Business Planning for Special Schools

A Practical Guide

Caroline Coles, Richard Field

• Publisher: Routledge
• Year: 2018
• Print ISBN:
  9781138487833
• eBook ISBN:
  9781351041324
• Topic: Education
• Subtopic: Education General

Originally published in 1997. This book presents a practical way of addressing business planning in the special school. It provides examples of ways in which the business planning process can be structured, coordinated, and linked to the budget. It offers advice on the most appropriate tools and techniques used for developing a plan so that the school can capitalise on the full benefits of business planning but avoid many of the common problems. It contains a set of overheads and includes a real example business plan with an evaluation. This book is for headteachers, management teams and school governors. It is also an excellent resource for in-service training and for those studying education management in teacher training or on Post Graduate programmes.

Chapter 1

Introducing Business Planning

This chapter introduces business planning by identifying some of the factors which have lead to its widespread adoption. The potential benefits of introducing business planning and characteristics of a successful plan are also outlined. The chapter concludes with the introduction of a business planning model.

Business planning is not new, at least not in the private sector. For as long as entrepreneurs have needed to secure finance, they have had to persuade would-be shareholders or lenders of the merit of their case, normally via the submission of a business plan.

Whilst business planning has traditionally been undertaken for the ‘whole’ organisation seeking finance, this is increasingly being extended to smaller units within organisations. These units are often established as ‘business’ or ‘trading’ units enjoying considerable freedom over how they operate but with a requirement to achieve a target level of profitability, or to meet certain standards. Used in this context the plan is normally aimed at securing the ‘permission’ of senior managers within the wider organisation for a proposed course of action.

In the public and voluntary sector, business planning is comparatively new, being one of a number of widespread responses to the changes of the last two decades. This period has seen a significant shift towards a more commercial and ‘businesslike’ approach to managing public and voluntary services, encouraged by legislation concerning compulsory competitive tendering, the creation of internal markets, market testing, etc. There has also been a general increase in the level of devolved responsibility, with many organisations, including schools, developing new structures and arrangements for managing services. Included within this change process is the adoption of purchaser/provider arrangements, where the provider unit must frequently operate as a business unit. Irrespective of the detailed arrangements for operating these units, which can vary significantly, there is a common need to define their purpose and ensure the services they offer are attractive to the customers and purchasers they seek to serve. Without recognising this change the survival of these units may well be at risk, as was the case when Local Management of Schools was introduced and many local authorities created business units for curriculum advice, personnel, finance and local authority inspection teams. Where once these simply provided ‘uncharged-for’ services to schools, they now had to sell their services in sufficient quantity to secure income to survive.

Within local education authority (LEA) schools there is now much clearer and greater responsibility and freedom to operate, but in the knowledge that a failure to perform in a ‘businesslike’ as well as in an educational sense could ultimately cause the school to fail.

Whilst voluntary sector schools have always been dependent on contract income from LEAs, social services and health departments, there is an increasing pressure to tailor provision to meet the needs of purchasers and individual pupils. OFSTED reports indicating the levels of ‘efficiency’ and value for money are becoming increasingly important to the purchaser. A failure to offer appropriate high-quality provision at an acceptable price is likely to lead to a loss of contract income, dwindling school rolls and increased unit costs. Unless an organisation is prepared to fund the resulting income shortfall from non-contract sources, the school may be forced to close.

Business planning provides a means for ensuring that the direction and operation of the school is appropriate to the needs of pupils and other stakeholders. Effective use of the process should lead to resources being deployed in the most appropriate way, value for money should be achieved, and the school should constantly develop.

Defining business planning

There are as many definitions of business planning as there are organisations. Martin and Smith (1993) define business planning as ‘the activity of preparing your organisation for events that will influence its future’.

Knight (1993) described the rational model of planning with its cycle of analysis, objective and strategy setting leading to implementation and monitoring. Business planning is one approach falling within this model.

Figure 1.1 gives the definition of business planning used within this book.

Figure 1.1 Business planning definition

This definition extends beyond that offered by Martin and Smith (1993), recognising two important dimensions: firstly, the identification of an appropriate direction for the school or service; and, secondly, the deployment of resources in a way which should ensure that this direction is followed.

