Is your school ready for the next recession?

I am not a prophet. I am not an economist. I don’t know what will happen in the future.

However, what I can see are the signs all around us. Rising Inflation. Skyrocketing debt ceiling. Escalating housing values. Volatile stock market. Tensions around the world.

Is there another recession on the horizon?

In 2008, we were hit with a recession. We didn’t know it was coming. We weren’t prepared. Private schools lost students. Jobs were cut. Budgets were slashed. Financial aid soared to keep families enrolled. School leaders scrambled.

It was a challenging time to lead a private school.

Around this same time, I launched Enrollment Catalyst. School leaders wanted to implement strategies to enroll more students. This is also when Inbound marketing began to take off.

Times are good now for private and independent schools. Enrollment has surged. Schools have soared through the pandemic. Budgets are flush.

When times are good, we don’t think about what could happen. We don’t think about another recession. But we should.

And we need to be prepared.

Is your school prepared for another recession? Did you learn anything from the recession of 2008 that you need to do now?

Let me give you some advice to prepare your school to thrive during the next recession. Because, one day, it will come.

1—Set Aside Funds Now and Plan New Revenue Streams

As non-profits, our tendency is to spend the revenue we receive on expenses and new initiatives. While this is good, it is important to save money in a rainy-day fund (or a recession fund). Just as you are encouraged to save money personally, you need to save money in the bank for your school when bad times hit. These funds should be set aside as well as an endowment to protect the school for the future.

In addition, you should consider auxiliary programs that can help financially support your school. These revenue streams can provide additional funding to help your programs and could include a thrift store, rental of your facilities, solar power, and more.

Recently, Dr. Jason Tindol, answered this question about how he is preparing his school. “King’s Way Christian School (WA) is instituting a new financial revenue model to reduce dependency on tuition. The model includes alternative income through facilities rentals, innovative learning opportunities for students learning from home (non-King’s Way students), retail spaces, and an endowment with a portion of the funds invested in apartment complexes. In addition, our vision for upcoming capital campaigns includes facilities focused on the community after school hours, such as a Recreation Activities Center, Library Commons/Shops space, multi-purpose turf fields, possible International students dormitory, and a fine arts hall auditorium. The spaces will secure cash flow from contractual tenants. Many of these items are part of our Project 7:24 Vision for the next 50 years at King’s Way.”

More school leaders need the same vision that Jason has at King’s Way to prepare for what’s ahead.

2—Aggressively Market Your School

I have recently heard some school leaders ask if they should stop marketing since their enrollment is full. This is very short-sighted. While enrollment may be full today, this may change tomorrow. Marketing your school should be a priority in both good times and bad. When your enrollment is full, you want to sustain your position of strength in the marketplace. This is the time to sharpen your processes and implement new strategies so that you are prepared when the next recession hits. When this does happen, you won’t have to scramble. Your enrollment and marketing strategies will already be in place and this will allow you to thrive during challenging times.

3—Focus on a High Quality Educational Experience

Parents select a private school because they are drawn to the quality of your program and the value they will receive. Marketing can’t fix this, and a future recession will reveal inferior quality issues. Schools that are high quality will continue to thrive, even during a recession. As you work to continuously improve, your school will be in a better position to weather the storms ahead. Regardless of what is going on around you, it is critical for you to lead your school to community to continue focusing on a high quality educational experience.

4—Promote Affordability and Value

During a recession, affordability becomes a primary issue for families. This is the main reason why so many families pulled out from private schools during the last recession. Many schools had to stretch their financial aid budgets to help families continue to afford their school. This will happen again. It is critical to work on promoting affordability now and tying this to the value the parent will receive. Marketing affordability and promoting value are essential ingredients for your strategy. If you are interested in my previous webinar on “Marketing Affordability,” you can watch the on-demand recording.

There is much more that we should consider and I hope to continue the discussion in future blog posts.

It is important for your school to be prepared for the next recession. It will come. It might be this year, or next, or sometime in the next few years.

Will your school be ready? Will you take the steps necessary to prepare your school for the next recession?