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Learning how to earn more revenue in schools

12 October 2012
Learning how to earn more revenue in schools

In the age of austerity and budget cutbacks, every organisation needs to look for ways to bring in more revenue - and that applies to schools as well as commercial companies. Siobhan O'Neill looks at the ways contract caterers are helping their education clients make money

The ongoing political debate surrounding academy schools frequently notes that academies are "run like businesses". But with cuts biting hard, academies are not the only schools to be turning to business models as a means of balancing the books.

Many schools are investigating ways to identify potential opportunities for additional revenue streams. In the fee-paying independent sector, running your school like a business is purely good financial acumen, but even state schools are identifying commercial opportunities that can help raise much-needed funds.

For school caterers these additional revenue streams can represent partnership opportunities that add value to a contract. "We work with clients to help them see the opportunities," says Kate Martin, managing partner at The Brookwood Partnership, which has 97 schools on its books, mostly independent. "We have many clients who use them for weddings and summer schools for adults or children during the summer. We have some who use their facilities for TV productions or product launches. I've got one client who's looking to hire out his facilities to host summer evening concerts. They've got beautiful acres of land doing nothing and lots of car parking space. So it's about exploring those opportunities with them and making the most of them."

Holroyd Howe managing director Ronan Harte says that weddings are often a successful enterprise activity for independent schools. "It's because they're very picturesque, beautiful old buildings, converted manor houses and so on, and they're normally in pretty stunning grounds," he adds.

Where schools are keen to maximise their potential Holroyd Howe will manage that side of the business on their behalf. "We will work with them to drive it as a line of revenue because we have teams of people in our business who just do this," Harte says. "We have specialist staff with a conference or banqueting understanding, so we can grow the activity within the school. You'd be surprised in some schools how big a business this is. It's quite serious. Maybe two or three weddings over a weekend, most weekends of the year."

Both Harte and Martin understand that for the school revenue may be important, but the focus on education has to remain paramount. "You have to pitch it right. The parents paying fees need to see that it's adding value, not detracting from the education," Martin explains.


Above: The Royals coffee shop at TASIS

In some cases the partnership can work by adding to the education of the students as well as bringing revenue to the school. At Ravens Wood school in Kent, Pabulum offers food support for a conferences operation the academy runs. But there are other mutual benefits. "They have a fantastic new lecturing kitchen which we've used as our first Pabulum Cookery School where we do all our training and development," says managing director Nelson Williams. "The quid pro quo is that we do lessons for all their sixth formers, teaching them how to cook on a budget and getting them ready for university."

Staff in education settings also benefit from continuing employment through the summer months as well as learning new skills, while the additional skillset required allows the company to recruit highly qualified chefs from top restaurants or the business and industry sector. "The type of service is very different from feeding kids, but then a lot of hospitality already goes on within schools with parent receptions, balls and so on," Martin says. "We'll invest training in a team to give them the confidence to change from being dinner ladies to five-star hospitality waitresses."

For schools the additional revenue can be extremely useful. "One school we cater for has funded a swimming pool from their profits, so it is significant," says Deborah Homshaw, operations director at Host. "They spend approximately 30% of their food costs on hospitality and functions, so when they charge a profit on that, they can offset their costs."

"It can mean a fair bit of income," agrees Martin. "For weddings they might have to invest first in equipment, tables, linen and so on. Hiring is costly. We'll sit down with them and work out a business plan. The school will be interested in revenue but they don't want any hassle. If weddings look like too much work, maybe they'd be more interested in hiring their facilities for car boot sales or craft fairs, but it has to send the right message. It's an extension of their brand."

This means the marketing has to be handled correctly. Caterers and schools will work together to create brochures, or may simply rely on word of mouth, preferring bookings to be made from the local community or from staff. For caterers it's a chance to showcase their skills and generate some good PR but financial returns may not be as high for them as they are for the school.

