Hundreds of new private colleges and universities open every year, but a good number of them end up closing a few years later. Sadly, many of them make common mistakes that can be easily avoided if care is taken upfront. If you're in the market to open a new private university, here are seven mistakes you'll want to avoid:
1. Lacking a Solid Business Plan
A private university is a business; like any business, it needs to have a solid business plan. Business plans talk about how you'll sell yourself, but they also go into great detail on your competition and the local market. A business plan should also talk about money - where you'll get your initial funding and when you'll start seeing a positive investment return.
Creating a comprehensive business plan isn't easy. It's a lot of work, and it's not uncommon for people to discover that their excellent university idea isn't so great after all (or that it's not new). Because of the difficulty, some new university owners make the mistake of jumping right in without a plan—and then wonder why their school failed a few years later.
2. Not studying the market and competition well
Before you open your doors, you need to know who your target market is and what needs they have that aren't being met by the current crop of universities. You also need to understand the competition—not just the other universities, but also different schools that might be able to provide what you're offering.
Look at the niche they're filling and see if that's an area where you want to compete. If not, you need to find a different approach to the market. Don't try to be everything to everyone; instead, focus on a particular group of students or a particular type of education and make sure you do it better than anyone else.
Remember that students learn best from their own experiences and by making mistakes. So don't try to make the learning process too easy or safe; instead, create an environment where students can stretch themselves and grow.
3. Not having enough start-up capital
Another common mistake new university owners make is not having enough money saved up before starting their new university. It takes a lot of money to open a university, and if you don't have enough capital, you're only making things harder for yourself.
Remember that the cost of the university is not just the infrastructure but also the faculty doing all of the teachings. In the early stages, you might have more classes than students, but you'll still need to pay the faculty members for their time.
I'd advise that you start small and only offer a few programs, to begin with. This way, you can focus on quality over quantity and ensure that your university runs smoothly before expanding.
While spending too much and in the wrong place can be detrimental, not spending enough is just as dangerous. A private university is a business that needs to generate revenue to survive. To do this, the university must offer a product that students are willing to pay for.
One of the most critical factors in any university's success is its faculty. Many new private universities make the mistake of hiring inexperienced or unqualified faculty members. This can lead to lower-quality instruction and a poor reputation.
You need to invest in your school to create a product that students are willing to pay for. This means hiring qualified faculty and staff, building a solid curriculum, and investing in your school's infrastructure. Without these investments, your school will be weak and vulnerable to competition.
5. Setting unrealistic goals
Goals are essential for any successful business. They give you something to strive for and help you measure your progress. But setting unrealistic goals can do more harm than good.
Unrealistic goals create a business culture where failure becomes acceptable and when the team realizes there are no consequences for not meeting goals, they'll just start going through the motions. Great organizations know that people are motivated by fully achieving challenging goals regularly.
To avoid this mistake, make sure your goals are specific and measurable enough that you can track progress and evaluate success accurately. You should also identify leading indicators that will give you an early warning when you're off track.
6. Not investing in marketing
One of the most common mistakes universities make is not investing enough in marketing or, worse, not investing in marketing at all.
Many university founders mistakenly believe that “if they build it, students will come” simply based on the programs offered. But that's not always how it works. You need to let people know about your university and what it has to offer.
Unless you invest in a strategic marketing plan, you'll likely struggle to attract students. You need to market to potential students, their parents, and the community at large. The more people who know about your university, the better chance you have of attracting students.
To avoid this mistake, create a comprehensive marketing plan and budget for your university. Make sure to allocate enough resources to reach your target market effectively. Part of your marketing plan needs to discuss the method of promotion. Promotion is perhaps the most crucial aspect of a marketing plan as it will define the different channels you plan on using to reach your target audience.
Your marketing plan should also include a detailed profile of the type of student you're trying to attract. Consider their age, location, gender, interests, and academic achievements. The more specific you can be about your ideal student, the easier it will be to reach them with your marketing message.
A great example of an effective marketing plan is demonstrated by the University of the People located in Pasadena, California. At UoPeople they realized that high tuition fees were blocking access to learning for many. Their idea was to offer a unique solution where students only needed to pay for the tests they were taking, rather than the whole course.
This innovative approach has helped the university to become profitable while also developing a sterling reputation. Combined with a stellar marketing plan, it made UoPeople one of the fastest growing universities in California in record time.
7. Assuming that you are either approved or exempt without applying for state authorization
If opening a private university, you must ensure that you comply with all state regulations. Many of my clients come to me believing that they are already compliant because they have not been fined or penalized by the state. However, just because you've not received a fine yet doesn't mean you comply with state regulations.
Flying under the radar can put your private university at risk if you are ever discovered by the state. Make sure to apply for state authorization as early as possible to avoid any penalties or problems down the road.
Opening a private university is a huge undertaking. But if you do your homework, develop a strong business plan, and surround yourself with the right people, you'll be on your way to success.
While these mistakes are the most common ones, I can help you avoid these or others based on your specific situation. If you need help or want to learn more about opening a private university, I invite you to email me or call me, and I'd be happy to chat with you in more depth.