College Prep 101

College Prep 101

company by Dave Szymanski | Tampa Bay Editor

Studyworks, a Tampa-based college test preparation company, is taking on big competitors by forming a niche and offering online courses.

Kaplan and the Princeton Review are the leaders in the test-preparation business. Both have diversified beyond high school students to other classes.

Tampa-based Studyworks, which recently moved to the city from Atlanta, hopes to do what other, smaller businesses have done in such David-and-Goliath battles: Carve a niche using innovation and focus.

The innovation is using both brick-and-mortar locations and online courses. But the online classes have a twist. Unlike self-directed, static text-online classes, Studyworks students hook up live to a teacher they can see and interact with on screen.

The focus is on high school students, preparing them for college by doing well on the standardized tests, the SAT and ACT.

Studyworks was an early pioneer of test preparation. It had its first students in 1975, starting in a basement of a suburban Washington home. Its founder, Miles Pewitt, finished law school but was interested in creating a business that utilized his skill at doing well on standardized tests.

At the time, prep courses were not popular and were even considered gimmicky. Many people considered that tests such as the SAT measured a student's math and reading ability.

Pewitt knew this test really measured the student's ability to take standardized tests. For years and years the SAT creator, the Educational Testing Service, claimed that prep programs were a waste of money. It said the SAT was not manipulable and measured long-term skills that could not be taught in short periods of time.

So Studyworks' early years were difficult. But slowly, attitudes changed and it grew. It is now the third-largest SAT prep group in America and has courses coast to coast.

Move to Tampa

The move to Tampa was actually in the plans for a while. Company executives had ties to the state, including Rob Hinchliffe, 37, CFO, vice president and minority partner who was born in Palm Beach and raised in Vero Beach. Pewitt was from Winter Haven.

Also, because of Florida's Bright Futures scholarship program, the SAT and ACT can make a bigger difference than other states because of the way the scholarship is granted with score levels. A1270 on an SAT, usually means a four-year, full-ride scholarship to a Florida school. And the reputation of Florida colleges is growing.

After starting in Bethesda, Md. in 1975, the company's first expansion city was Atlanta in 1998. Before then, it remained primarily a Washington company.

It is now in 12 states and in Singapore, England and Switzerland. It also has an extensive online component.

Many foreign students want to attend American colleges, so they find the test preparation attractive.

The SAT and ACT are national college admissions exams. Every student takes the same exam. Florida's version, the FCAT, doesn't help students do well on the SAT. The FCAT is more of a content exam. It's not how you think, it's what you know. The SAT and ACT test analytical thinking. But students think it's going to be a similar exam. A proctor walks around. The test is timed.

The most current trend for Studyworks is the growth of its two-year-old online division. Registration for those classes is growing faster than classes in person. That should boost revenues.

"With online classes, the pie we can reach is bigger," Hinchliffe says.

Other reason: It's not a self study. It's a log-in, see, hear and speak-to-the-teacher program. Most online programs are self study. There's no interaction.

The privately held company has seen revenue growth most years, although last year was stagnant as The College Board changed the style of the SAT exam. It took time for students to get used to it. The format pushed more students toward the ACT exam, for which fewer students seek prep work.

It expects revenue of about $5 million this year.

Studyworks serves about 5,000 to 7,000 students a year. The cost of the courses runs from a little more than $100 into the thousands.

The number of students has been steadily growing. Studyworks targets students from sophomore to early senior years. Another trend is demand. It is getting harder and harder to get into college. Florida has seen increased competition and it is happening around the country.

"We can't think of one state where it's easier to get in than five years ago," Hinchliffe says.

Looking long-range, Studyworks plans to spend more time and effort boosting its online classes, which can reach more students faster than traditional classrooms.

"Were going to focus our efforts on marketing," Hinchliffe says. "With the number of online students, it's very easy for us to grow. The infrastructure is there."

The company is also creating a non-profit organization to serve more financially challenged first-generation college students, many of whom are in the inner cities. It wants to start a test program in Tampa in the fall. Philanthropists would help fund it.

Although most of its work happens outside of schools, the non-profit work will likely take place inside city schools.

Studyworks is also diversifying its online courses to the GMAT and GRE, for students bound for graduate school, and to the LSAT, for those going to law school. Those courses begin in January.

REVIEW SUMMARY

Company: Studyworks

Industry: College admission test preparation

Key: Bring test preparation to more students to help them get into college