Helping schools do their financial homework so they can focus on teaching is a lesson plan for steady growth at School Business Solutions in St. Paul.
For School Business Solutions, which offers a full, flexible suite of outsourced business management services to school districts and charter schools in Minnesota, the work often begins with a crash course in business plans and cash-flow projections for school administrators and board members.
"It's rewarding to work with educators," said Sandy Schmidt, president of School Business Solutions and formerly a business services director for a K-12 district. "Their passion is to make a difference in children's lives, it's not the business side of the organization. That's the piece we can bring and help give stability to."
With little marketing, the company has grown from seven or eight clients a decade ago, when Schmidt arrived, to 26 today. Schmidt and PJ Voysey, the company's owner and CEO, said new business often comes through referrals from existing clients, who they said were pleased at the company's expert understanding of school finance as well as getting high-quality management services at a reasonable rate. Year-to-year growth often tracks the changing number of charter schools in the state, which Schmidt and Voysey expect will continue to rise.
School Business Solutions has 20 employees, all with extensive school business management experience, Voysey said. Managers include certified public accountants and others with certifications from professional associations such as the Minnesota Association of School Business Officials. The company takes a team-based approach, dedicating specific staff to work with administrators on each school. Services range from planning, budgeting and operations to reporting, payroll and accounting to management consulting.
"Our staff love working with schools and they love education," Voysey said. "Instead of coming to it from the curriculum side, they come to it from the financial side and the business management side."
Sales totaled $1.5 million last year, and are on track to finish between that figure and $2 million this year, Voysey said. Voysey acquired School Business Solutions, founded in 1999, and sister company Ampere, which offers administrative management and support services to professional associations, in a 2010 transaction.
Tight school budgets likely will continue to make School Business Solutions an appealing alternative, Voysey said. "We don't talk a lot about that … but the fact is we believe we can do their services better and cheaper than them having it [done] in-house."
State budget shifts that held back up to 40 percent of school aid in recent years further challenged school budgets and underscored the need for sound finances, Schmidt said. "We develop that budget along with the cash flow that goes out three to five years, so they know what's coming,'' said Schmidt. "But some were caught without that long-term look."
School Business Solutions has strong relationships with banks and other lending sources, Voysey said, and in several cases helped schools get loans to help make up the difference.
Darius Husain, program director at Face to Face Academy, said School Business Solutions had helped the St. Paul charter school, which has 70 students in grades 9-12, avoid borrowing money to shore up its budget while sparing it the expense of hiring two to three employees to manage its finances.
"School Business Solutions has had a role in helping our school build a strong fund balance and maintain a very good cash flow," Husain said. "We've never had to borrow any money despite the fact that 40 percent of our funding has been withheld. … They're providing expertise, knowledge and tools that allow us to see where this budget is going … that's extremely helpful."
Diane Halpin, executive director of Lionsgate Academy, said the charter school in Crystal would not be successful without School Business Solutions, particularly its expertise in special education funding. Close to 95 percent of the school's 161 students receive special education services.
"School Business Solutions has been fundamental in helping us create a solid financial platform, enabling us to focus on our mission," Halpin said.
The expert says: John Stavig, director of the Gary S. Holmes Center for Entrepreneurship at the University of Minnesota's Carlson School of Management, said School Business Solutions is a "great example of a laser-focused business that delivers clear value to a very specific set of customers."
"They've captured only a tiny portion of the addressable market in Minnesota, and should seek to enhance and communicate their value as a thought leader [in this market]," Stavig said. "Referrals from existing customers and audit partners will be essential to drive continuing growth as schools deal with increasingly tight budgets and complex regulations.''
Todd Nelson is a freelance writer in Woodbury. His e-mail address is email@example.com.