How much does it cost to start a university course?
About $117,000 all in for a small one, opened by one founder in an American city: $88,600 to open the doors and $28,300 to keep going for the 2 years it typically takes to pay its way. Below, every item at low, typical and high with where it comes from — and your own quote, for your country, your town, how you start and the money you have.
To open: $88,600
Course design and video production: $45,000 ($20,000–$100,000). Emerald: $34k-$45k per course; USU Extension: $5k-$10k per finished hour with an instructional designer
Subject-matter expert / faculty fee: $5,000 ($1,000–$15,000). Oregon State Ecampus: faculty stipends $1,000-$5,000 per new online course (high is an estimate for outside experts)
Credit recommendation review (ACE): $14,800 ($12,400–$20,000). ACE Learning Evaluations review pricing: $11,000 first-time readiness fee + $1,400 per course (virtual) or $1,900 (onsite) + $2,400 annual fee
Legal, accessibility and state authorisation: $6,000 ($2,000–$15,000). Our estimate: accessibility (WCAG) audit, terms, distance-education authorisation advice
Recording kit or studio days: $2,000 ($500–$5,000). Our estimate: no published figure was found for this item.
Launch marketing: $15,000 ($3,000–$30,000). Our estimate: current SparkTower figure $20,000
Forming the company: $800 ($150–$2,500). An LLC's state filing is $50–$500 (state fee schedules), plus an EIN (free) and a registered agent; the World Bank measured the procedures at about 1% of income per capita, about $850 (Doing Business 2020); a lawyer's formation package $500–$2,000.
To keep going until it pays its way: $28,300
Running costs while sales build: $28,300 ($3,590–$139,000). Learning platform, Video hosting, Student recruitment ads, Student support tools, Professional liability insurance, until it breaks even; sales are taken to grow evenly to cover them, so about half is needed. Break-even: Our estimate: credit-bearing courses sell in academic intakes; Tony Bates notes yearly maintenance at 15-25% of development cost
All in: $117,000
About $117,000 all in ($42,600–$327,000): $88,600 to open and $28,300 to keep going for the 2 years it typically takes to pay its way.
With $10,000 of your own you are $107,000 short: borrowed as an SBA 7(a) or bank loan at 11% over 5 years, about $2,320 a month.
The trade's published range, before the months it takes to pay its way: $34,000–$150,000. Emerald, 'It costs how much? Estimating the costs to design...' : $34,000-$45,000 per online course; Utah State Extension: $5,000-$10,000 for a one-hour professionally produced course; current SparkTower figure $50k-$150k (EDUCAUSE/Coursera, not re-verified)
How much does it cost to start a university course?
About $117,000 all in ($42,600–$327,000) for a small one, from home, in an American city. To open: Course design and video production $45,000; Subject-matter expert / faculty fee $5,000; Credit recommendation review (ACE) $14,800; Legal, accessibility and state authorisation $6,000; Recording kit or studio days $2,000; Launch marketing $15,000; Forming the company $800 — $88,600. To keep going for the 2 years it typically takes to break even: running costs while sales build $28,300 — $28,300. The trade's published startup range is $34,000–$150,000 (Emerald, 'It costs how much? Estimating the costs to design...' : $34,000-$45,000 per online course; Utah State Extension: $5,000-$10,000 for a one-hour professionally produced course; current SparkTower figure $50k-$150k (EDUCAUSE/Coursera, not re-verified)), which leaves the months before it pays its way out.
What does SparkTower's simulator pay to open it?
The simulator pays the one-off opening costs before the first customer — the running costs and the founder's living it plays month by month: Course production $60,000; Learning platform $10,000; Accreditation and legal $10,000; Launch marketing $20,000. An accredited online course: $50k–$150k to produce (EDUCAUSE and Coursera partner course-production cost guidance).
How much of that do you keep?
None of it is kept as an asset: a build is spent, and what it made shows in the product, not on the books.
What if my own money doesn't cover it?
With $10,000 of your own you would be about $107,000 short. Borrowed as an SBA 7(a) or bank loan at 11% over 5 years, that is about $2,320 a month. Most founders borrow the rest. A small-business term loan runs about 11% a year over 5 years (SBA 7(a) loans are the prime rate plus 3 to 6.5 points), repaid every month from the start — before the business has found its customers. In SparkTower's university course simulator the founder starts with $400,000 of their own money; the launch costs come out of it and leave $300,000 to trade on, with nothing borrowed.
Will it earn the money back?
That depends on what you charge, how many customers you win and what your rivals do. The free university course simulator pays these costs before it opens, borrows what the founder's cash doesn't cover, and plays the business forward against real rivals, so you can see whether it earns them back before you spend them.
What it costs to start others like it