A.S. business enterprises losing profits

A.S. enterprise revenue carryover has decreased significantly from last year, according to documents the A.S. Council used to draft next year’s operating budget. The slump has raised concerns among current and former A.S. councilmembers over the financial future of student-run business enterprises at the campus.

Greg Dale
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“On a purely observational level, I see us as breaking even or perhaps even dipping below,” 2003-04 A.S. Commissioner of Enterprise Operations Jeremy Cogan said. “In the management of the enterprises there isn’t the level of innovation necessary to keep these profits.”

To stem the decrease in profits, Cogan said the council should take a variety of measures to help jump-start the student-run enterprises.

“In any business you must keep innovating to compete,” Cogan said. “The first thing that needs to happen is to write a full professional business plan outlining the progress for the next four years.”

However, it is unlikely profit margins will continue to fall, according to A.S. Vice President Internal and 2004-05 Commissioner of Enterprise Operations Angela Fornero. Moreover, Fornero also said that much is already being done in an attempt to bolster profits.

“I can guarantee that we have been working closely with the enterprises this year in implementing changes and maximizing profits,” Fornero stated in an e-mail.

Some of the changes include increasing marketing, allowing students to reserve their textbooks online, altering the pricing structure and the exchange policy at A.S. Soft Reserves and attempting to lower overhead costs, according to Fornero. At the center of the financial struggle is Soft Reserves, which, more than any other business, has seen its profits eroded by greater usage of off-campus vendors and the Internet. Soft Reserves sells class readers.

“The last couple of years haven’t been so good for us,” said Soft Reserves Manager Jennifer Mancano. “Thanks to the evil Internet, lots of professors are now doing things online.”

Soft Reserves has also made changes to halt profit losses.

“We have cut back on our student staff, we’re ordering fewer materials, increasing advertisement to professors — we’re trying lots of different things,” Mancano said.

The success of Soft Reserves and other enterprises partly determines funding for A.S. services such as Student-Run Television. If business profits continue to drop, new sources of funding may be necessary for student services.

The A.S. enterprise office is working on a task force that would merge Soft Reserves and A.S. Lecture Notes in order to provide a more efficient service, according to A.S. Commissioner of Enterprise Operations Angela Chen.

“Our main focus this past year and for next year is just to generate profitability, because we haven’t been bringing in the necessary revenue,” she stated in an e-mail.

Despite profit concerns, A.S. enterprises provide a unique learning opportunity for students interested in business, Mancano said.

However, it is unclear whether UCSD can maintain viable student-run businesses.

“I think that a business run by lazy students is doomed to fail, but one run by energetic students is bound to produce some of the most successful businesses ever seen,” Cogan said. “Just think of Steve Jobs and Bill Gates. We’ve got some of that kind of talent at UCSD.”