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How To Run Schools Profitably - Education - Nairaland

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How To Run Schools Profitably by JoelNkantaBlog: 6:38pm On Jul 20, 2016
Mr. Uyi Akpata, Country Senior Partner, Nigeria and Regional Senior Partner for PricewaterhouseCoopers (PwC), West Market Area (the multinational accountancy and professional services firm headquartered in United Kingdom but said to be the 6th-largest privately owned organisation in the United States), hit the nail on the head, when he observed, in a keynote address delivered, on his behalf, by a partner, Mrs. Wunmi Adetokunbo-Ajayi, at the 2nd Annual Blossom Career and Entrepreneurship Summit convened by Best of the World Enterprises Limited (publishers of Blossom magazine), at Ikeja, Lagos, that “the changing dynamics in global economic climate has engulfed the Nigerian economy and put pressure on businesses. As the government grapples with how best to bring stability to the system, businesses including privately-owned schools continue daily on the struggle for survival.”
Some private school proprietors interviewed by The Sun Education totally agree with his observations. “For me, personally, I can say it (the economic downturn) is the ebola of our time in the sense that its effect on us has been quite astronomical,” Rev. Cannon Peter Bamidele, Principal, Pentecost College, Victory Estate, Iba, Lagos, laments. The school set up, about 15 years ago, for the Anglican Communion, by the Church of Pentecost, Festac Town is passing through hard times, he says. “We’ve been supplementing our budget to the tune of 250 per cent. For instance, we have in our budget, a basket of tomato for N7, 500. But the last one we bought was for N55, 000. That’s why I call the present economic hardship the ebola of our time.”
Not to talk of its effect on students enrolment. “Compared to this time, last year, we had over 100 enrolment though not all of them were offered admission. On our common entrance day, we usually have more than 150 candidates but in the last one, they were about sixty. People are still making enquiries trying to know whether our admission is still on and we would say come over, it still on. The same ebola virus is affecting the students. Talking about prompt payment of school fees, last year, we attained about 94 per cent compliance. But as the school prepares to vacate the second term holiday, their performance is about 80, if not 75 per cent. From the record from the bursary, we are battling between 75 and 80 per cent.”
“The enrollment of students has actually dropped,” Mr. Bode Lawal, proprietor of Helix Schools, Igando, Lagos, agrees. “For instance, parents who come in to make enquiries now react sharply to the school bill, and some do not bother to check back while others seek for discount. There has been noticeable delay in the payment of school fees putting management in tight corner. It has actually slowed down development for now. Among the measures put in place, now we have to relax payment deadline in order not to provoke parents from withdrawing their wards from school. Some are eventually able to meet up. But there are those, however, who have not yet completed payment even though examinations have started. We’ve had to reduce expenses.”
“The economic situation has reduced the number of enrollment as some students have withdrawn to public schools,” Mr. Hezekiah Olayode of De Ohms International School, Egan, Lagos, reports. “It has prevented us from increasing the salary of the teachers which they honestly deserve although we are able to pay their salaries. Payment of school fees has not been regular as the number of debtors is increasing. Prices of necessary amenities have increased and have affected the provision of such amenities. There has also been reduction in personal spending.”
It is in the light of these facts that the schools are calling for a downward review of taxes and levies being imposed on private schools by government and its agencies. “To me, private schools are being over-taxed,” Rev. Bamidele moaned. “You have to register; you have pay this and that levy. At the end of the day, go to public schools, they are not aware of such. But if at the end of it, we are getting what we should get from the government, good road, constant supply of electricity power and water, I don’t mind. They say we are being taxed based on our school population, but go to public schools and look at their population and come to this place and look at our population and compare. Their population is supposed to be more and yet we are paying more. That is to say, we are paying the unpaid bills of the government. But that is the type of country we happen to find ourselves. So? What can we do?”
“We’ve had numerous visits from local government officials demanding for certain questionable taxes which are burdensome to the system,” Lawal said. “Imagine, for instance, some coming in to ask the school for radio/TV tax. They also ask you to pay certain taxes that have already been paid to the state government. This is a case of double taxation.” “The government should reduce taxation,” Mr. Olayode pleads.
But in that keynote address presented on the second day of the summit and titled: “Curriculum Reform: Why the private sector should be interested,” Mrs. Adetokunbo-Ajayi listed, in the fifth part of the paper sub-titled: “Running Schools Profitably In the Face of Economic Challenges,” some measures private school owners can take to stay afloat in the daily struggle for survival. These she later elaborated on, in a chat with The Sun Education.
Proprietors and school managers must get smart and innovative: Look at cheaper way of achieving the same goal. For instance, if people can’t pay because you are asking for a lump-some, you can opt for payment by installments. Come up with creative ways of collecting your money.
Refinance or restructure existing debt: Some start a school and they expect that in the first three or four years they will start making profits. Because of all those challenges they have they go out to get loans from banks and those loans are getting difficult to pay because they have to service the loans and also pay them back. So come up with a plan and renegotiate your loan like any other business. In this day and age, what works is partnership. Look for somebody who has the same value, the same mindset and with whom you can share some of the deficits so that it can reduce the loan. If you can, lease out some of the assets you have or borrow in the meantime.
Plan all expenses properly. Develop a budget: People run businesses and there’s no difference between the business and themselves. They want to do some personal expenses; they put their hands in the school till because the school is not different from them. So? Place yourself on a salary; be an employee of the school. Collect your salary and then spend it the way you want. At the end of the year, if there are profits, then you can get dividends. Don’t run your life on the school money. Treat the school as a different legal entity. Have a budget and monitor it.
Consider the future working capital of the school. Are current sources of cash sufficient? Be realistic; if you have parents who pay on monthly basis, then you don’t have to assume that you will get all your cash in Month 1. Plan your cash flow. Don’t just wake up and say you can’t pay salary; meanwhile you’ve gone to buy one huge screen that could have been postponed. Know when you need cash so that you can know whether the money you are expecting for that period will be enough for you to meet your working capital needs. Stretch the expenses to take out the ones that are not important.
Ensure you are in good standing with the government, viz, taxes licences, permits, etc: In these days, when government agencies are looking for extra money, you don’t want them to come and stop your school from operating. If government is harassing you, it can deter some categories of people from bringing their children to your school. So, determine from the onset how much you need to pay and set money aside for that. You don’t have to pay everything at once but you don’t have to wait until someone comes up tomorrow to say you owe for five years. They can take you out of business. So? Plan your expenses. Have a payment plan for ones that are critical.
Cut costs to the minimum efficient level. Reduce expense without impacting quality: Cut your costs without affecting the quality of people who deliver your products, in this case, your teachers. If parents are complaining about the quality of your teachers you can retrain them without increasing your cost by having experts in various subjects on offer by your school teach other less-knowledgeable teachers. Deliberately gather them and have the subject specialist, say, in English or Mathematics, teach others handling the same subjects in other classes. The fact that you can’t send them abroad for further studies doesn’t mean you can’t give them continuous education. Gather them in a class and let somebody from their own midst teach them. Do it once a month; let school close early. During that time you can serve them soft drinks and have fun.
Never compromise on (Click on the link below to read more)
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