Building A Growth Strategy - April 2014

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Growth is a critical component of a charter school’s operational strategy. Our team has worked with more than 400 charter schools across the country. This deck shares practical insights around the three stages of charter school growth and the impacts at each stage.

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Building A Growth Strategy - April 2014

  1. 1. Copyright © 2013 Charter School Capital, Inc. Building a Growth Strategy April 1, 2014
  2. 2. 2 Copyright © 2013 Charter School Capital, Inc. WHAT WE’LL COVER •  Charter school growth stages •  Challenges school operators face at each stage •  Best practices and takeaways Agenda Presentation will be available for download
  3. 3. 3 Copyright © 2013 Charter School Capital, Inc. WHO WE ARE •  Marshall Emerson, Co-Founder and CEO, I CAN Schools – Ohio-based charter school institution founded in 2010 – Operate seven schools serving more than 2,000 students •  Stuart Ellis, President & CEO, Charter School Capital – Began funding California charter schools in 2007 – Serve more than 400 charter schools, supporting in excess of 400,000 students nationwide – Providing creative working capital, facilities financing, and entitlement services Panelists
  4. 4. Copyright © 2013 Charter School Capital, Inc. Stages of Growth
  5. 5. 5 Copyright © 2013 Charter School Capital, Inc. STAGES OF GROWTH # of Students Start-up Survival/Establish Growth Flexibility/Stability Sustainable Maturity Efficiency Time (years) 0 2-3 5-10 100% Students as a % of mature targets 10-25% 25-90% 90-100%
  6. 6. 6 Copyright © 2013 Charter School Capital, Inc. CHALLENGES Reasons for charter school closures 42% 24% 19% 6% 5% 4% Financial Mismanagement Academic Authorizer Obstacles Facilities Other Source: The State of Charter Schools, The Center For Education Reform, December 2011
  7. 7. 7 Copyright © 2013 Charter School Capital, Inc. STAGES OF GROWTH Strategic approach Start-up Growth Sustainability Financing Facilities Community involvement Academic accountability Operational support
  8. 8. 8 Copyright © 2013 Charter School Capital, Inc. STAGES OF GROWTH Strategic approach Start-up Growth Sustainability Financing Any liquidity Facilities In target locale Community involvement Awareness Academic accountability Establish program Operational support Outside experts
  9. 9. 9 Copyright © 2013 Charter School Capital, Inc. STAGES OF GROWTH Strategic approach Start-up Growth Sustainability Financing Any liquidity Flexibility/ scalability Facilities In target locale Modular Community involvement Awareness Fulfill the promise Academic accountability Establish program Measure program Operational support Outside experts Transitional resources
  10. 10. 10 Copyright © 2013 Charter School Capital, Inc. STAGES OF GROWTH Strategic approach Start-up Growth Sustainability Financing Any liquidity Flexibility/ scalability Cost Facilities In target locale Modular Curb appeal/cost Community involvement Awareness Fulfill the promise Fabric of community Academic accountability Establish program Measure program Continuous improvement Operational support Outside experts Transitional resources In-house team
  11. 11. 11 Copyright © 2013 Charter School Capital, Inc. STAGES OF GROWTH Strategic approach Start-up Growth Sustainability Financing Any liquidity Flexibility/ scalability Cost Facilities In target locale Modular Curb appeal/cost Community involvement Awareness Fulfill the promise Fabric of community Academic accountability Establish program Measure program Continuous improvement Operational support Outside experts Transitional resources In-house team
  12. 12. 12 Copyright © 2013 Charter School Capital, Inc. STAGES OF GROWTH •  Different structures of working capital – Receivable sale – Term loan – Line of credit •  Facilities financing options – Lease option – Bond – Traditional bank loan •  Regarding costs of funds, all costs are NOT created equal – Evaluate total $ cost rather than % rate – Consider fixed transactional costs and penalties, in addition to annual rate related to costs Finance considerations
  13. 13. Copyright © 2013 Charter School Capital, Inc. The Start-up Phase
