Copyright © 2014 Charter School Capital, Inc.
Charter School Growth
Strategies
National Charter Schools Conference
July 1, 2014
WHO WE ARE
• Caprice Young, President, Education Growth Group
• Marshall Emerson, Co-Founder and CEO, I CAN Schools
• Dante Simi, CEO and Founder, Learn4Life Concept Charter Schools
• Stuart Ellis, President & CEO, Charter School Capital
Panelists
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WHAT WE’LL COVER
• Charter school growth stages • Challenges school operators face at each stage • Best practices and takeaways
Agenda
Presentation is available to download at www.slideshare.net/CharterSchoolCapital
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Stages of Growth
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STAGES OF GROWTH
# of Students
Start-up Survival/Establish
Growth Flexibility/Stability
Sustainable Maturity Efficiency
Time (years)
0 2-3 5-10
100%
Students as a % of mature targets
10-25% 25-90% 90-100%
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CHALLENGES
Reasons for charter school closures
42%
24%
19%
6% 5% 4%
Financial Mismanagement Academic Authorizer Obstacles Facilities Other
Source: The State of Charter Schools, The Center For Education Reform, December 2011
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STAGES OF GROWTH
Strategic approach
Start-up Growth Sustainability Financing
Facilities
Community involvement Academic accountability Operational support
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STAGES OF GROWTH
Strategic approach
Start-up Growth Sustainability Financing Any liquidity
Facilities In target locale
Community involvement
Awareness
Academic accountability
Establish program
Operational support Outside experts
STAGES OF GROWTH
Strategic approach
Start-up Growth Sustainability Financing Any liquidity Flexibility/
scalability Facilities In target locale Modular
Community involvement
Awareness Fulfill the promise
Academic accountability
Establish program Measure program
Operational support Outside experts Transitional resources
10 Copyright © 2014 Charter School Capital, Inc.
STAGES OF GROWTH
Strategic approach
Start-up Growth Sustainability Financing Any liquidity Flexibility/
scalability Cost
Facilities In target locale
Modular Curb appeal/cost
Community involvement
Awareness Fulfill the promise Fabric of community
Academic accountability
Establish program Measure program Continuous improvement
Operational support Outside experts Transitional resources
In-house team
11 Copyright © 2014 Charter School Capital, Inc.
STAGES OF GROWTH
Strategic approach
Start-up Growth Sustainability Financing Any liquidity Flexibility/
scalability Cost
Facilities In target locale
Modular Curb appeal/cost
Community involvement
Awareness Fulfill the promise Fabric of community
Academic accountability
Establish program Measure program Continuous improvement
Operational support Outside experts Transitional resources
In-house team
12 Copyright © 2014 Charter School Capital, Inc.
STAGES OF GROWTH
• Different structures of working capital – Receivable sale – Term loan – Line of credit
• Facilities financing options – Lease option – Bond – Traditional bank loan
• Regarding costs of funds, all costs are NOT created equal – Evaluate total $ cost rather than % rate – Consider fixed transactional costs and penalties, in addition to annual rate
related to costs
Finance considerations
Copyright © 2014 Charter School Capital, Inc.
The Start-up Phase
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STAGES OF GROWTH
Start-up
Common Misperceptions Founding team to “create” best practices “If you build it, they will come.”
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STAGES OF GROWTH
Start-up
Marshall speak to this series of slides
The Challenges Finding good leadership and teachers Securing resources Finding suitable facilities Healthy enrollment Sustaining high performance as network expands
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STAGES OF GROWTH
Start-up
Best Practices Study and meet with schools doing things well Don’t be a master of everything. Master a few things and do them really well Build genuine and robust relationship with teachers, leaders, vendors, and external constituents Pay close attention to the budget Pay even closer attention to student progress data Do not waiver in your belief or mission
Copyright © 2014 Charter School Capital, Inc.
The Growth Phase
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STAGES OF GROWTH
Growth
Common Misperceptions “After the 3rd year, all will be in place and it’s smooth sailing!” Performance and accountability requirements will be stagnant Done with professional development No need to change routines or systems We’ll have sufficient funds from operating revenue to support expansion Facility upgrades will be minimal, if at all
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STAGES OF GROWTH
Growth Challenges
Maintaining high expectations and being flexible
Advancing levels of student performance
Managing growth with limited resources
Upgrading systems to support growth
Retaining quality teachers and leaders
Matching capital to operational needs
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STAGES OF GROWTH
Growth
Best Practices Continuous professional development and leadership training Build on the culture Focus on individualized instruction and data analysis Increase visibility in the movement
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The Sustainable Maturity Phase
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STAGES OF GROWTH
Sustainable maturity
Common Misperceptions
The snowball effect Time to cash in Challenges decrease as you scale
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STAGES OF GROWTH
Sustainable maturity
The Challenges
Developing and executing a development plan Right team to implement strategic vision and plan Reevaluate financing to match your needs
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STAGES OF GROWTH
Sustainable maturity
Best Practices
Define your objectives clearly and communicate them extensively both internally and externally
Develop data-driven culture and make sure you retain the passion that got you started
Copyright © 2014 Charter School Capital, Inc.
Recap
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STAGES OF GROWTH
Recap
Start-up Growth Sustainability Financing Any liquidity Flexibility/
scalability Cost
Facilities In target locale Modular Curb appeal/cost Community involvement
Awareness Fulfill the promise
Fabric of community
Academic accountability
Establish program
Measure program
Continuous improvement
Operational support Outside experts Transitional resources
In-house team
27 Copyright © 2014 Charter School Capital, Inc.
STAGES OF GROWTH
• Stages in charter school lifecycle present very different challenges
• Strategy and focus needs to vary significantly as you grow
• Leverage experts at every stage to allow you to focus on educating kids
• Financial analysis illuminates positive potential impact of growth and scale
Key takeaways
Copyright © 2014 Charter School Capital, Inc.
Thanks. Questions? Want to download the slides?
slideshare.net/CharterSchoolCapital
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Stuart Ellis 877-272-1001 [email protected]