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University Parent, Inc. Fesehaye Abrhaley, Michelle Dorenkamp, Kara Grinnell, Ryan Roth and Sarah Schupp April 21, 2004
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Product/Service Description UPI sells website and magazine advertising to businesses interested in marketing to parents of college students UPI produces 3 guides per year for each location Guide provides comprehensive information: Details on university and surrounding community Parenting tips Website, www.universityparent.comwww.universityparent.com
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Opportunity $70 million dollar market opportunity 95% of college parents want to be more informed No publication addresses their needs/wants 35 businesses have already purchased advertising in the 2nd Parent’s Guide to Boulder 100% of Fall ‘03 advertisers purchased an ad in the Summer ‘04 guide
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Need Connecting with students Parents stay informed Money Savings/Ability to plan ahead Convenience/Portability Parents Building image Generating revenue Businesses
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Target Market Parents of… College students/prospective students Parents who… Visit campus Are involved Advertisers trying to reach… Middle to upper-middle class adults Who are typically college educated With means to send their kids to college
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Test Market Competition No DIRECT competition Indirect competition Colorado Daily Daily Camera Boulder Magazine Ralphie’s Guide Competition will vary at every campus
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Competitive Advantage Specialized niche No one currently reaches Proven track record Relationship with 35 advertisers Distribution Agreements with university, local businesses
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Key Marketing Strategies Parents Distribution: campus, hotels, & restaurants WebLogs Advertisers Direct Mail Relationship Building Awards
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Risks ProblemSolution Duplication by competitorsEstablish brand, quick national roll-out Universities uncooperativeContact universities for permission before expanding, Internships Insufficient ad salesProve ROI, diversify revenue between national and local advertising
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National Roll-out Year 1: 3 Schools
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National Roll-out Year 2: 9 Schools
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National Roll-out Year 3: 22 Schools
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National Roll-out Year 4: 32 Schools
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National Roll-out Year 5: 44 Schools
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Revenue Revenue (In thousands $) Revenue Model 50% Print Ad Sales 50% Web Ad Sales Forecast & Growth 40% Avg. Growth Rate $12.3 MM Sales in Year 5 Revenue (in thousands) $
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Profitability Net Income (In thousands $) Breakeven February of Year 2 Cost Drivers Salaries & Wages Printing
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Cash Flow 012345 Year Operating Cash Flows (In thousands $) Year 0 $500,000 from investors $30,000 from founders Major uses Expansion Major Source Increase in ad revenues Year
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Funding Investment Requirements $500,000 for 35% of the company 60% IRR Will fund: hiring of new employees, regional office, and expansion to DU, CSU Valuation Market value of $70 million in Year 5 Industry P/E ratio of 17.3.
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