This memo is to help you prepare for what some economists, as well as the NineShift historical parallel, say may be a soon-to-be coming 18 month recession, probably in 2019-2021.
This memo is not about predicting or guessing, but urging you to prepare whether it happens or not.
Preparing for the next recession should not cost you money, should not limit your current success, and should not mean prematurely making budget cuts. Preparation for a recession should
- a) position your programfor flexibility in responding to a downturn; and
- b) inform your institutionof how the marketplace functions and what you are doing until the recession is over.
Here are the top seven strategies for lifelong learning program leaders to prepare for a possible recession.
1.Ramp Up Institutional Communication NOW.
Before a recession is declared, before your leaders discuss budget cutbacks, NOW is the time to ramp up your communication with central administration leaders and decision makers about the value of your lifelong learning program.
Things to stress before the recession:
-Your centrality to the mission of your institution.
-Any and all financial benefits, direct and especially indirect (voter support, etc.) your lifelong learning program contributes to your institution.
-Any unique contribution your program makes that other parts of the institution cannot make for the overall good of the institution.
2.Start planning now.
Planning is almost never a waste of your time, even if those plans have to change. Two critical or essential aspects of planning for a recession are:
Do a short term plan.
Do a short term plan, like your one-year business plan. Then track with quarterly reviews and variance analysis to see both how well you are doing but also if you detect any trends or directions.
Prepare alternative budgets.
Using either the drop in registrations and income from the last recession, or 2-3 scenarios, one of which is “worst case scenario,” work off-line with just your trusted senior leaders to discuss various budgets given a recession.
Thirdly, consider the use of Advisory Councils to help plan. Even more importantly, if a recession hits one or more Advisory Councils can provide advocacy and support. This could also include getting local publicity.
3.Never worry staff.
Most staff will want reassurance, not dire warnings about tough times, from you. So except for your top trusted leaders, do not suggest the possibility of a downturn until it actually happens. And then, without any guarantees of course, reassure staff you are taking steps to protect your program and their jobs.
4.Where to Invest resources.
One of the things you can do now is to reflect on purchases and investments moving forward.
Continue to invest in technology. Technology will generate productivity from day one, during a recession, and after a recession. Having the best software, hardware, and algorithms will always pay off.
Invest in future staff leadersand income generating staff for whom you have long term plans for management and leadership positions.
If a recession looks more likely and within 12 months, look to hiring temporary workers and contract out for work unless that “best talent” appears.
Avoid investments, like building or space leases, that will damage your financial position with a decline in enrollments and usage.
5.If a recession hits, consider these strategies.
A.Cut the losers.
Emotionally as hard as it is, you have to do it early and fast.
B.Keep the print brochure.
Never ever (until LERN says so) give up your print brochure, which generates 70% of your registrations and income.
Instead, look to LERN advice on cutting pages from your brochure and (see below) trimming the number of copies, both – – if done right – – will save you money without killing your registrations and income.
C.Target brochure distribution.
Most programs can cut print brochure distribution by 10% to 20% without losing registrations and income in normal times. If you are in the U.S. make sure you get a carrier route analysis from LERN that will tell you where to cut, and where not to cut.
D.Increase prices.
Seminar guru Anver Suleiman taught us long ago that in a recession there are two kinds of buyers – – those who want your program, and those who need your program. You will lose those who want your program, but those needing your program are going to spend what it takes, So increase your prices.
- Push higher priced offerings
Take your currently most profitable offerings and push them more. Also highlight other high priced offerings that may have the best opportunity for registrations.D.Preserve your diversity in offerings.
You may have to cut back on certain kinds of offerings, but preserve your diversity in offerings. Many a program has lost its image, position and eventual income by cutting a category of programming and then discovering an inability to regain their position in that lost category later.
E.Explore Selective Contract Training and sales to companies.
Not every business or industry will be equally affected by a recession. Explore contract training and sales to companies less affected by a recession.
F.Summer Camps should be o.k.
The mantra in lifelong learning is that parents will spend money on their kids’ classes even through tough times.
- Seniors Might be OK
Today’s boomers and seniors, or age 50 and up, have more discretionary income than younger people. All those “senior discounts” you see are a hold over from decades ago when older adults indeed had less money than younger adults.
So raising prices on your classes for older adults is one strategy to consider.
H.Online likely to be a good bet.
Online classes, like LERN’s UGotClass, will likely be a good bet because:
Online means your participants don’t have to spend moneyon gas, lunches, babysitters, and time away from work.
Online fits any schedule,so if someone has a second job, needs to work overtime, has to travel on business, there is no lost time or income.
Your costs are lower. Our online certificates average $495, a good chunk. And aside from including them in your print brochure, you have no other cost. And you generate 50% of the revenue, even from one registration.
6.Somewhat Change your Strategy for Administration support.
When a recession hits, you change your communication strategy somewhat.
a.Cite business market cycles.
Lifelong learning programming is a business. Cite statistics about businesses losing money once every five or ten years, about marketplace conditions, about rebounds as well as downturns. Press your case that lifelong learning programming is financially different from other funded programs.
b.Report your 5 year and 10 year track record.
Central administrators will view your short term losses as somehow a trend line for the future. Show them your 5 year and 10 year track record, whichever one puts your program unit in the better light.
c.Listlong term institutional indirect financial contributions
Getting income from a macramé class is not your critical financial contribution to your institution. Generating voter support, contacts with business, community support, a possible donation from a wealthy patron – – those are some of the things only your program can do for your institution.
d.Use charts.
Pictures equal a thousand words, maybe more. Use charts and infograms to visually communicate your message.
e.Develop and execute a regular communication plan.
At least once a month, but perhaps more frequently, communicate with your administration on your successes, what businesses say, what your participants say, when you exceed a particular goal, when you get good publicity, and what you are doing to address shortfalls.
7.Stay positive.
Whether it is with your staff, or with your administration, you have to be thinking ahead of them, and you have to be speaking positively. Your personal attitude will be felt and adopted by those around you. Lifelong learning programs made it through the great recession. We can make it through another one.
LERN predicted the last great recession in an article published in The New York Times, January 6, 2006.