Cynthia Berkshire – Trustee, Wildwood School (CA) Charles Clark, Ed.D. - Headmaster Emeritus, St. Edward’s School (FL) Kevin J. Ruth, Ph.D. – President, Endowment Strategies, Inc. (DE)

  2. For More Information Click on “NAIS 2010 – Three Conceptual Models” OR Click on “NAIS 2010 Intro Presentation” www.ta-stl.com/Resources.html Contact Information Marc Frankel……………………………………marc@ta-stl.com Cynthia Berkshire…………………………..berkcr@aol.com Charles Clark…………………………………..clarkcf47@gmail.com Kevin Ruth…………………………kruth@endowmentstrategies.com

  3. Independent School Business Model Mission and Values Activities, services, programs Valued Outcomes

  4. Pressures on Our Business Model(1) • Reliance on ever-increasing tuition to support programmatic additions, competitive salaries, and small class sizes • Competition from low- and no-cost providers • Less successful fundraising and lower investment returns • Tuition increases softening demand in a stagnant economy

  5. Pressures on Our Business Model(2) Reduction in funding to schools Religious “inner soul” search and revival “Media on steroids” hyping abundance of problems facing us

  6. The Next Five Years Nominal investment returns Challenging endowment giving Interest rates artificially low; predicted to rise Stricter selection policies enacted to regulate capital and tax-exempt bond financing

  7. Is It Time to Change the Model? Consider How You “Do School” New delivery strategies New technologies New teaching strategies New focus on differentiated ratios for costing out school operations

  8. An Unchanging Formula Xt + Ys + Classroom = School

  9. How Do We Exit Baumol’s “Cost Disease” Model?

  10. Analogy: Hotel Industry

  11. From Here to There Schools need to change something fundamental within the business model… How we operate it

  12. Our Business is Changing

  13. Higher Ed Growth in Enrollment

  14. Growth in Enrollment by School

  15. What Does It Mean? • Concept of location (physical locale) • Concept of time (school day, etc.) • Concept of school community • Where efficiencies can be gained • What to start / what to end • Sources of programmatic innovation • Various pricing models • Differentiated product delivery streams • Teacher productivity

  16. Three Questions for Leaders • How do we keep the independent school “model” in the face of differentiated competitors? • How might we refine (or re-define) our value proposition? • How do we decide what is a mission-congruent way of changing how we do school?

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