Here’s an excerpt from our Exclusive Members-Only webinar on How to Make Budget Cuts with Greg Marsello.
The COVID-19 pandemic is causing lifelong learning programs to revamp their finances and budgets both for the short and long-term. With no date insight for a return to normalcy, lifelong learning programs are being advised to plan for the pandemic to have ripple effects for potentially up to 18 months.
Programs are having to look at cost cuts as they adjust existing budgets and build new budgets. LERN recommends considering seven types of cost reduction: automation, productivity, efficiency, outsourcing, waste reduction, quality control, and reliability.
The following are some specific budget actions to consider:
#1. Tell Your Story. Your program is mission critical and the services provided and important. Remind central administration of the negative impact of short-term budget cuts with long-term implications.
#2. Build Three Budgets. Starting with income and ending with administration build worst-case, better-case, and worst-case scenario budgets.
#3. Targeted Cuts. Do not make across the board cuts. Cut what is not working, whether it is programming, promotions, processes, instructors, or staff.
#4. Don’t Cut, Reallocate Promotion. This is not a time to cut promotion costs unless they are underperforming. Shift promotion monies to successful promotion methods.
#5. Cut Production Costs. Focus on increasing your operating margin. Negotiate with instructors. Get a better percentage from online vendors. Reduce handouts and food. Increase prices for your winners.
#6. Non-Staff Administration Costs. Negotiate with vendors, such as software providers. Reduce credit card percentages. Cut unneeded expenses. Shift your staff’s mindset and pick a number to save.
#7. Staffing. Do not fill vacant positions unless they will generate revenue. Reduce hours. Reallocate staff to supporting revenue generation. Outsource what can be better done by a vendor.
#8. Centralize Operations Tasks. Everyone cannot do everything if you want to generate revenue.
#9. Have Technology Do It. Your online registration at the least should be 50 percent or more. Generate data-driven reports, so you can make smart decisions. Integrate your marketing efforts. Shift to online learning. Reduce meetings with communication tools.
#10. Other. Barter for services with instructors and vendors. Partner for marketing and consolidated services. Support telecommuting.
#11. Watch Your Numbers. Make sure your promotions are working. Keep an eye on operating margins by divisions or deeper. Hit the non-staff administration trimming number. Increase the time staff spend on revenue generation. Use reserves if available, and manage cash.
We are in unprecedented times. Do not make short-term decisions that will not let you rebound in the long-term.
Here’s an excerpt from our Exclusive Members-Only webinar on How to Make Budget Cuts with Greg Marsello.
The COVID-19 pandemic is causing lifelong learning programs to revamp their finances and budgets both for the short and long-term. With no date insight for a return to normalcy, lifelong learning programs are being advised to plan for the pandemic to have ripple effects for potentially up to 18 months.
Programs are having to look at cost cuts as they adjust existing budgets and build new budgets. LERN recommends considering seven types of cost reduction: automation, productivity, efficiency, outsourcing, waste reduction, quality control, and reliability.
The following are some specific budget actions to consider:
#1. Tell Your Story. Your program is mission critical and the services provided and important. Remind central administration of the negative impact of short-term budget cuts with long-term implications.
#2. Build Three Budgets. Starting with income and ending with administration build worst-case, better-case, and worst-case scenario budgets.
#3. Targeted Cuts. Do not make across the board cuts. Cut what is not working, whether it is programming, promotions, processes, instructors, or staff.
#4. Don’t Cut, Reallocate Promotion. This is not a time to cut promotion costs unless they are underperforming. Shift promotion monies to successful promotion methods.
#5. Cut Production Costs. Focus on increasing your operating margin. Negotiate with instructors. Get a better percentage from online vendors. Reduce handouts and food. Increase prices for your winners.
#6. Non-Staff Administration Costs. Negotiate with vendors, such as software providers. Reduce credit card percentages. Cut unneeded expenses. Shift your staff’s mindset and pick a number to save.
#7. Staffing. Do not fill vacant positions unless they will generate revenue. Reduce hours. Reallocate staff to supporting revenue generation. Outsource what can be better done by a vendor.
#8. Centralize Operations Tasks. Everyone cannot do everything if you want to generate revenue.
#9. Have Technology Do It. Your online registration at the least should be 50 percent or more. Generate data-driven reports, so you can make smart decisions. Integrate your marketing efforts. Shift to online learning. Reduce meetings with communication tools.
#10. Other. Barter for services with instructors and vendors. Partner for marketing and consolidated services. Support telecommuting.
#11. Watch Your Numbers. Make sure your promotions are working. Keep an eye on operating margins by divisions or deeper. Hit the non-staff administration trimming number. Increase the time staff spend on revenue generation. Use reserves if available, and manage cash.
We are in unprecedented times. Do not make short-term decisions that will not let you rebound in the long-term.