If business planning works well it will become an integrated part of the management process, and a constant but not dominant part of school life.

Defining the business plan

The most tangible outcome of the planning process is the business plan, defined by the Local Government Management Board (LGMB, 1991) as ‘a statement of the actions and resources required by a business to sustain and grow its activities’.

Most organisations prepare business plans to persuade decisionmakers to invest new money or allocate scarce resources in a particular way. Uppermost in the decision-maker’s mind therefore will be concerns about whether the actions proposed in the plan appear logical given the context, and whether the hoped-for results are desirable and realistic.

The definition in Figure 1.2 recognises that the business plan needs to persuade decision-makers of the merit of proposed actions. One important means of doing this is by including a summary of the environmental context within which the school or service is likely to be operating, together with an assessment of its ability to do so effectively.

Figure 1.2 Business planning in special schools

The time period covered by a business plan varies by organisation but normally involves three to five years, with the first year being highly detailed. The process of completion includes consideration of the overall purpose of the school (mission), what it wishes to achieve (objectives), and the means for doing so (strategy).

Some organisations prefer to have a strategic (long-term) plan and a business plan which is then focused on implementation of the strategic plan. The approach to business planning advocated here encompasses both the long- and short-term dimensions within a single process and document.

In approving a course of action the organisation is in effect confirming that the plan is both educationally and commercially sound. What makes commercial sense, at least in the short term, might be ill-advised educationally, and those approving the plan will need to consider the impact such proposals will have on the learning experience of both current and future pupils.

Benefits arising from business planning

Whilst organisations introduce business planning for a wide variety of reasons, the benefits they are seeking are common. The extent to which they are realised depends on the quality of the plan and the process used to generate it. The potential benefits are identified in Figure 1.3.

Figure 1.3 Benefits of introducing business planning

Characteristics of a successful business plan

Ultimately the success of a business plan is likely to be judged in terms of whether the school or service achieves the objectives it sets itself.

For some managers, a success factor can simply be whether the plan is accepted by those evaluating and approving it. Given the possible managerial target to gain this immediate measure of success, it is important that those evaluating do so thoroughly. This evaluation involves separating two strands. Firstly, the appropriateness of the specific objectives and strategies contained within the plan and, secondly, the structure, content, persuasiveness and overall quality of the document.

There is a need to ensure that those involved in business planning have a shared understanding of what constitutes a good business plan. This helps those writing it to pitch the content correctly, and those evaluating it to benefit from having a framework against which to make a judgement. The characteristics included in this framework and the relative weight given to these will vary. Within Scope, for example, education services developed criteria clustered into two main areas: qualities and content. These reflected the shared concerns and priorities identified by their education team. Implicit within these shared concerns was a need for the plan to be written in a way which was clear, well-structured, and sufficiently detailed to allow those evaluating it to make an informed judgement.

Establishing a business planning model

To ensure effective business planning a robust process is required, and an important factor in this is the adoption of a clear model as shown in Figure 1.4. Whilst this appears to be a neat set of stages, each being completed before the next starts, the reality is inevitably more complex, frequently requiring those planning to revisit earlier stages of the process. Whilst the first attempt can be of enormous assistance to the organisation it can often take three years of business planning before the document reaches a high and well-refined standard. This is because of the need to collect new data, gain familiarity in the use of tools, and gain confidence in managing the school as a commercial as well as educational entity.

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Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Table of Contents
• Acknowledgements
• Preface: Business Planning for Special Schools
• Why Use This Book?
• 1 Introducing Business Planning
• 2 Developing an Approach to Business Planning
• 3 Preparing the Business Plan – Analysis
• 4 Preparing the Business Plan – Setting Direction
• 5 Preparing the Business Plan – Implementation
• 6 The Scope Experience
• 7 Example Business Plan – Meldreth Manor School
• Appendix A: Business Plan Format
• Appendix B: Revenue Account – Example
• Appendix C: Cash Flow Forecast – Example
• Appendix D: Business Plan Evaluation Summary
• Appendix E: Overhead Transparencies – Masters
• Bibliography