The Top Five Financial Mistakes Charter Schools Make: And How to Avoid Them

Did you miss our live session at the National Charter Schools Conference; The Top Five Financial Mistakes Charter Schools Make: And How to Avoid Them? Not to worry! We wanted to make sure to share the highlights from this session right here on the Charter School Capital blog. We were honored to have an outstanding panel of charter school experts whose depth of experience brought so much value to this presentation.

Tricia Blum Head of Business Consulting, Charter School Capital
 
 
Margie Montgomery Founder, Desert Star Academy
 
 
Sharon Thompson, Chairman of the Board, Wayne Academy
 
 
Michael LaRoche Founder/Executive Director, SALTech

The Five Mistakes

The panelists began by outlining the top five mistakes:
1. Not Recognizing Your Schools is a Businesses
2. Being Unprepared for the Unexpected
3. Underestimating the Importance of Finances
4. Losing Sight of Your Mission
5. Not Maintaining Strong Relationships

How to Avoid the Top Five Financial Mistakes Charter Schools Make

Here’s a bit more detail on each mistake and the action items you can take to avoid them:

MISTAKE #1: Not recognizing that your school is a business

ACTION STEPS
1. Be the superintendent (not a principal)

• Not just curriculum and teachers
• Its endless hard work
• You will be challenged in ways you never thought possible

2. Know your customer

• All your stakeholders are customers:
  • Parents
  • Students
  • Community
  • Authorizer
  • Staff

3. Be the boss—the buck stops with you (literally)

• Everything impacts your financials (especially mistakes)
• You are responsible for it all
• Find a mentor

SOLUTION: REMEMBER, YOUR SCHOOL IS A BUSINESS

MISTAKE #2: Being Unprepared for the Unexpected

ACTION STEPS
1. Beware the lawsuit and bad actors
2. Keep a strong, updated wait list

• Sometimes your enrollment stream dries up or decreases substantially
  • Military bases/large employers, new schools, bad PR

3. Facilities have tripped up more than one great charter schools

• Landlords aren’t always your friend: Know and understand your lease and the numbers behind them
• Start looking for larger or better facilities now

4. Beware the tenacity of angry employees and parents

• Create and maintain good public perception
  • Marketing/PR

SOLUTION: PREPARE FOR THE UNEXPECTED

MISTAKE #3: Underestimating the Importance of Finances

ACTION STEPS
1. Make a plan, work the plan:

• Budget forecast
  • Don’t underbudget
  • Don’t overspend
    *When in doubt do without
• Cash flow
• Budget to actuals
• Have a contingency plan

2. Beware the claw-back

• Forecast enrollment realistically
  • Nobody will correct you but they will take your money

3. Hire a charter school financial expert

• Internally & externally

SOLUTION: REMEMBER, SUCCESS REQUIRES MONEY

MISTAKE #4: Losing Sight of Your Mission

ACTION STEPS
1. Know your end game—its’ your mission and vision

• Tie all financials and operations back to your goal or consciously make new goals (redo mission/vision)

2. FAB (be Ferocious About your Boundaries)

• Said differently, Trust but verify
  • Experts

3. Enrollment, enrollment, enrollment

SOLUTION: KEEP YOUR EYE ON THE PRIZE: YOUR MISSION

MISTAKE #5: Not Maintaining Strong Relationships

ACTION STEPS
1. Authorizers: Aren’t always your friend

• A “fine” relationship with your Authorizer suggests no relationship with your Authorizer
  • Calendar regular contact with staff, ED/superintendent, Charter Board
  • Toot your own horn
  • Show up to Authorizer events

2. Your Board of Directors: know your governance

• You report to them–cultivate them
• Lean on them for good and bad—they should be involved not just aware
• Organized and agenda-d monthly public meetings

3. Experts: find them, pay them-keep the good ones

• Consultants, thought leaders, business partners

SOLUTION: HAVE FRIENDS IN ALL THE RIGHT PLACES

To watch the video of the live presentation, you can find it on our Facebook page.
To download a printable PDF datasheet, click here.
We hope that this has been helpful and valuable information! We’d love to read your comments and suggestions, so please add them in below.

Charter School Capital is committed to the success of charter schools and has solely focused on funding charter schools since the company’s inception in 2006. Our depth of experience working with charter school leaders and our knowledge of how to address charter school financial and operational needs have allowed us to provide over $1.6 billion in support of 600 charter schools that educate 800,000 students across the country. For more information on how we can support your charter school, contact us!