Show me the money!

moneyMost continuing education units are feeling the pressure of making money. The surplus generated is either used to support their institution’s shortfalls or with the more forward thinking institutions, to fund the growth of continuing education.

Continuing education is not a cash cow. Normally after deducting direct (promotion plus production) and administration costs, the most successful continuing education units generate a 0-10% surplus. The more proactive continuing education units are reducing their production costs as a percentage, thus increasing their surplus. There are continuing education units reporting higher surpluses, but most of those a) have certain costs covered by non-continuing education unit budget lines and/or b) have funding they count as revenue.

Each year the amount of funding – institution, state, province, federal, and so on – available is being reduced. So continuing education units need to focus on revenue generation, cost management, and good decision making in order to generate a surplus. A few key actions used by successful surplus-generating continuing education units include:

  • Pricing so production costs do not exceed 50% of the revenue generated.
  • Centralizing operations so revenue generators can focus on revenue generation.
  • Focusing on higher-dollar programming, such as targeted certificate programs.
  • Doing a better job of negotiating with instructors, vendors, and third party providers.
  • Increasing the amount of online programming, thus production costs for space, instructor travel, and so on.
  • Having a software system, like Lumens, that works for and not against them.

The pressure to make money will only increase and continuing education units must accept the need to be bottom-line oriented.