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This is, coincidentally, one of my better businesses that I would like to have started. This business is what I called, United College. It is a free college (no tuition, fees, or book expenses) that subsists completely off of advertisements, just like network television or radio.
Because this idea will take a bit of space to talk all about, you'll have to click below to read more.
Now that I know that either you're serious about finding out how this idea works, or you're just bored and want something to mock, I'll give you some more details.
Overview: This is a free, online-based, 2-year college which only offers an Associates Degree in General Studies. Although the startup costs will be very high, because of the free publicity and ease of generating advertising partners, the year-to-year growth will be exponential for the first 10 years, and then will start to plateau afterward, with high profits.
The intent of this college is to introduce individuals to a college without the heavy financial burden to find out if college is right for them, and to allow them to get a taste of the different classes available so they may have a better idea of what they are interested in and what they would like to pursue further.
Target Market:Those who would be most interested in this opportunity would be people (both male and female) between the ages of 25 and 45, who have either a High School diploma or GED. These people would have dependents (children and/or spouse), and be going to college either to see if college is right for them, or to initiate a career change without the financial burden.
Because the college will not be regionally accredited for the first 7 years (it takes 7 years to become regionally accredited, meaning that all credits will easily transfer from one institution to another), those who have the funds to attend traditional college will attend there for the prestige associated with that institution. Those attending United College will be those who do not have the initial funds or care to go to a prestigious school.
Startup Costs: The initial startup costs will include (these are all estimates and may change due to suppliers/employees found):
- Design and Build the Website $30,000 (one-time payment)
- Hosting for Website (Dedicated servers) $500/month
- Payroll $30,000/month
- Business Entity Setup/Licenses/Other Required Info $2,000/year
The initial amount of funding needed prior to anything else (just making sure that everything is set up and able to function) will be higher than normal, but they are essential to making sure that the school will be able to succeed.
Once the college is formed, the resulting costs will include (again, these are all estimates and may change due to suppliers/employees found):
- Professors $6,000 per class per semester
- Teachers Assistants $12,000 (2 TA's per class) per class per semester
- Textbooks $75/book (Publishers will give a 25% discount to schools to purchase books. The cost is assuming that each book will cost $100, but they will most likely be cheaper)
- Additional Payroll $50,000/month
There will be additional costs with additional employees in order to facilitate better efficiency and organization. Those costs should cover the most basic aspects.
The anticipated yearly expenses are expected to be:
Year 1: $3 Million
Year 2: $5 Million
Year 3: $6 Million
Year 4: $7 Million
Year 5: $7.5 Million
With each subsequent year seeing expenses increase at almost $500,000 per year until year 10 (due to expansion into additional geographic markets), where the expenses should level off due to the size and purchasing power of the college.
Revenue: Revenue is based on three sources:
United College is built on the same model as network television or radio, which is that the more visitors you have to your establishment (television or radio stations), the more advertisers will be willing to pay. Because United College is based online, there will be a rapt audience who will be receptive to the messages of advertisers.
Advertisements are the primary method which United College will utilize to generate revenue. The advertisements will be placed strategically within the website, applications, forms, textbooks, and other venues so that advertisers will feel that they are receiving the best value for what they pay.
Donations are another method which will generate revenue. There are many philanthropic people and organizations which will be more than happy to donate to an institution which will allow for a more educated and useful society in general. As long as they get classes, departments, textbooks, or other venues named after them, they'll be willing to donate thousands, if not millions of dollars to United College.
The Government is always willing to give grants to ventures which will help those who are too financially destitute to enable themselves to go to school. Grants are available every year to establish and uphold institutions which allow the poor to get a better education. Since this is completely free, the government will be very willing to give grants to ensure its viability.
The anticipated yearly revenue is expected to be:
Year 1: $3.2 Million
Year 2: $4.7 Million
Year 3: $6.3 Million
Year 4: $7 Million
Year 5: $8 Million
Each subsequent year should see significant revenue growth due to the geographic expansion and expanding marketing base. This will continue until United College has gone nation-wide, and will then plateau.
Placement of Advertisements:
Advertisements will not be placed everywhere. Salespeople will sell the advertising space to businesses, and let them know that the advertisements will only be shown to those who are geographically near (either through geo-mobile placement, or those who live within a certain radius) to where the business is located. There will be additional options for those businesses with national, regional, or internet-based purchases.
Advertisements will be shown as often as possible in either a Google AdWords auction-style format, or as a traditional format with rotating advertisements that get charged a flat rate. Either system will be effective, but after some testing, we will be able to find out which format will generate the best value for both United College and the advertisers.
The placement of advertisements must not take away from the learning experience that students will get. If the placement is obtrusive or distracting, then it will discredit the value and learning experience of United College.
Organization Structure: The following is the basic structure which I came up with (you can change it as much or as little as you like. I didn't get that far into it, which is why this is very detailed—actually, it's not very detailed at all!):
|Advisers||Get Advertisers||TAs||Technical Aspects||Firing|
*Departments are in bold, while duties are not in bold
Well, that's all I have for you in regards to this business. I didn't have the time necessary to put together something more comprehensive, so, you get to do that! Good luck with that!
If you made it through this whole thing, I feel kind of sorry for you—it was a beast to write, so it was probably a beast to read. Anyway, thanks for reading it. If you want to leave me any feedback, you're welcome to, but if you get no response, just remember that it was sent to The Big, Round Filing Folder.