2020 Higher Education Outlook: Graduate to Concession FinancingJanuary 14, 2020 | By Wayne O'Neill
Budget concerns. Internal political issues. External economic uncertainty. These — and many other issues — weigh heavily on the mind of a college or university administrator when strategizing methods to grow revenue.
In the day-to-day operations of managing these factors, we understand the challenge of not having enough time to think deeper and broader about revenue-generation options in higher education. Instead of thinking about the typical solution of building another dorm to attract more students, consider options to leverage existing assets on the college campus.
The engine to leverage existing assets is concession financing, which is a major part of the story in the 2020 higher education outlook for university leaders looking to grow revenue.
Why Concession Financing for Colleges and Universities?
College campuses have tremendous assets — buildings, dorms, parking lots, green space, empty land, power generation capabilities, etc. — that often do not generate revenue for the university. These are called stuck assets.
To generate additional revenue, smart higher education administrators are thinking bigger about how to leverage these assets through concession financing.
How this works is universities form an agreement with an organization or company to use the assets. The organization pays a fee to the university for access to and use of the assets. Then, the revenue quickly adds up to create a fresh, powerful revenue stream.
3 Ways to Leverage the Power of a College Campus
There are many different aspects of a college campus that can be leveraged through concession financing to generate additional revenue. Consider three areas that will be important in 2020 and beyond.
1. Mobility and Parking
The college campus is changing. The trends indicate that not as many college students are using traditional transportation methods to enter/leave campus or get around campus.
Many students now expect easy access to transportation such as rideshares, bike rentals, scooters, and weekend vehicles. There is a more communal or shared expectation to mobility compared to previous generations that expected a reliable parking experience.
Smart universities see this as an opportunity to bring a rideshare company such as Uber or Lyft directly to the college campus and receive a fee for service. Or, introduce a new parking system that uses current parking lots and other parking assets for a fee.
Each college campus is different. However, each college campus has the same opportunity to leverage existing mobility and parking assets to generate millions of dollars in revenue for each campus on an annual basis.
2. Increase Revenue to Support Wish List Projects
Increased revenue from leveraging fixed assets — such as through parking and mobility — should be viewed as part of a larger strategy to grow the revenue potential of each campus.
Additional revenue streams are powerful to achieve one end of the spectrum of budget relief. However, they are also powerful on the other end of the spectrum to support wish list projects.
Every university administrator has that wish list project in mind. “If only we had enough revenue and relief from tight budgets, we could pursue or build x, y, or z.”
This highlights another way that concession financing creates value: advancing project scope quicker and more efficiently to get to the wish list projects.
Essentially, concession financing accelerates the timeline of generating additional revenue so that you can start having real internal conversations about the wish list projects that you otherwise never would have discussed when budgets were tighter.
3. Building Cyber Ranges
Now let’s think very specifically about leveraging the power of your college campus by focusing on cybersecurity.
There is a startling gap in the cybersecurity industry where there are not nearly enough qualified cybersecurity workers to meet the need for cybersecurity roles.
The cybersecurity industry is growing at a rapid pace — in both the private sector and in the government — to protect data, systems, and technology from advanced cyber attacks. These entities need well-trained professionals to support cybersecurity efforts.
College campuses represent the ideal breeding ground to train cybersecurity professionals to readily enter the workforce. The question for university leaders is: how do we build this type of training ground?
As part of the larger revenue strategy we talked about, universities that leverage their fixed assets to generate new revenue streams can not only support those wish list projects but also undertake a major new project such as building a cybersecurity training facility.
A cyber range project will turn into a revenue-generation opportunity through valuable partnerships with businesses and government entities that need trained cybersecurity professionals.
2020 Higher Education Outlook: Find New Revenue Opportunities
A new year. A new decade. There are plenty of opportunities for higher education to leverage existing assets to start generating new revenue streams that will pay off this year and in many years to come.
We believe it will be rewarding to look back at the end of the decade to see what you started in 2020 that has matured into strong revenue generation. It starts with a few simple questions:
- What fixed assets can be leveraged as new revenue streams?
- How can these leveraged assets support wish list projects?
- Do we have the capability to build a cybersecurity training facility with additional revenue streams?
Then, consider how concession financing can accelerate the timeline to generate additional revenue and get you closer to wish list projects and considering cybersecurity training facilities on your college campus.
Our firm works directly with service providers and higher education to have productive conversations and build stronger connections that advance scope.
We would appreciate the opportunity to work with your administration to leverage fixed assets. Contact us today to inquire about developing a successful partnership.