UniFuture
Mary Owen and Suyin Li are young mothers. They were forced to give up their jobs when they each
had babies and they are finding that they miss their working lives, with the mental stimulation and
social contact they had enjoyed. Now that their children are about to start school, they want to start a
business in the local area which they can run while their children are at school or when their husbands
are at home to look after the children. They know that local families in the area are relatively wealthy
and, with competition for university entry currently being fierce, parents are willing to pay high fees
in order to give their child any possible advantage. However, increasing numbers of local people are
being made redundant as the recession advances. There are political discussions about increasing
university fees. Universities are cutting places for local students and are taking more full-fee students
from abroad.
Mary was recently left some money when her father died and Suyin had saved some money when she
was working. Suyin used to be a financial advisor and Mary has extensive experience of giving
university and careers advice. They have heard reports that local students need extra careers and
course advice that their schools are unable to offer. After doing a survey among local parents that
confirms the need, they decide to set up a tertiary sector consumer advisory service called UniFuture.
Parents will be billed for hours spent with their child. Special help with writing applications and
personal statements will be billed on a fixed-fee basis.
The two friends have never had a serious argument, and Mary is happy to set up the business as a
partnership as it seems to be the simplest option. Suyin feels that setting up a private limited company
would be better.
Questions:
1
(a) Define the term ‘tertiary sector’. (2)
The tertiary sector comprises of businesses that provide services to the general population and other
businesses. Examples: transportation/distribution of goods, entertainment, healthcare, education and
banking.
(b) Examine two arguments in favour of setting up the proposed UniFuture business. (4)
The primary argument given in favour of setting up UniFuture is that local families are willing to pay
high fees to improve their child’s chances at university admissions.
This business would fill up a niche in the local market by providing this service to customers who’re
willing to pay high prices for it since it’s a specialised service that they cannot find elsewhere easily.
Since schools do not offer these services, university counselling businesses have high opportunity to
attract students (in-school services could have easily taken up a large part of this market since they
would be more convenient for students).
The main requirement for this business is the specialised advisors (employees) and the co-founder
Mary already has experience with giving university advice. This could be a great advantage for the
business as they already have domain experience and can independently start with minimum
investment (only business premises and
(demand is somewhat price inelastic…)
(c) State three problems that UniFuture could face as a start-up business. (3)
Credibility, getting students
(d) Analyse whether Mary and Suyin should set up as a partnership or as a private limited company.
(6)
