Thread: Starting a college as a business

Has anyone worked high up in a college(to know the financials) and/or looked into starting a college as a way to make income. It seems like it would be a huge cash cow, and it's something that always has demand, since it's basically what people do after high school whether they want it or not. I know nothing about the the financials or colleges though so would be curious to hear from anyone who does. Is there some crazy hoops to jump through to be considered a college?

Watch the movie "Accepted" with Justin Long and Jonah Hill! It may be easier then you think! lol

Originally Posted by Pinnacle

I have seen a copy of the rules and regulations of their accrediting agency

what type of rules and regulations were there?

Originally Posted by Pinnacle

Are we talking about a public or a private college?

private

Originally Posted by Pinnacle

This is very doable and can be VERY profitable.

Ya, it seems like it would be. What types of numbers were you aware of that the school you worked for was doing?

Originally Posted by jportz

I was suprised to learn that only ~30% of high school graduates attend college.

what's the source for that #? That seems very low.

If someone was to start a college they wouldn't be targeting the areas where people can't afford college, etc... so I don't think the overall % matters too much, although it seems like it would be higher than that. Just with a quick search in 2008 the state of NC was 76% for people who went onto higher education after high school.(which I assume might include trade schools along with colleges) At our high school I think our class was around 95% who went on to college. If any area was near 30% I'd assume that wouldn't be the best spot for a college.

what prank are you up to now Bill?

Just kidding!

I suppose if you factor in drop out rate. In my High School dropout rate was over 50%, but like you said you probably wouldn't focus on those areas.

I have had a few conversations about this with teachers in the past. They can gobble up tons of profit especially if quality is lax. If you will accept anyone and provide a quick-fix then the income can sky rocket.

Reminds me a lot of the martial arts business. If you provide a belt factory it's real simple to achieve a million-dollar income. If you want to provide quality (my route) it takes quite a bit more work for half of that.

Originally Posted by randallg99

talking with the Goddard school franchise may provide alot of info (despite it being preschool)

private college education is a big business today.... unemployment market is driving enrollment through the roof

Just with some quick searching looks like to get into their franchise the start up is around $650,000. Looks like franchise fee is $135k and the rest I assume is for the real estate, administration fees, etc... I'll probably call them to check it out.

Originally Posted by Kung Fu Steve

what prank are you up to now Bill?

This is just a curiosity one nothing I'm actively pursuing. Just seems like an insane cash cow since you have absurd amounts of people looking for colleges every year and a lot of the colleges aren't doing a lot to differentiate themselves from all the other colleges. If you had a small college with 1,000 students and they were paying you $25k/year it's $25,000,000/year in revenue.(I know that doesn't factor in scholarships, loans that don't pay, etc..) Then figure the cost of administration, upkeep of the campus, the initial real estate costs etc... and it seems like you'd be keeping a big chunk of that $25m each year, but I'm sure there's a ton I'm not thinking of since I've never looked into the financials of a college and what other costs there are. So it's just a curiosity thing but I'm pretty curious since you never hear people speak about this as a potential business, but it seems like it could be a good one.

Originally Posted by Kung Fu Steve

I have had a few conversations about this with teachers in the past. They can gobble up tons of profit especially if quality is lax. If you will accept anyone and provide a quick-fix then the income can sky rocket.

This is the other thing that crossed my mind when thinking about it. What's to stop colleges run as a business from letting in however many people they need to reach their desired profits, even if they aren't good students. There's plenty of people who have trouble getting into college, and would love to get an acceptance letter from someone.

Originally Posted by Pinnacle

I believe I remember them bringing in about $50 - 70 million a year and growing.

sick

Originally Posted by Pinnacle

When Champagne was CEO, I think he and the CFO paid themselves $1 million each (salary/bonus combination) one year. But, ITTESI is also publicly-traded--so take that into account as well.

Ya, I was wondering who makes the money at a lot of these schools if they aren't publicly traded. You never hear about people making a killing from colleges but it seems like someone has to. Obviously have never looked into it, but you only ever hear of the president of the school, never the "owner(s)."

Originally Posted by Kung Fu Steve

what prank are you up to now Bill?

Just kidding!

Is this in any way related to your army of homeless poker bums?

Besides the tuition, don't forget to include revenue from dorms, meal plans, selling Snowbank U sweatshirts etc.

beat me to it- i thought this was the plan?

i think a niche product that teaches skills such as poker as a profession and not just another "diploma mill" is the way to go! For my j.o.b. I work with colleges and universities and one of my coworkers actually works with for-profit schools and I know that there are plenty of tech expenses for your Kaplans, AIUs, Devrys, etc... but it also means that these schools are raking in due to education being in demand in good and bad economies(moreso in bad).

Man, I think niche colleges, especially institutions that offer distance learning, are a huge opportunity. With the massive changes in our economy and technology, learning new skills is going to continue being in high demand. Sorry I cannot offer any advice on implementation, only encouragement that it sounds like a great area to focus. My two cents...