Middle School students sit in a recently constructed classroom in Strayer Hall. Remodeling spaces, such as Strayer and Doc Wilson Hall, was a major expense in bringing students and teachers back to school safely for in-person learning last fall.
Persevering in a pandemic world: Masters’ pandemic finances, June-Dec 2020
In economics, there’s the concept of the price maker and the price taker. Price makers influence the market price and enjoy pricing power, but price takers must accept the prevailing market price.
Independent schools are used to being the price makers, according to Masters’ Chief Financial Officer Ed Biddle. But during the COVID-19 pandemic, they have been forced to be price takers.
“When you’re a price maker, you can go out to five people and say ‘give me your best price’ and you can choose the best deal,” Biddle said. “But with Covid, we [Masters] have had to be a price taker. If we needed 15 sheets of four by six plexiglass and we find one place that has it, we had to do it right away.”
This new role was uncomfortable for Biddle, who is used to planning out the annual budget far in advance.
“When you’re a price taker, that control over the expense lines vanishes. You can’t put plexiglass on five out of eight tables because you only set aside $6,000. You have to do all the tables,” Biddle said. “You thought that the budget was only going to be $6,000, but it’s actually $10,000. You don’t have a choice. You don’t have time to call five other suppliers and get a better price. You have to be bold enough to act proactively and recognize that this is an incredibly unusual circumstance.”
As the school began to make arrangements for students and faculty to return to campus in the fall of 2020, Biddle and his team said the cumulative effect of the ‘price taker’ actions outlined in this report were unpredictable, and at times difficult to see pile up, but that they were necessary to maintain the academic program to the highest standard possible.
Check out the mutlimedia piece above to read about the school’s pandemic response from June-Dec 2020.