Q: LERN Report:  Effectiveness in Management The first line of the report says the following: “The most successful continuing education divisions generate 0 to 10% in profits in a good year.” What is the basis of the statement?

A: 1.LERN was founded in 1974 and since 1974 has tracked industry benchmarks with profitability or net being one of the benchmarks.

2.Every year LERN members ask LERN to review their finances and report back on how their numbers match up to industry benchmarks.

3.Back in the 1980s, LERN developed the LERN Financial Format so LERN could take finances from programs and “load” the numbers into the format. For more information on the LERN Financial Format, I suggest you consider purchasing LERN’s Financial Handbook.

4.Besides gathering information from member requests, LERN also performs up to 30 Program Reviews a year. The Program Reviews are in-depth reviews of a program which includes reviewing their finances.

5.Many continuing education program lose money, but those that make money normally make 0-10% at the end of year.

6.When analyzing finances it is VERY IMPORTANT to include all expenses, even if your institution does not. So yes, your net would be stronger if you did not pay for marketing costs and/or certain staffing positions. But if you cover all costs (and I am not including indirect costs such as electricity, a percentage of the President’s salary, and so on…LERN calls these costs contributions and does not believe continuing education should be charged these indirect costs), then a 0-10% net is good.

7.Some programs have a stronger net, but they are more the exception.

8.Continuing education programs are not cash cows, but instead small businesses. Any small business would be thrilled with a 0-10% net.