Revenue and cost are the two most important parameters in any business. Increasing revenue and/or lowering costs give the very reason for businesses to exist which is profit.
Balancing the equation without compromising business or revenue growth is the biggest challenge for any entrepreneurs and CEOs. Too often, the increase in revenue is at the expense of cost which makes the profit, as well as businesses, become unsustainable.
And guess what? Education business is no exception.
To boost admission rate, colleges often spend more on advertising and promotion in order to increase leads. They start hiring salespeople to attract more students, recruiting new staffs and renting extra spaces just to manage the rise in the student population.
But, this comes with big costs. The costs grow fiercely correlated to the growth of new revenue. If the student population somehow become stagnant or decline, the costs, however, will not fall. And worst, it will continue to hike year-on-year due to the increase in salary and inflation-adjusted costs.
Failing to control these parameters would be catastrophic! And from the education industry’s perspective, there will be some level of social-economy impact to the community.
Is there any way to make the equilibrium more favorable to everyone? For example, increasing the number of students without increasing sales-related spending could result in the reduction of costs without affecting overall operation.
Reference
Written by Vialing Inc (Medium).