Test Prep & Tutoring Professionals

Summer class options are key to ensuring summer cash flow.

Summer can be a difficult time for small tutoring companies. In fact, even well run companies sometimes struggle with cash flow in July and August. A primary reason for this is that small businesses often use cash based accounting

Since cash flow generally aligns with revenue which aligns with the business cycle, once the business cycle dips, so to does the cash flow to the business.

However, since this pattern of demand is knowable, there are ways to cope. One of the obvious ways is to reduce the expense baseline during low demand months. Another way is to generate more revenue per each expense dollar spent. And still another way is to zero in consumer behavior and timing in order take advantage of what I will call micro-demand cycles. It is the latter two that we'll focus on.

To be clear, coping with diminishing demand is not the same as generating record setting revenue. But if the goal is to cover expenses until the demand cycle regenerates in late August, here are some best practices.

identify summer programming that will generate cash flow without killing the margin
schedule to maximize program efficacy. This is code for scheduling classes or camps. Larger groups disproportionately and positively impact revenue in comparison to expenses.
Here is a short list of things that I have used with good effect:

SAT/ACT Bootcamps
SAT or ACT Weekend Workshops
College Admissions Essay Workshops
Summer Reading Programs
STEM based camps

You needn't schedule more than one or two of each from the list above in order improve a revenue position.

A caveat: people are making summer plans now and will therefore welcome information further in advance than during peak demand periods. The time to get the word out for summer programming is essentially over the next few weeks.

Good luck and please contact me if you have any questions!
Kevin

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