Using funding correctly and on a budget has always been difficult to master in the educational system. However, in the past few years, the K12 Industry has taken a severe hit due to the COVID-19 pandemic. This means that the education business has had to change its tactics regarding selling to school districts and administrators. Let’s look at the available opportunities to supplement services with federal funding, with the current State of the Industry in mind.
The Changing Industry
It’s no secret that many businesses were hit extremely hard due to the global pandemic. The education world – including all the companies that function under it – was seriously affected, as schools and educational institutions had to devote their funds to remote learning. The government and public schools have evolved almost three years into the pandemic. Many businesses have nearly recovered from this initial hit, even if it’s not how they first operated.
According to the most recent State of the Industry Edweek Market brief, “The vast majority of education companies say their revenues rose over the past year.” This is positive as compared to previous years when they lost money.
The report notes that world and national events impact the State of the Industry, and there have been rising political tensions and health concerns. This will inform the types of things being taught in the classroom. For example, about 70% of teachers say that “they’re working in a state that approved a policy restricting classroom discussions of racism/gender.”
Another essential thing impacting the spending of education businesses is the potential for a federal funding cliff. Edweek reports that “about 1 in 3 company officials say they expect it to have an impact on them, even if it hasn’t already.”
Recent Education Company Performance in the Industry
Many education companies have received additional business in the past year because schools can spend money as supplemental funding. This boost in financial standing gave schools the ability to purchase more tools their students needed to meet their educational needs.
In the past year, about three-quarters of educational “businesses say their revenues have grown over the past year, a small dip from last year, but still, an indication that districts are in buying mode and companies in the market are reaping the benefits.”
This growth trend is projected to continue, with more than 80% of businesses expecting increased revenue in the next six months to a year. This will still not meet pre-pandemic revenue averages, but the trend is positive.
Business Structure Changes
Many industries experienced a shift in employee attitudes, with more staff members leaving their jobs if they were unhappy or underpaid. Remote work has also increased in popularity, which many companies have used to their advantage and has helped reduce employee turnover. As a result, many employees nationwide chose to leave their jobs, known as the Great Resignation. Despite this national attitude, educational companies have remained above water. Edweek reports that most education company employees have stayed loyal to the company.Â
Components like a diverse workforce and employee status can impact a company’s success. It also may motivate schools to work with your company, so emphasizing this kind of business structure can be helpful. In the market report, Edweek found that “the vast majority of organizations say they’ve taken steps to build and maintain diversity in their workforce,” something that also impacts employee retention in the long run.
Using Supplemental Funding
For most educational businesses, the type of company will impact its potential growth rate looking into the future. In addition, because schools can use the funding for a specific amount of time, many of them are more specific in how they spend money.
Here are some examples of types of companies that have seen recent success:
- Professional development.
- Supplemental curriculum.
- Online/blended learning.
- SEL, whole-child, or support for at-risk/special populations
These are categories that educators need right now, especially in light of new learning and teaching strategies that are required of them. The resources in great demand right now will obviously be more successful in the midst of educational budget cuts. Make it clear to the client how your business can help them beat these classroom barriers.Â
Moving into the Future
Despite the roadblocks to education companies, there is positivity to be seen. Most companies predict that investment in different kinds of business functions will increase. For example, many businesses are hoping to spend more money on their sales and marketing efforts, which reflects the K-12 education comfortability of spending their funding. Edweek found that “the portion of company officials
predicting higher investments over the next 6-12 months has jumped at least 16 percent from two years ago.”
Education companies should be ready to discuss their strengths when approaching potential clients. The federal funding cliff could impact new sales, but providing opportunities to supplement services to school districts is ripe at the current moment.
Are you ready to learn more about how to sell appropriately to educators? Then, reach out to agile education today.
