Does discounting to fill the room ever work?
Fee down the side, enrollment across the top, surplus in every cell. The break-even line runs diagonally across the grid, and the corner where cheap meets small is the one this business cannot survive.
Words on this sheet
- Venue: The place an event is held. A venue line is what hiring it costs, usually a fixed amount whatever the turnout.
- Contribution: What is left of the income after the costs that come with it, before the fixed costs are paid.
School Starter Data Table free
After you install, this is the model to open.
What Does the Course Have to Charge?
- In your spreadsheet, click the Sortia icon in the strip of icons down the right-hand edge. No strip? Click the arrow at the bottom-right to open it. You can also use Extensions, then Sortia, then Open Sortia.
- Click Start from a template and put that name in the search box.
- Pick the card with that name and click Load this template. It arrives on a new tab with real numbers already in it.
The answer
- The plan as it stands
- $440 surplus at $480 and twenty students
- Break-even at $480
- 19.0 students: one dropout from losing money
- Raise the fee to $640
- 14.0 students cover it; at $320 it takes 30
- The killing corner
- -$5,016 $320 with twelve students, the worst cell on the grid
Plain answer: at today's $480 fee and 20 students the course clears $440; the danger zone is a low fee with a small class, which loses money outright rather than just clearing less. A four-day professional short course is one of the simplest businesses there is: $8,400 of fixed cost (the Tutor fee, Venue hire and Marketing lines added together) that happens whether one person turns up or thirty, $38 a head of materials and catering that only happens if they do, and everything else is the fee.
The sheet opens at $480 for twenty students. That returns $440 of surplus, and the break-even row reads 19.0 students, which in practice means twenty, because nineteen students at this fee leave you two dollars short. The course as planned is one dropout away from losing money. Click Run and the table fills in the surplus for every fee from $320 to $640 against every class size from 12 to 32, fifty-four recalculations through the real model.
What you are looking at is a line running diagonally across the grid, the boundary between the losses in the top left and the surpluses in the bottom right, and that line is the answer. At $320 you need 30 students. At $400 you need 24. At $480 you need 20. At $640 you need 14. Two things fall out of that. The first is that the fee moves break-even much faster than it feels like it should: every extra dollar of fee is a whole dollar of contribution, because the only cost that follows a student is the $38, so a 20% rise from $400 to $480 takes break-even from 23.2 students to 19.0.
The second is that the top-left corner is where courses actually die. At $320 with twelve students you lose $5,016, and no amount of running it again fixes that, because twelve students at $320 do not cover a tutor. Cheap and small is the one combination this business cannot survive, and a provider who discounts to fill a room is walking into the worst cell on the grid.
Run it a second time with the tutor fee changed to $6,000, which is what a name costs, and the whole grid shifts down by $1,800: break-even at $480 goes from 19.0 students to 23.1, so that name has to bring four extra bookings before it pays for itself, and any more than that is profit. What the sheet cannot tell you is how enrollment responds to the fee, and the two are obviously not independent.
The grid gives you the arithmetic; you still supply the judgment about which cells you can actually reach. To make it yours, put your own tutor, venue and marketing figures into the three cost lines above the fixed-cost row, and your own per-head cost into the materials and catering line.
The model
It arrives on a tab called Template: Fee and Enrolment:
| Fee per student ($) | 480 |
| Students enrolled (count) | 20 |
| Tutor fee ($) | 4200 |
| Venue hire ($) | 1800 |
| Marketing ($) | 2400 |
| Fixed cost ($) | 8,400 |
| Materials and catering a student ($) | 38 |
| Fee income ($) | 9,600 |
| Variable cost ($) | 760 |
| Contribution a student ($) | 442 |
| Surplus ($) | 440 |
| Break-even students (count) | 19 |
plus 1 more rows on the sheet.
Once it is in your sheet
- The model arrives with real numbers in it and runs as it stands, so you can press the button first and understand it second.
- Change the numbers to yours. The sheet marks which cells are inputs and which hold formulas, and most labels carry a note explaining the row.
- Press the run button at the bottom of the panel. It is labeled for the tool you are in, and the result lands on its own tab, with a written reading of it beside the figures.
Never used Google Sheets? Start here goes the whole way, in seven steps, and assumes nothing.
Next question
- Is an equal share of the work actually fair?Share the Marking Fairly
- Did the course work or do the students just differ?Did the Course Move the Scores?
- Would more places actually fix the shortfall?Will the Programme Cover Its Costs?
- Is the cheapest fix on your risk list the best one?What Could Go Wrong This Term?
- Which class should go to the hired hall?Fit the Timetable Without a Clash
- Did the workshop actually move anyone?Did the Training Change Each Person's Score?
Every model like this one, and the method behind them: What-if analysis in Google Sheets.