Issue link: https://nebusinessmedia.uberflip.com/i/1399624
7 HARTFORDBUSINESS.COM | AUGUST 9, 2021 ON THE RECORD | Q&A A CPA firm you can bank on As a full-service accounting firm, we offer a depth of assurance, advisory, and tax services comparable to what national firms provide, but with the undivided attention and care for detail that we would expect for our own ventures. Contact us today to see how we can help you. FMLCPAS.com|860-657-3651 Glastonbury • Enfield • New Haven Stamford • Stafford Springs uncertainty around the school's future. Before we came in there was uncertainty about whether they were going to survive. We did lose some students but we are hoping to get them back pretty quick, maybe not all by the fall. In our business plan that might mean we take a loss over the course of the first year and we'll be back in the black by year two. Q: So, what is the business plan to make this work? How do you turn around Bridgeport? This is a school that is head and shoulders above most in the state when it comes to STEM subjects, engineering and education and yet their previous plan was to think of themselves more as a liberal arts school. From business terms, if you go to a liberal arts school you are commoditizing yourself. There are a lot of good liberal arts schools in this part of the planet and so they are not going to compete head-to-head with Sacred Heart or Fairfield University, so what you end up doing is you try to pivot to something that you are not going to be the best at. As a result you have to create incentives for people to come there, which means you must discount tuition. And so the plan they were doing wasn't very good. We are pivoting back very strongly into their pre-professional, more technical areas and not wasting as much energy to maintain liberal arts majors. In fact, they had majors in art and music, which does not fit our mission, and so those subjects we actually partnered with Paier College of Art and they've picked up that building and those programs. There will be other colleges that I believe will step in and think about programming on the Bridgeport campus. Q: How is the business going to change? We are going to focus better on what the product is, focus better on admitting students and finding more of them. We are good at that at Goodwin. We are very cutting edge when it comes to our marketing and admissions processes. We actually cut out a lot of legacy expenses at Bridgeport. You had a lot of departments with budgets for things they hadn't bought in years but they were still spending the money. Over the last few years they had financial difficulties and the cutting they did wasn't very strategic. It was emergency cuts, and they were chopping out people. We are able to stop and be more deliberate. In the process, we've kept 90% of the staff who wanted to come over. But we've also changed our expectations of them. FY 2018 FY 2019 FY 2018 FY 2019 Total revenues and investment gain $82,057,000 $76,880,000 Total revenues and investment gain $98,076,000 $91,964,000 Total expenses $65,766,000 $73,835,000 Total expenses $106,741,000 $100,727,000 Other gains ($130,000) $200,000 Surplus (or loss) $16,161,000 $3,245,000 Surplus (or loss) ($8,665,000) (-$8,763,000) University of Bridgeport Goodwin University FINANCIAL SNAPSHOTS A professor at a normal school teaches three or four classes a semester in two semesters. We run three semesters and the University of Bridgeport has now switched to a three-semester system. If you look at someone teaching four classes you already increased their output by 50% when you have three semesters vs. two. That alone changes the expense model. Q: What's the market potential in the Bridgeport area? The University of Bridgeport is give or take 4,100 students. Bridgeport in its heyday had 10,000 students so this is a school that is much smaller for a lot of good reasons, but our aim is to get enrollment to 4,500 to 5,000 within a year. Bridgeport also has a history of attracting international students. There are hundreds of students in its engineering program that come in from India, China and Saudi Arabia because it's a world-renowned program. When President Trump came into office he made the country less attractive to foreign students and so many rerouted and went elsewhere, then COVID made it even harder to go to U.S. universities, so Bridgeport lost a huge part of its international student population, which we believe is going to thunder back. There are hundreds of international students in the admissions pipeline. We also plan to grow our student population with the introduction of part-time programs. Most of Goodwin's students are all part time. In Bridgeport most students are traditional, full-time students, but that pie is shrinking. Being able to offer the part-time, adult market will be a brand new avenue in Bridgeport. Q: How do you measure the success of this deal? The first marker is we have to be running in the black. This can't be a charity case of another charity. My board will be upset if this drains us in any way. In the first year we have expectations that we can't make up all the lost ground. We need a full business cycle to really come home so by the fall of 2022 Bridgeport will be humming. There is deferred maintenance that has to be done at the Bridgeport campus, there's new programs that have been on the drawing board but no one has been able to pull the trigger. The impact that we will be able to have down there will be impressive. Q: Why did the Department of Economic and Community Development get involved in this deal? They were involved because if the University of Bridgeport failed, the repercussions would be enormous. If the place closes, because of the uniqueness of some of its programs, there would be no other place to go in the state. Getting DECD involved gave more comfort to my board that there were more resources to put into the deal so we didn't deplete ourselves and it also gave comfort to our banks. It helped to cement the deal. I don't think this deal could have been done without the state.