"It's adding value to our catering service," explains Martin, "so we're offering an all-in- one service. The last thing we'd want is another caterer turning up on one of our sites and doing something, so we do it. For weddings we charge a percentage on the take from food costs but it's not a huge earner for us, it's an add-on."

Harte says that the key is to do the best job for the best price for the client. "So if this brings in a stream of revenue - and more importantly a stream of profit - that helps to reduce the cost of catering or drive a surplus for your client. That makes them happy, which means we keep our business and we continue to grow. So it all goes round in a circle," he adds.


Tips for adding revenue streams in schools

â- Use the school's strengths and understand the venture will reflect on the school's profile.
â- Bear in mind the school's maintenance programme and facilities. A boys' school that wants to host weddings will need to provide toilets for female guests, too!
â- Work together on marketing and decide who to target. Is it worth either party employing a full-time marketing staff member?
â- Know which side of the partnership will perform which duties, including bookings, tasting sessions, room showings, etc.
â- Start slowly and aim to build the revenue over several years.


Identify a window of opportunity

The Brookwood Partnership designed and opened the Royals coffee shop at TASIS (The American School in England), in Surrey, to boost business throughout the day.

It is open to staff, pupils and parents from 7.30am, for breakfast and all day into an evening service. Brookwood buys Starbucks products which it can sell at its own preferred price, and staff are given Starbucks barista training. The café operates under a commercial agreement with the school so profits are shared.

The Brookwood Partnership managing partner Kate Martin explains: "You've got to work with the school to identify the window of opportunity. For academies or schools that offer training or adult education it might be offering a supper, or there could be a revenue opportunity to open a coffee bar late in the evening as we have done at TASIS."


An academy approach to conferencing

Pabulum managing director Nelson Williams says that academy schools are run in exactly the same manner as any other business. "The head teacher is the managing director who will look after the education side, and the commercial arm and finances are looked after by the business manager, who invariably comes from a very strong commercial background," he explains.

In the main they are modern buildings that are designed with one eye on education and one eye on the commercial arm by making sure the meeting rooms and conference facilities feature hi-tech equipment and can be competitive in the marketplace.

"First, they're enabling people from the community to use the facilities; and second, they would see an opportunity to go out to local businesses," says Williams.

"The school will control the lettings and the caterer will support them in the food offer and room set-ups. At Ravens Wood School in Bromley we're offering fresh food. All our pastries and cakes are made on site, so we're employing chefs with the right skillset and that's even more important if you're going out to market and letting it as a conference facility. The food offer is what you'd expect in any hotel or conference facility."

It's a win-win for the caterer and the school. The focus on conferences adds value, creates additional revenue for both the school and the caterer, and any profit is shared.

THE CHEF'S TABLE AT BOX HILL SCHOOL DORKING

When Host Catering took over the kitchen at Box Hill School in Dorking it decided the space should be redesigned to make better use of the area.

"We ended up with a storage/prep room in the middle of the kitchen but it didn't really serve a purpose," explains catering manager Des Del Frate. "I'd worked at Antony Worrall Thompson's in Windsor where we'd used a vacant space for functions and I'd worked at a couple of chefs tables so I married the two together, thinking it would be good to showcase the food to prospective parents and clients and generate a bit of PR for Host and the school."

Del Frate serves a tasting menu at the chef's table, using ingredients that the younger chefs haven't worked with - such as scallops, crabs, lobsters and different cuts of meat, as well as fresh pasta work to keeps their skills up.

The main course is also on the students' menu, but is plated in a restaurant style. "We run it two or three times a week depending on bookings and what the demand is on the kitchen," Del Frate adds.

Host operations director Deborah Homshaw says the chef's table was seen as a great opportunity by the school. "The headmaster uses it frequently to entertain prospective parents or other local schools and we use it for our prospective clients as well," she says. "It's a great opportunity for the chefs. It adds value, it showcases the talent that we can bring and gives the message about the training and ability of our staff, which is the key thing in our business. I have one school where the head tells me that the deciding factor for parents is the food. That's what we strive to do."

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