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A diversified AORN manages a challenging year
JANUARY 2000, VOL 71, NO 1 TREASURER’S
REPORT
A diversified AORN
manages a challenging year T hewhich1998-1999 fiscal year, ended June 30, 1999,
growth came from advertising and Opportunity programs while revenue from educationprograms and was a challenging year for services remained flat. Highlights the Association. As reported at include the following. Congress in San Francisco, our subsidiary, Education Design, Opportunity. Opportunity, A 0 R ” s job placement and interInc, had a difficult first eight im management program, continmonths that led to significant ues to be extremely successful. losses for the company. Luckily, AORN and our other subsidiary, This service provides great value to our members, the participating Association Technology institutions, and the Association. Solutions, tempered the loss Opportunity’s revenues increased from Education Design by continuing with strong performancby 138%this fiscal year. Advertising. Advertising reves. The varying levels of perenues grew by 19%. This is the formance by our three compasecond consecutive year for nies reflect the sound principles of diversification that are so strong advertising revenue. This is a reflection of the growth in important in today’s challenging environment. Our results also advertising in Surgical Services Management and the improving were affected by slightly lower membership numbers, increased job market that results in classiexpenses associated with fied advertising for periopetative nurses. Congress being held in San Membership. Membership Francisco, and stable but flat results from our other education- decreased slightly during the year, mainly as a result of members al offerings. The slowing growth of revenue retiring. The resulting revenue from our core business practices loss from this decrease, however, highlights the need for AORN to was offset by the number of memcontinue to explore increasing our bers joining specialty assemblies. traditional and alternative sources Currently, approximately 20%of of revenue while ensuring that we AORN members now belong to continue to provide valuable and one or more of the specialty assemblies. meaningfil services to our members. In this article, I will address Congress. Congress again each company’sperformance and was very successful for the provide you with a glimpse into Association. Congress continues its future. to contribute a significant portion of revenue to AORN’s bottom line. San Francisco, like Orlando, AORN was chosen as a site for Congress AORN had another good year, achieving 2.6% in net income over based on membership feedback to expenses. Significant revenue explore new sites. Unfortunately, 36 AORN JOURNAL
the Congress held in San Francisco was not as successful as the Congress held in Orlando. Attendance was down slightly from the Orlando Congress, and expenses were somewhat higher. legislative activities. AORN expanded its legislative presence and money spent on lobbyists by 155%. This action reflects our commitment to ensuring safe patient care on federal and state levels. Legislative activities continue to be a strong priority for the Association. AORN remains a healthy and strong organization. The current perioperative environment is presenting us with opportunities to defray costs through increased advertising and job placement revenues. With the key indicators of membership and Congress remaining stable but flat, it will be a challenge to increase services to members without finding new sources of revenue. EDUCATION DESIGN Education Design’s revenues were down by 10% this year, and it experienced a growth in expenses. Education Design experienced troubles after initiating efforts to rapidly expand into new methods of providing educational opportunities to the health care community. Unfortunately, Education Design experienced significant startup costs without ensuring a timely return on its investments. The AORN Board became aware of Education Design’s
JANUARY 2000, VOL 71, NO 1
situation as soon as a trend developed in the company’s financial performance. The Board acted quickly to resolve the situation. New leadership was installed at Education Design. The new initiative was scaled back quickly, and expenses were reduced significantly. Contact was reestablished with Education Design’s core customers and the business was put back into order. Education Design finished the year on a strong note. Under new leadership, Education Design staff members quickly affected Education Design’s bottom line. The company experienced $1.6 million in sales in the last four months of the year, which translated into $300,000 in profit during that same period. The quick reduction of expenses reduced the losses from the previous eight months. Education Design appears to be back on track. Expenses have been trimmed, and revenue is returning to the company from its traditional customer base. Education Design had strong results from the development of exhibit floor contact hours at Congress and from the development of the training program for sales representatives in the OR, Operating Room Protocol for Medical Industry Professionals. ASSOCIATlON TECHNOLOGY SOLUTIONS Association Technology Solutions (ATS) is the second for-profit subsidiary of AORN. Its core business is to sell the association management software used by AORN. The company achieved $1.2 million in
sales this year, increasing its revenue by 71% and contributing to AORN’s bottom line. This strong growth is expected to continue. AORN therefore used a portion of this revenue to expand and strengthen ATS ’s infrastructure. This positioned ATS to continue to provide a strong return on our investment.
