building revenue streams for educationusa advising centers an intensive one-day training part 2:...

Building revenue streams for EducationUSA Advising

Centers

An intensive one-day trainingPart 2: Services & Fees

written & presented byJayne Cravens, MScwww.coyotecommunications.com

Jayne Cravens, www.coyotecommunications.com Page 2 of 46January 24, 2010

Business planning

A business plan details what resources will be needed to undertake each activity (HR, finances, partnerships, equipment needed, etc.). It details what each activity costs and how it will be paid for.

Example: Car Mechanic

Today, we are going to learn to think like car mechanics. SUCCESSFUL car mechanics.

Successful Car Mechanic - Why?

Let's think about a car mechanic. She charges by the hour. She charges for all materials used. She can give you an estimate for how long a

job will take and when she can do that job.

What might a car mechanic give you for free?Why do you keep going back to your car

mechanic?

A Successful Car Mechanic Is...• Her prices are reasonable.• She helps you to understand what she will do.• She can give you an immediate, realistic

estimate for how long a job will take and when she can do that job.

• She does the job she says she will do, on time. • She exudes quality.

In short, her customers TRUST her, because of the above activities and approach.

A Successful Nonprofit Business• Its prices are reasonable.• Staff help funders and clients understand what

the organization will do.• Staff can give funders and clients an

immediate, realistic estimate for how long a job will take and when staff can do that job.

• Staff do the job they say they will do, on time. • The staff exude quality. In short, funders and clients can TRUST the

nonprofit and the staff.

Keys to success for any business

The keys to any successful business are:

• Budgeting and pricing appropriately, for today and a year from now

• A strong focus on customer service (consistent quality, quick response, no surprises, etc.)

• Lots of customers/funders

In any country, in any culture, this is always the same. The exception? When you have a really gullible/misguided/delusional funder or customer base – and these are not always easy to find.

Business Plans Make Life Easier

• A written business plan forces you to think about the keys to success (appropriate pricing and customers/clients/funders).

• It creates trust among potential customers/funders/investors.

• To create a business plan for an entire organization, or just one service your center provides, start with thinking about clients, customers and stakeholders. Their needs, and how you want to meet them, drive your business plan/business model.

Planning – GROUPWORK

Worksheet for Clients, Customers & Stakeholders. Use this just for your job, just

one service at your organization, etc.

For now, let's fill it out for the partnership services you provide USA universities in your

Worksheet 1

Break down an activity

Your center is going to host an education fair on September 8, 2011.

What has to happen for that fair to occur, and by when?

Use your calendars. GO BACKWARDS.

(groupwork - handout)

Backwards break down

• Write “Education Fair” on Sept. 8• When will announcement fliers be mailed?

Therefore, by what date will fliers need to be finished printing? Therefore, by what date will fliers need to be ready for printing/distribution?

• University participants needs (flight arrivals, hotel booking, flight reservations, approval from their universities, etc.)

• There are events that need to happen in Feb. for this Sept. event. What are they?

• What needs to happen AFTER the event?

Calendar exercise results

• What's hard about this activity?

• Ready to do it for every activity that has an “end” date? (classes, site visits, producing and sending a list of attendees, etc.)

• You can use GoogleCalendar. You can have different calendars for different events, and then bring them altogether on one calendar. You can share this calendar, or individual calendars, with the public, with just partners, which just staff.

GoogleCalendar Example

Identifying tasks identify costs

• You cannot identify costs unless you can identify tasks. It's the car mechanic model!

• That makes it easier to talk about costs with funders: “Here is how much money we need to do this job....”

Your Growing To Do List

•Doing a worksheet for Clients, Customers & Stakeholders for your job and each current or proposed service at your organization

•Doing a task calendar for every event/time-bound activity.

•Doing a GoogleCalendar

Break?

Consider: Nothing is Free

Nothing is free in terms of what you do as an EducationUSA center.

Look around the room

Everything in this room is costing someone something. What do I mean by that?

Discussion

Look around the room

Everything in this room is costing someone something:

Tables Lights Heat My time Your timeWhat if it all had a meter on it?

Why fees?

• Fees/revenue cover costs.

• Fees ALSO increase accountability to the people and organizations receiving services. The people paying you become your customers.

What does that second bullet mean?

Asking for fees

Where do you draw the line in pricing?

When does a car mechanic NOT charge you?

Myself as an example.

