The Critical First Step in School Business Model Innovation

by Peter Baron

Sometimes, the simplest questions provoke the deepest insights. 

During a webinar I led last week for SPARC, a tremendous organization making auxiliary programs a strategic component of the overall school mission, I was asked about the possibility of freezing tuition in certain grades.

This question highlighted the community’s concerns and steered our discussion towards a pivotal theme in business model transformation: optimizing current revenue and expenses before considering more extensive changes.

Optimizing from Within

In my experience, gathered from over 100 conversations with educational leaders, successful transformations often begin not with dramatic shifts, but with a thorough internal review.

This review focuses on making the most of existing resources, as demonstrated by schools like Indian Creek, which has effectively turned deficits into surpluses by controlling spending and discovering unexploited revenue streams.

Amy Jolly’s work as Head of School at Applewild School exemplifies this approach beautifully.

She began by optimizing revenue and expenses in detail, setting a solid foundation that later supported the school’s successful expansion of its boarding capacity and doubling of its revenue.

The Benefits of Optimization

This strategic focus on optimization stabilizes the organization and cultivates a culture receptive to change. 

Incremental adjustments clear the path for tackling more substantial challenges and empower schools to seize greater opportunities as they arise in the future.

What’s your take on the initial steps to iterating the business model? Send me a note with your ideas; I’d love to hear from you!

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