For educational companies aiming for the best possible valuation, it is critical to demonstrate a sustainable income stream that is scalable, defensible and predictable. In fact, we see about a 30 to 50% premium on the valuation of companies that can sell in this way.
How does a company show a scalable, defensible and predictable income stream? One of the strongest options is via sales to district-level accounts. If school districts are divided into three groups of the top 300 (25k+ enrollments), top 800 (10k to 25k enrollments), and then the remaining 10,000+ (with enrollments below 10k), the first two groups represent about 54% of U.S. students. However, the only real scalable, effective way to reach those top two markets is through field sales; companies that have managed to sell for short-term success into these markets without field sales have found their process is not defensible or predictable.
So the question is – will field sales work for you? There are several points to consider:
Is your product ready? Do you have the district-level reporting, functionality and professional services to support the offering?
Does your company have the patience, capital and leadership to invest in a district-level effort? Planting long-term seeds can take 12 to 18 months to produce. Can you support the sales call process and sales support to build consortiums within districts? Can you recruit and retain personnel qualified to manage longer-term sales relationships?
Can you market to district-level staff with a known, credible brand? Is your company positioned as an expert? Can you provide marketing support for district-level accounts in getting new leads and supporting sales?
Whether your company can answer yes to all these questions today, or is working toward answering yes in the coming years, Arc can provide guidance and expertise in implementing a field sales program – contact us today.