By Special to Capital Business
Monday, May 17, 2010; 28
If you're a parent, you know your child seems to always need money for something -- a check for a field trip, monthly dues for swim club, a contribution to the marching band booster club. It can be difficult to keep track. Jay Bass and business partner Don Segal think they might have a business to help with that.
With more than 30 years in the education industry and 25 years in Web-based data analysis respectively, the duo started a Falls Church-based company to help organizations collect credit card payments online, streamlining the process for parents and helping organizations get paid on time.
Bass and Segal say their customizable Internet platform could be used for any type of organization that needs to collect money -- schools, after-school programs, scouting programs, sororities and fraternities, religious organizations, recreation clubs -- and they estimate the dues, fees and payments for these types of organizations total between $60 billion to $70 billion in the United States annually. And as both are fathers with six children between the two of them, they each can speak from experience on why their business idea would be helpful to busy parents.
"Our company, Payment Partners Inc., eliminates check-writing (and mailing forms) for community organization fees and payments via a Web-based, consolidated payment tool, and addresses the waste of time and labor by an organization's staff and volunteers. We offer one site for organizations to list and keep track of all payments, information and records for members. As an added benefit, the organizations can earn additional revenue as well.
"No other product (not even PayPal) is designed to be as interactive and handle the collection of payments in a long customized menu from any type of organization. For the K-12 schools market, Pay4SchoolStuffOnline.com can be customized, provides detailed records, and allows multiple stakeholders from the same organization to have separate access and accounts. We offer the capacity to upload forms and maintain records and a database for nonpayment information as well. The system offers parents and other users a secure, convenient, easy-to-use platform to remit all of their payments for kids in different grades and schools -- all in one place.
"We had a successful launch this fall and have several dozen clients using our system, but now how do we take this concept that we've proven works and scale it up?"
Asher Epstein, managing director, Dingman Center for Entrepreneurship at the University of Maryland's Robert H. Smith School of Business
"Conceptually, you've got the market, you've got the idea, but it feels like you're trying to be too many things to too many people right now. Ultimately, you can be all those things to all those people, but you can't start out there.
"I would initially stay away from the public school system -- you'll have to deal with a lot of bureaucracy and red tape. I think the key is to find one category and own that category rather than trying to be all things to everybody, because that's hard to do on a start-up dollar. The fraternity/sorority system is a great fit for this and would be a great place to start from the top down. For these types of organizations, you want to get buy-in at the very top to vouch for your system and feed you down to the local level of the organization. Figure out what the top-level organizations are for your target clients, weed out the overly bureaucratic ones to start, then sell the benefits of your solution. You also want to make sure you think about how you diversify clients -- if you're only collecting payments during the school year, you won't be generating revenues during the summer months."
"Focus on one or two primary markets that can give you very, very broad reach, relatively low-risk rollout, quick decision-making, and a clear value proposition where the risk-reward is proportionate as opposed to some of the really slow-moving bureaucratic segments."
"The interaction with the Dingman Center was very helpful, and it was great to have someone with experience in the industry like Mr. Epstein provide insights into our business model and marketing strategy. We started with Pay4SchoolStuffOnline.com -- focusing on the K-12 public and private schools market -- because that is where our expertise lies. We have already made some significant inroads there, the reception has been fantastic, and the PTA and booster clubs provide an entry point without having to crack the obstacles of the school/district bureaucracy and leadership.
"Our next steps, then, are to broaden the capture of the schools product, with plans to roll out a companion offering in the next several months. A similarly accessible and hassle-free payment product for different organizational groups we've identified will follow, likely in fall of 2010, in order to overlap the processing of payments throughout the year. Eventually, all of these group payment platforms will coalesce and funnel through one centralized "Pay4StuffOnline" portal. We think we have a great template for moving forward, and so the search for investment capital to allow us to expand our corporate infrastructure and management team is a key short-term goal."
Looking for some advice on a new business, or need held fixing an existing one? Capital Business and the experts at the University of Maryland's Dingman Center for Entrepreneurship at the Robert H. Smith School of Business are ready to assist. Contact us as email@example.com.