How to make Cash Outs Work


If you can keep a steady flow of new students coming in, an ideal situation is high cash outs and high monthly billing.  정보이용료 현금화 This is being accomplished by some schools that take a somewhat unconventional approach to their cash out and upgrade strategies. This may seem to contradict my previous suggestion that monthly tuition is the lifeblood of the school, but it doesn’t. What makes this work for the long haul is the high monthly billing. This is simply a different and somewhat riskier way of getting a high monthly cash flow and high cash outs.

It’s no secret that students are at a high risk for dropping out in the first 90 days. Coming to class twice a week adds a new stress to life for a student, and it takes a little time to get in the habit. For this reason, there is a fiscal logic for attempting to cash out students during this period, because a percentage of them will stop attending anyway; and when they stop, so does your cash flow from them. The danger is in cashing out all of your new students and not having new ones coming in or a way to get the cashed-out students paying again.

Here is a strategy that works remarkably well. Again, be careful, because it can blow up in your face big time, and it has been the ruin of many schools. You can’t just cash students out. You must work the upgrades and market for new students just as hard as the cash outs.

Cashing Out The first Program

Let’s say your students join on a 12-month agreement that is $199 down and $150 per month for 11 months, which totals $1, 849. That would be your base tuition with no discounts. Some students will take this offer.

You also offer a 10-percent discount for early payment, which might be five equal monthly payments of $332, which totals $1, 660.

You offer a third choice, which is $1, 399 in full, a $450 savings over the monthly option. This is the program you may really want your students to take and, with this kind of savings, many will. Let’s compare some numbers to illustrate the pros and cons of this.

If 10 students join in a month on the standard $199 down and $150 per month program, you will get $1, 990 in down payments, and your monthly cash flow technically should increase by $1, 500. I say technically because no one collects 100 percent of their monthly tuition. The reality is that some students will drop out, while others will bounce their payment so, with each passing month, that $1, 500 that was supposed to come to you will dwindle.

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