Building A Charter School Growth Strategy: Startup, Expansion, Maturity

Copyright © 2013 Charter School Capital, Inc.

Charter School

Growth

Strategies

Start-up, Expansion,

Maturity

California Charter Schools

Conference

March 18, 2015

2Copyright © 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 available at:

SlideShare.net/CharterSchoolCapital


WHO WE ARE

Caprice Young, CEO, Magnolia Public Schools

Skip Hansen, EVP, Learn4Life Concept Charter

Schools

Stuart Ellis, President & CEO, Charter School Capital


Stages of Growth


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%


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


STAGES OF GROWTH

Strategic approach

Start-up Growth Sustainability

Financing

Facilities

Community

involvement

Academic

accountability

Operational

support


STAGES OF GROWTH

Strategic approach


Financing Any liquidity

Facilities In target locale

Community

involvement

Awareness

Academic

accountability

Establish program

Operational

support

Outside experts


STAGES OF GROWTH

Strategic approach


Financing Any liquidity Flexibility/scalabil

ity

Facilities In target locale Modular

Community

involvement

Awareness Fulfill the promise

Academic

accountability

Establish program Measure program

Operational

support

Outside experts Transitional

resources


STAGES OF GROWTH

Strategic approach



ity

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


resources

In-house team


STAGES OF GROWTH

Strategic approach



ity

Cost


Community

involvement


community

Academic

accountability


improvement

Operational

support


resources

In-house team


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


MILE

M – Management

I – Instruction

L – Leadership

E – Excellence


The Start-up Phase


STAGES OF GROWTH

Start-up

Common Misperceptions

Founding team to “create” best practices

“If you build it, they will come.”


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


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


The Growth Phase


STAGES OF GROWTH

Growth


“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


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


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



The Sustainable Maturity Phase


STAGES OF GROWTH

Sustainable maturity


With growth, comes distance

Time to cash in

Challenges decrease as you scale


STAGES OF GROWTH


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


STAGES OF GROWTH


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


Recap


STAGES OF GROWTH

Recap



ity

Cost


Community

involvement


community

Academic

accountability


improvement

Operational

support


resources

In-house team


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

Copyright © 2015 Charter School Capital, Inc. All Rights Reserved.

Questions?


Thank YouPresentation available at:

SlideShare.net/CharterSchoolCapital

Stuart Ellis

[email protected]

877-272-1001

Skip Hansen

[email protected]

Caprice Young

[email protected]

Building A Charter School Growth Strategy: Startup, Expansion, Maturity

Education

charter school finance

charter school closuressource

charter school clients

charter school market

pie charter

state of charter schools

school failures

client schools