SUMMARY It is a fact that every year expenses go up. We experience this in our homes and at work. AORN is not different. The Association is faced with the challenge of providing quality service in an environment of limited revenue. Sound familiar? The key to successful financial management is to spread your risk through diversification and to take reasonable risks for a fair return on investment. This year, Education Design attempted to explore a new revenue source for the Association. This effort did not achieve satisfactory results. Your Board and leadership staff members acted quickly to limit the risk associated with this venture, and our policy of conservative diversification provided a layer of safety to cushion the blow. Education Design is now back on track, ATS is growing, and AORN continues to perform well. Some of you may ask why we focus so much on the bottom line. The straightforward answer is that the need for revenue will never disappear. AORN continues to provide its members with $1.61 of products and services for every dollar spent. AORN needs to make up that $0.61 through some other source. No business, whether for profit or not for profit,
39 AORN JOURNAL
can keep its doors open if it does not meet its expenses and invest in its future. The key is to discover the right mix of diversification and traditional revenues. To help us achieve this goal, AORN developed the position of Executive Vice President of Business Operations. The person in this position works in conjunction with the Executive Director to explore and develop new revenue streams for the Association. This partnership, along with the partnerships between Headquarters staff members, Board members, and other Association volunteers, is critical to AORN’s success. Maintaining a healthy bottom line should matter to every member. A profit means increased benefits and services for members. AORN is able to reinvest its profits back into the Association. These profits allow us to increase our legislative activity, produce world-class educational programs, develop the perioperative nurse-training course, provide free consultation with perioperative nurse experts, and facilitate communication with colleagues across the country through our listserv. With the arrival of the new millennium comes a new way for your Association to conduct business. Creating new leadership, diversifying into new revenue streams, and maintaining our traditional sources of revenue will ensure that AORN remains the premier choice for the educational needs of perioperative nurses. WILLIAM J. DUFM RN, MJ, CNOR
TREASURER
REPORT
A diversified AORN
manages a challenging year T hewhich1998-1999 fiscal year, ended June 30, 1999,
growth came from advertising and Opportunity programs while revenue from educationprograms and was a challenging year for services remained flat. Highlights the Association. As reported at include the following. Congress in San Francisco, our subsidiary, Education Design, Opportunity. Opportunity, A 0 R ” s job placement and interInc, had a difficult first eight im management program, continmonths that led to significant ues to be extremely successful. losses for the company. Luckily, AORN and our other subsidiary, This service provides great value to our members, the participating Association Technology institutions, and the Association. Solutions, tempered the loss Opportunity’s revenues increased from Education Design by continuing with strong performancby 138%this fiscal year. Advertising. Advertising reves. The varying levels of perenues grew by 19%. This is the formance by our three compasecond consecutive year for nies reflect the sound principles of diversification that are so strong advertising revenue. This is a reflection of the growth in important in today’s challenging environment. Our results also advertising in Surgical Services Management and the improving were affected by slightly lower membership numbers, increased job market that results in classiexpenses associated with fied advertising for periopetative nurses. Congress being held in San Membership. Membership Francisco, and stable but flat results from our other education- decreased slightly during the year, mainly as a result of members al offerings. The slowing growth of revenue retiring. The resulting revenue from our core business practices loss from this decrease, however, highlights the need for AORN to was offset by the number of memcontinue to explore increasing our bers joining specialty assemblies. traditional and alternative sources Currently, approximately 20%of of revenue while ensuring that we AORN members now belong to continue to provide valuable and one or more of the specialty assemblies. meaningfil services to our members. In this article, I will address Congress. Congress again each company’sperformance and was very successful for the provide you with a glimpse into Association. Congress continues its future. to contribute a significant portion of revenue to AORN’s bottom line. San Francisco, like Orlando, AORN was chosen as a site for Congress AORN had another good year, achieving 2.6% in net income over based on membership feedback to expenses. Significant revenue explore new sites. Unfortunately, 36 AORN JOURNAL
