NCCET July Webinar - CE Entrepreneurship – Walk the Talk

CE EntrepreneurshipWalk the Talk!

Presented by

Patty W. Pool, MBA, PhD

Grayson County CollegeDenison, Texas

Today’s Program

• Entrepreneurship –– What is it? – How risk tolerant is your college?

• Can You Walk the Talk? – Techniques that move your

division forward

Today’s Program

• Learn to Think Like a For-profit– A pricing model that works

• Ideas to Bank On!– Transform your strategies to focus

on revenue instead of expenses

An entrepreneur is….

one who starts a business or other venture

that promises economic gain, but also entails risks.

(American Heritage New Dictionary of Cultural Literacy, Third Edition, 2005)

Entrepreneurship inContinuing Education

The practice of undertaking new ventures, ideas, services, promotions and/or practices that promise economic gain for the college based upon an acceptable risk tolerance.

Patty Pool, 2011

SURVEY QUESTION

What is the level of risk tolerance at your college?

a. High – We have a very entrepreneurial culture that encourages risk taking.

b. Moderate – We actively seek new ventures with moderate risk.

c. Low – Only the sure-thing is tolerated.d. No tolerance – We focus primarily on

reducing costs at all cost.

Risk in Entrepreneurship Requires Administrative Support

3 Ways to Assure Administrative Support1. Know more about your

business than anyone else at your college

2. Make informed projections3. Be accountable

Accountability = Credibility

Know more about your business than anyone else at your college!

• Know your state guidelinesTake time to learnBe able to answer the question, “Can we do that?”

• College budgets are about expenses • Build your foundation on revenues

Learn to use the college ERP

Make informed projections• Know who you are dealing with• Tell the story of how the new

venture fits the college mission• Be able to satisfy the analytics

– Show revenue versus expenses– Demonstrate improved cash flow– Give Go/No Go scenarios

Accountability = Credibility• Work from an enterprise resource

planning (ERP) perspective• Keep track of RESULTS

SURVEY QUESTION

How is CE organized at your college?a. Clear lines between open

enrollment (scheduled classes), community ed, and corporate/business training.

b. Depends on who is paying—private pay or grant-funded.

c. Small staff doing it all!d. Other

Organize to Maximize Talent

Do you have the right people on the bus and in the right seat?

Jim Collins, Good to Great

Deliver Solutions

–Open Enrollment – Scheduled Classes

–Customized Training

SURVEY QUESTION

How do you price courses and class offerings? a. We use a fixed hourly rate similar to

the credit programs. (May or may not add fees)

b. We use a formula that covers expenses.

c. We cover expenses and include a markup.

d. Other method

What is a Price?

Bundle of Attributes

Training and Education = Services• Tangible Attributes

– Workbooks, textbooks, handouts– Binders, jump drives, tools

• Intangible Attributes– Experienced instructors– License required for curriculum,

equipment– Web access to your division

What is Price to CE?

Price of the Class = RevenueCosts Associated = Expenses

Price – Expenses = Contribution to Overhead

Pricing Considerations

• Breakeven Pricing• Competition• Markup for Retail • Bundle Pricing

The Pro Shop Model and Continuing Education Budget

Increase sales and expenses increase

Do you stop selling when your budget is at zero?

Do you close the pro shop?

Worksheet-Expenses & Variables

Assumptions:  No. of Different Modules

1

Hours per Module 4

No. of deliveries 2

Course Contact Hrs 4

Number of Trainees 15

Instructor Rate/Hour $45

Textbook Cost Each $0

Workbook Cost Each $15

College Enrollment CE Transcript y

DirectExpenseCalculations

Direct Expense Calculations:

Generational Dynamics

Course Materials 200

Supplies Provided 100Instructor RateIncld fringe 7.65% 388Course Customization 500Workbook Total Cost 225

Textbook Total Cost 0

Equipment 0

Total $1,413

Price

Price to Client $2,350

Direct Cost $1,413Contribution to Overhead (CTO) $937

selected expenses X predetermined markup

This example illustrates a 65% markup on expenses.

Price &Check PointRatios

Price to Client $2,350

Direct Cost $1,413Contribution to Overhead (CTO) $937

Ratios

ROI =net benefits/costs 66%

Gross Margin =CTO/Price 40%

Caution! Use micro-analysis sparingly

Look at your offerings as a group rather than “by the each.”

Potential to grow?Potential to feed into other

programs?

The Worksheet Will Work for You!

Track your business:Sales RevenueExpenses by CategoryContributions to OverheadState Funding/Reimbursement Contributions

Calculate Financial RatiosOverall Return on InvestmentGross Margin Percentage

Ideas to Build On!• Certifications

– Healthcare professions– Technical Needs– Local needs

• Renewable Professional CE Credits• Partnerships with for-profits—split

tuition• Host conferences & events

Entrepreneurship Starts with YOU!

Understand the level of risk tolerance at your college

Become the expert on CEUse a pricing model that sustains

growthBuild partnerships everywhere

Questions? Other ideas?

Dr. Patty Poolppool@cwlgcc.org

903-463-8765Visit http://cwlgcc.org