BURSARS
PREPARING FOR AN
UNCERTAIN FUTURE
Covid-19 has added another unknown variable to the survival of independent schools, highlighting the vital process of financial modelling and the ability to react quickly during times of uncertainty. Tom Wilson, partner at haysmacintyre, provides some sound basics on financial forecasting and modelling
C
OVID-19 has caused significant challenges to all businesses, and independent schools are no exception. There has been a huge amount of work across the sector over the last few months from creating online methods of teaching to providing a safe environment for staff and students. However, there are still significant unknowns regarding the actual impact this pandemic has had on school finances, and for how long it will last. This has added to the already significant challenges faced by the sector including affordability, rising costs, declining local markets, and political threats.
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schoolmanagementplus.com I Autumn 2020
These complex and compounding issues mean that significant planning is required to ensure the future of your school, both short-term and long-term. Financial modelling is an essential part of this process.
Establishing a base model
Focusing on coronavirus specifically, the impact is likely to vary across the independent schools sector. Geography, whether you are a prep or senior school and the demographic of your pupil base, are all likely to create different challenges. Some schools will be able to ride out the financial impact of the pandemic with
relative ease, whereas others will face an existential crisis – and every school needs to know where it is on the spectrum. Good financial modelling starts with good planning – understanding how you are going to build your model, your anticipated end product, and the expectations of your stakeholders are key at the outset. This prevents time-wasting amending the base model at a later stage. Whilst a good model can provide invaluable insights, it is only as good as the composite data. It is absolutely essential to understand your data and the sources of it, as well as document your evidence and assumptions where possible, prior to starting the process.