the Congress held in San Francisco was not as successful as the Congress held in Orlando. Attendance was down slightly from the Orlando Congress, and expenses were somewhat higher. legislative activities. AORN expanded its legislative presence and money spent on lobbyists by 155%. This action reflects our commitment to ensuring safe patient care on federal and state levels. Legislative activities continue to be a strong priority for the Association. AORN remains a healthy and strong organization. The current perioperative environment is presenting us with opportunities to defray costs through increased advertising and job placement revenues. With the key indicators of membership and Congress remaining stable but flat, it will be a challenge to increase services to members without finding new sources of revenue. EDUCATION DESIGN Education Design’s revenues were down by 10% this year, and it experienced a growth in expenses. Education Design experienced troubles after initiating efforts to rapidly expand into new methods of providing educational opportunities to the health care community. Unfortunately, Education Design experienced significant startup costs without ensuring a timely return on its investments. The AORN Board became aware of Education Design’s
JANUARY 2000, VOL 71, NO 1
situation as soon as a trend developed in the company’s financial performance. The Board acted quickly to resolve the situation. New leadership was installed at Education Design. The new initiative was scaled back quickly, and expenses were reduced significantly. Contact was reestablished with Education Design’s core customers and the business was put back into order. Education Design finished the year on a strong note. Under new leadership, Education Design staff members quickly affected Education Design’s bottom line. The company experienced $1.6 million in sales in the last four months of the year, which translated into $300,000 in profit during that same period. The quick reduction of expenses reduced the losses from the previous eight months. Education Design appears to be back on track. Expenses have been trimmed, and revenue is returning to the company from its traditional customer base. Education Design had strong results from the development of exhibit floor contact hours at Congress and from the development of the training program for sales representatives in the OR, Operating Room Protocol for Medical Industry Professionals. ASSOCIATlON TECHNOLOGY SOLUTIONS Association Technology Solutions (ATS) is the second for-profit subsidiary of AORN. Its core business is to sell the association management software used by AORN. The company achieved $1.2 million in
sales this year, increasing its revenue by 71% and contributing to AORN’s bottom line. This strong growth is expected to continue. AORN therefore used a portion of this revenue to expand and strengthen ATS ’s infrastructure. This positioned ATS to continue to provide a strong return on our investment.
SUMMARY It is a fact that every year expenses go up. We experience this in our homes and at work. AORN is not different. The Association is faced with the challenge of providing quality service in an environment of limited revenue. Sound familiar? The key to successful financial management is to spread your risk through diversification and to take reasonable risks for a fair return on investment. This year, Education Design attempted to explore a new revenue source for the Association. This effort did not achieve satisfactory results. Your Board and leadership staff members acted quickly to limit the risk associated with this venture, and our policy of conservative diversification provided a layer of safety to cushion the blow. Education Design is now back on track, ATS is growing, and AORN continues to perform well. Some of you may ask why we focus so much on the bottom line. The straightforward answer is that the need for revenue will never disappear. AORN continues to provide its members with $1.61 of products and services for every dollar spent. AORN needs to make up that $0.61 through some other source. No business, whether for profit or not for profit,
39 AORN JOURNAL
can keep its doors open if it does not meet its expenses and invest in its future. The key is to discover the right mix of diversification and traditional revenues. To help us achieve this goal, AORN developed the position of Executive Vice President of Business Operations. The person in this position works in conjunction with the Executive Director to explore and develop new revenue streams for the Association. This partnership, along with the partnerships between Headquarters staff members, Board members, and other Association volunteers, is critical to AORN’s success. Maintaining a healthy bottom line should matter to every member. A profit means increased benefits and services for members. AORN is able to reinvest its profits back into the Association. These profits allow us to increase our legislative activity, produce world-class educational programs, develop the perioperative nurse-training course, provide free consultation with perioperative nurse experts, and facilitate communication with colleagues across the country through our listserv. With the arrival of the new millennium comes a new way for your Association to conduct business. Creating new leadership, diversifying into new revenue streams, and maintaining our traditional sources of revenue will ensure that AORN remains the premier choice for the educational needs of perioperative nurses. WILLIAM J. DUFM RN, MJ, CNOR
TREASURER