  14. 14. 14 Copyright © 2013 Charter School Capital, Inc. STAGES OF GROWTH Start-up Common Misperceptions Founding team to “create” best practices “If you build it, they will come.”
  15. 15. 15 Copyright © 2013 Charter School Capital, Inc. STAGES OF GROWTH Start-up Marshall speak to this series of slides The Challenges Finding good leadership and teachers Securing resources Finding suitable facilities Healthy enrollment Sustaining high performance as network expands
  16. 16. 16 Copyright © 2013 Charter School Capital, Inc. STAGES OF GROWTH Start-up Best Practices Study and meet with schools doing things well Don’t be a master of everything. Master a few things and do them really well Build genuine and robust relationship with teachers, leaders, vendors, and external constituents Pay close attention to the budget Pay even closer attention to student progress data Do not waiver in your belief or mission
  17. 17. Copyright © 2013 Charter School Capital, Inc. The Growth Phase
  18. 18. 18 Copyright © 2013 Charter School Capital, Inc. STAGES OF GROWTH Growth Common Misperceptions “After the 3rd year, all will be in place and it’s smooth sailing!” Performance and accountability requirements will be stagnant Done with professional development No need to change routines or systems We’ll have sufficient funds from operating revenue to support expansion Facility upgrades will be minimal, if at all
  19. 19. 19 Copyright © 2013 Charter School Capital, Inc. STAGES OF GROWTH Growth Challenges Maintaining high expectations and being flexible Advancing levels of student performance Managing growth with limited resources Upgrading systems to support growth Retaining quality teachers and leaders Matching capital to operational needs
  20. 20. 20 Copyright © 2013 Charter School Capital, Inc. STAGES OF GROWTH Growth Best Practices Continuous professional development and leadership training Build on the culture Focus on individualized instruction and data analysis Increase visibility in the movement
  21. 21. Copyright © 2013 Charter School Capital, Inc. 21 Copyright © 2013 Charter School Capital, Inc. The Sustainable Maturity Phase
  22. 22. 22 Copyright © 2013 Charter School Capital, Inc. STAGES OF GROWTH Sustainable maturity Common Misperceptions With growth, comes distance Time to cash in Challenges decrease as you scale
  23. 23. 23 Copyright © 2013 Charter School Capital, Inc. STAGES OF GROWTH Sustainable maturity The Challenges Developing and executing a sustainable strategic plan Anticipate challenges Identify aspiration – mission, vision, core values, SWOT Right team to implement strategic vision and plan Reevaluate financing to match your needs
  24. 24. 24 Copyright © 2013 Charter School Capital, Inc. STAGES OF GROWTH Sustainable maturity Best Practices Define your objectives clearly and communicate them extensively both internally and externally Celebrate your successes and analyze your failures Develop data-driven culture and make sure you retain the passion that got you started Take what you do seriously with out taking yourself too seriously Develop pillars that define what you do Assess performance regularly and use assessment to improve
  25. 25. Copyright © 2013 Charter School Capital, Inc. Recap
  26. 26. 26 Copyright © 2013 Charter School Capital, Inc. STAGES OF GROWTH Recap Start-up Growth Sustainability Financing Any liquidity Flexibility/ scalability Cost Facilities In target locale Modular Curb appeal/cost Community involvement Awareness Fulfill the promise Fabric of community Academic accountability Establish program Measure program Continuous improvement Operational support Outside experts Transitional resources In-house team
  27. 27. 27 Copyright © 2013 Charter School Capital, Inc. STAGES OF GROWTH •  Stages in charter school lifecycle present very different challenges •  Strategy and focus needs to vary significantly as you grow •  Leverage experts at every stage to allow you to focus on educating kids •  Financial analysis illuminates positive potential impact of growth and scale Key takeaways
  28. 28. Copyright © 2013 Charter School Capital, Inc. Questions?
  29. 29. Copyright © 2013 Charter School Capital, Inc. 29 Copyright © 2013 Charter School Capital, Inc. Thank you.
  30. 30. 30 Copyright © 2013 Charter School Capital, Inc. Stuart Ellis 877-272-1001 sellis@charterschoolcapital.org

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