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Having spent 11 years as a FE lecturer, and a further 20 running my own L&D business, I was recently appointed on a 1-year contract to set up and manage a Business Development Unit (BDU) within a FE College.

Like most others, this FE College is under pressure to wipe its own nose – to make money, and contribute to the bottom line. In effect, this new BDU is a free-standing profit centre within the college.

So what are the key benefits and challenges, and my top tips for anyone thinking of doing the same?

The first point to make is that the BDU is a profit centre, not an income-generating centre. It HAS to contribute profit, not revenue or income. All directly attributable costs – including marketing and promotion – have to be met from the Unit’s income.

However, there are clearly advantages of being sited within the College. The Unit has access to facilities which are already part of the College provision; central services, such as copying, and corporate marketing; of particular benefit is access to rooms, one of which has been refurbished to be more appropriate as a business centre. Were the Unit to be entirely free standing, these costs would have to be paid for from the Unit’s budget.

This BDU is targeted to make a profit (not income) of £200,000 over 12 months. The Unit’s main business activity is a combination of short courses, in house courses, internally sourced specialist provision, and partnership working. Funding is entirely from the commercial sector, or through grants.

All the staff who provide the short and in-house courses are bought in, through my contacts; we cannot of course disrupt the core business of the College – teaching students. And they have to be paid a commercial rate. I will provide a lot of that training myself, and my ‘fee’ is already covered though my initial contract.

We do use staff – but to provide commercial options of the courses they run for students – for example, Hair and Beauty. They can resource these courses themselves, and charge a fee, but this has to be done in non-teaching time: evenings, weekends and holidays.

As a brand new College ‘offer’, a key challenge is to persuade the commercial world that we are a serious provider of business services.

Colleges are traditionally seen in the market as a place for teaching students, not providing commercial learning opportunities for company staff. So we have to spend time repositioning this aspect of the College, through visiting, networking, and offering loss leaders to show ‘we mean business’.

This ‘repositioning’ of the college’s business has to work internally as well as externally. For example, the BDU and its provision has to be responsive and flexible, operating pretty much a 24/7/365 operation – as we do: for the BDU, term times don’t exist!

We have to change our vocabulary too; we cannot think in terms of ‘syllabus’ or ‘curriculum, or ‘teaching’ or ‘course levels’ for example; and we have to follow and support the demand where and how it is required. In that real sense we are separated from mainstream college teaching – one reason (and benefit) of using non-College staff for most of the Unit’s provision: there is then no conflict of interest.

The potential benefits are of course, massive: there is real demand in the market place for high quality, cost effective provision, which is something we can offer.

Since most of our costs are in staffing, and they will occur only if the course is viable, there is low risk of wasting money; every course that runs will make a profit – otherwise it won’t run. If (and when) successful, the BDU can and will be a significant contributor to the college and the local economy, and be an alternative route to addressing local and regional skills shortages. And over time, there are few boundaries to its commercial operations: we are close to London, and all that implies. We are already planning programmes to take advantage of the huge market of temporary overseas visitors, for example, and developing e-products which could be accessed anywhere in the world…

So for any college thinking of embarking on similar lines, here are my top 10 tips to help you be successful:

  1. Set up a separate BDU or equivalent, with clear financial targets, budget and lines of accountability
  2. Focus on profit, not income
  3. Be clear what is a ‘corporate cost’ with no charge to the BDU, and what costs the BDU will have to meet from its own budget
  4. Be clear about your USP: what separates you from your (many) competitors?
  5. Make it clear to everyone that provision has to be profitable: no profit, no provision
  6. Be business focused, using business language and business-like premises for example
  7. Use separate providers, to avoid conflict of interest
  8. Offer early incentives to raise awareness and bring people in – but ensure these are budgeted for
  9. Enable and encourage all college staff to be your promotional/sales force
  10. Ensure you have the full and active support of your Board and Senior Leadership Team – as we do….

Arnie Skelton, Head of Business Development Unit, Epping Forest College

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