7 reasons to create a business plan and budget for your school

Schools, like any other company or organization, must prepare business plans and budgets for day-to-day operations. If you are a school leader or an educator, you must have some idea about business planning and budgeting.

It is a misconception that a well-defined and detailed budget is essentially the same as a business plan, but a well-made budget is an essential component of a business plan. An accurate business plan gazes beyond the projected income and expenses to answer strategic and tactical questions.

Let’s discuss business planning and budgeting and the reasons to have these plans charted for your school.

What is a Business Plan and Budget?

A business plan represents a road map for your new school. There are many things included in the business plan, but mainly it is there to explain what you hope to accomplish with your school and how you will achieve it.

Business plans also provide the necessary documentation for investors and financial institutions to check whether your school is worth investing in.

On the other hand, a budget is primarily an internal document that tracks income and expenses to determine where your spending should take place. If you need new textbooks for your school and want to give a raise to someone, your budget will guide you through your decision-making.

7 areas where business plans and budgeting benefit schools

1. Planning

Planning is the primary and most crucial part of any business. If you are a new school owner, a business plan will help you identify resources and how to use them to manage your school. School leaders and promoters can streamline their businesses and work towards their goals with proper planning.

Planning makes school leaders well-equipped for the future. A plan creates a school’s focus towards goals, time efficiency, resource allocation, preparation for uncertainties and business expansion.

2. Finance

Business planning and especially budgeting help school leaders in managing their finances. Things such as the cost of equipment and supplies, payroll or salaries paid to staff, business insurance, taxes, loans and other sundry expenses significantly affect the school’s finances.

Mishandling these expenses can lead to business loss, or the worst-case scenario would be shutting down the school. Budgeting helps schools in making financial plans and achieving favourable financial decisions.

3. Income

Income is the deciding factor in any business decision. Market research and marketing strategy are part of the income and the strategies to minimise expenses. Also, business planning helps school leaders find other sources of income, such as renting sports fields, auditoriums and other spaces in the school on off days.

Also Read: 5 Reasons Why School Infrastructure Is Important for A Child’s Growth

4. Decision making

An individual’s beliefs, past experiences and values are based on decision-making. A school comprises stakeholders such as parents, teachers and students and every decision affects all the stakeholders. Crucial school decisions are related to curriculum, personnel and budget and these decisions become easy due to business planning and budgeting.

5. Market learning

Business planning and budgeting involve market research and analysis. Without market knowledge, a newly opened school cannot maintain its business. Business planning lets school leaders gain knowledge of competitors and market trends. When school leaders know what is in demand, they can work on strategies to fulfill those demands and earn profits. 

6. Prepare for emergencies

The Covid-19 lockdown was a period of emergency, not just medically but also financially. Budgeting and business planning can prepare schools to face uncertain situations by minimising expenses and contingency plans.

Parents and the government appreciated contingency plans such as disaster management, WhatsApp classes, community hubs, online learning and involving ed-tech companies in the schools during the lockdown. 

7. Vision

It is a position that a school leader eventually wants to achieve. A school leader’s vision is based upon their aspirations and goals. Business planning and budgeting broaden the horizon of the school leader concerning the school as a business and educational institute.

Budgeting helps school leaders discover what is achievable according to their vision and what is still required to fill the gaps between vision and reality.

The pandemic disrupted the education system, but at the same time, taught many valuable lessons to plan and overcome such uncertain events in future.

It is high time for school leaders and educational professionals to start working towards business planning and budgeting to generate income and promote education and ultimately make their vision into reality.