(Pulse) By Kevin Organisciak–
I am rarely the smartest person in the room and what you are about to read is probably contrary to what most experts may be saying about brick and mortar business but, hey, sometimes the contrarian can be right (or at least helpful).
There is no denying that the trend in retail is toward what is known as the omni-channel.  Further, there are countless anecdotes about the decline of whole brick and mortar based industries such as media (Sam Goody) as a result of the convenience and customization of order fulfillment through online business ventures.
Test Prep, Admissions, and Tutoring may be slightly different but the trend toward online courses, synchronous online tutoring, and remotely based admissions counseling is evident.  So, where does that leave an Educational Service provider with a brick and mortar footprint?   Generally the answer is:  with more overhead than online-only providers who don’t have to pay rent.
But, if one is able to step outside the traditional view of brick and mortar education,  there can be a silver-lining with some deliberate planning.  After all, many parents still choose well respected local businesses with a known location as opposed to online only learning options.
Before we get there though, I need to introduce you to two concepts:
1.  ROI – for our purposes this will mean the $ value generated from  your real estate investment.  As example,  if you spend $60k on rent and generate $200k in revenue (from your brick and mortar business) the ROI is 70% [200-60/200].
2. Utilization – for our purposes, utilization means the level at which your real estate is at revenue generating capacity.  This one is a bit trickier.  Let’s assume your business is open from 9am to 9pm each day.  Let’s also assume that a revenue generating session (whether it be tutoring, test prep, or admissions counseling, is 60 minutes).  Lastly, we’ll assume that you have two class spaces through which revenue can be generated (and I realize this is a simplification but play along).  If these assumptions are true, 100% utilization each day would be 12 hours x 2 spaces x 1 hour session = 24.
From this point, it is helpful to go through the exercise of determining what your Actual Utilization is.  If you are a tutoring company and most tutoring takes place between 3pm – 9pm and you are booked solid on a given day,  that is you have students in each of your two spaces every hour between 3pm and 9pm, your utilization would be 12 / 24 = 50%.
So, in one regard, knowing that you are booked solid and your utilization is 1/2 what it could be, can be deflating.  On the other hand, this leaves one with some terrific upside if the remaining 50% of open time could be scheduled.  This is the silver lining.  For, if one could theoretically improve utilization to 100%, one could conceivably double the business revenue.
And this is where some brainstorming is helpful.  How does one fill the open slots between 9am – 3pm with revenue generating activity?  Or, if one cannot think of a revenue generating activity, how can the cost of the space be offset to improve the ROI?
Here are some ideas that I’ve recommended in the past.
1.  Homeschool – connect with local home school networks and avail your space to that group during the school day.
2.  Adult learner programs – ask yourself what sort of clients could use a learning space during the day and create programs or better yet, host existing programs at your location.  Adult learning programs such as ESL stand out here.
3.  Communal space – avail your space to an organization that could run programs from your space.  These can be community organizations, private clubs etc.
4.  Younger learner programs – having an expertise in educational services often allows one to create programs for younger learners.  Think pre-K or 1/2 day kindergarten enrichment programs.
5.  Alternative education – a growing number of students  utilize tutoring services outside of the traditional public/private school systems.  This may afford an opportunity to local companies such as yours.  Try connecting with at the local high school to learn about Credit Recovery.
Remember, every dollar you can earn from any, some, or all of the above will improve both the ROI from your real estate and the Utilization % of your revenue generating space.   Also remember, that there are a series of forward-looking strategies which may help improve the revenue generating capacity of your existing programs:  remote tutoring, remote counseling, classroom based programs, white-label online courses, product line segmentation, and vertical integration to name a few.  I’ll cover those tactics in a future post.