Factors determining the profitability of a commercial enterprise at a higher educational institution

Abstract

Nine critical factors were identified by means of a literature study, as being imperative to the success of any third income stream initiative. These success factors were identified as sound administration, a strategic vision with goals and objectives, an innovative and entrepreneurial approach, aligned commitment, motivated employees, partnership with the community, globalisation, an academic heartland and service delivery. Two income stream initiatives, namely the Centre for Rapid Prototyping and Manufacturing (CRPM) and Centre for the Built Environment (CBE) at the Central University of Technology, Free State (CUT) were investigated for the existence of the identified factors. Before the existence of the success factors could be evaluated, the relative profitability or success of the two ventures had to be determined. An interview with managing personnel of the initiatives, was used to determine the relative success or profitability of the two initiatives. It was established that both initiatives could be considered as being profitable since they had a positive cash flow, the income and assets grew since the incorporation of the initiatives and the ventures contributed positively towards the academic education of students. The existence of each identified success factor was determined by means of a questionnaire which was completed by staff members of the university who were actively involved in the activities of the CRPM and CBE. The overall conclusion that could be made was that the nine critical success factors identified in the literature study, as being imperative to the success of a commercial venture, were indeed present at these two profitable and successful third income stream initiatives. It could therefore be concluded that the factors identified in the literature study were indeed critical factors, necessary to ensure success and profitability of a commercial venture which is part of a higher education institution.