Asking for fees: Example

1 Your program partner calls and asks you to participate in an hour-long conference call to talk about the education fair in September.

2 Your program partner calls and asks you to participate in a two-hour-long conference call every Friday for the next four weeks to talk about new program they might want to introduce.

Asking people/orgs to pay

Once people/organizations are accustomed to receiving something for free, it is very difficult to get them to pay for it.

Fees and expectations

Clients who are asked to pay for something anticipate gaining significantly more from an organization than those who get the service for free.

Internal Investigation

You have to know your costs!

Identifying your services (1)

Over a period of a week or a month, each staff person at your organization should identify what percentage of his or her time is spent doing what, and in support what function of the organization.(Handout)

Identifying your services (2)

Your total for all activities has to be 100%

Every activity has to be tracked, even if it is grouped with other activities.

You cannot do this activity now. You cannot do this exercise in a day. You cannot do this exercise for

anyone but yourself.

Using this internal investigation

Identifying exactly what you do will show where you might consider charging (or charging more).

You are not looking to charge by the minute, like a German doctor. You are looking to charge for significant activities not covered by current grants, or to re-adjust grant proposal requests.

Break?

Determining fees

To determine an hourly rate:

• Calculate what your rate should be, based on your expenses (including staff salaries).

• Investigate the marketplace to see if you should adjust your rate up or down. Look for the very lowest rates and the very highest rates.

• Think carefully about what people will really pay.

Services for Universities

Handling logistics for visiting university reps Coordinating meetings for university reps with

Embassy staff and local schools/universities Translating documents Facilitating admission interviews on behalf of or

for a university Coordinating University fairs Follow-up activities regarding any of the above Others?

Determining fees (1)

To charge for these activities appropriately takes more than simply creating a percentage of a grant for "overhead."

You must know what tasks make up EACH service.

Determining fees (2)

• The first point of call when deciding on charges should always be how long it will take you to actually complete the overall job.

• “When a new job comes in I break it up into components and then estimate the time it will take to complete each one. I then multiply my hourly rate by that number of hours to get a costing for the job.” (you did this with the earlier calendar exercise).

• It gets easier.

Written agreements

Once you decide what you will charge, make sure you enter into a written agreement with every donor/funder, explaining what you are both agreeing to in terms of what you will do (and perhaps even what you will not do).

Strategies to introduce fees

Continue to offer a version of the product or service free, while offering a more tailored/advanced option at a price.

It is easiest to institute a price for an already-existing service when there is a significant upgrade or change in that service, the key word being significant.

Remember “Why Fees?”

• Fees/revenue cover costs.

• Fees ALSO increase accountability to the people and organizations receiving services. The people paying you become your customers.

Know what that second bullet means!

Break?

• Break?

Fees & expectations

As was said earlier: clients who expect to pay for something anticipate gaining significantly more from an organization than those who get the service for free.

Let's explore an example:

Example: CV consultation (1)• A UN worker helps people here and there

with their CVs. She does it as a volunteer – unpaid. She doesn't advertise her services.

• The people she helps become more successful in pursuing international jobs.

• She decides to start charging for her service, and advertising to attract new clients.

• How will her work change because she's charging for it?

Example: CV consultation (2)• Advertising a service, and charging for it,

promises a certain level of service; volunteering is just being nice, but a fee turns it into business.

• Those purchasing the service have a higher expectation of quality, timeliness and results.

• People being helped become customers, and may be more likely to be more demanding, express dissatisfaction, etc.

Revisiting Client Needs

Let's look again at the Worksheet for Clients, Customers & Stakeholders.

This time, let's fill it out for another service you want to charge for.

Upgrading to a fee-based service It's probably free for anyone to come look at your

library of information, to attend an information night, etc. If you were to charge a yearly membership fee of just $20, what might a person get in addition to those free services?

You don't charge to provide contact information and listings of major high schools and universities in your country to US colleges and universities. But how much work is it for you to set up a face-to-face meeting between US reps and local reps? Could you charge for that?

SWOT: Strengths,

Weaknesses, Opportunities,

and Threats

SWOT – GROUPWORK 2

Use this for thinking about introducing fee-based services, changing fee-structures, etc.

Breathe!

• What are you thinking?

• What have you learned?

• What fears do you have?

• Skeptical?

• What's on your “to do” list?

Don't forget

www.coyotecommunications.com/hungary

building revenue streams for educationusa advising centers an intensive one-day training part 2:...

jayne cravens

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