Collegiate Commerce: The Growth of Student Agencies

Business Today, On Campus
Fall 2004
by Marc B. Zawel

When Seth Higby began a student laundry business at Cornell in 1894, its sole purpose was to assist the young student in financing his education. But it did well that year, and years that followed, as it was continually sold from graduating to incoming students. One of the company’s early owners was W.H. Carrier, who later formed the Carrier Air Conditioning Company. Today, Higby’s small laundry company has become Student Agencies, a multi-million dollar student-run business at Cornell.

“The initial intent of SA was to provide an ongoing source of employment for Cornell students that could help them fund their education,” said Dan Kathan ’70, SA general manager. “Our mission today is more focused on the practical learning aspect.” This means providing undergrads with hands-on learning experience helping to manage the organization’s various businesses, Kathan said. These include Big Red Shipping and Storage, Campus Promotions and a Front Desk service, offering students everything from passport photos to bus tickets back home. And does working at Student Agencies better prepare young people for the working world? “Yes, definitely!” Kathan exclaimed. “This is the most important benefit of the experience. Students get exposed to most aspects of running a real business and learn about time management and juggling multiple priorities.”

Cornell is certainly not alone in the Student Agencies market. At its Ivy League rival in Cambridge, MA, Harvard Student Agencies has been in business since 1957. It too was founded in order to assist students in financing their educations. Today, HSA employs over 800 students, operates ten agencies (the Harvard Bartending Course awards about 50 Doctor of Mixology degrees a month while Let’s Go, the wildly successful budget travel series, now has 63 titles) and generates revenues in excess of $6 million.

Ryan Geraghty ’05 is HSA’s president. “HSA is not only a job, but a way of life in which the responsibilities of managing and leading a large organization are cast upon the shoulders of a few individuals,” he said. Geraghty and the other HSA employees are gaining practical business experience and launching themselves outside of their comfort zone. “Run a $200,000 business? Who, me? he jokingly asked. “Its learn by doing philosophy is possible because mistakes are acknowledged but not punished,” Geraghty said. “Student employees feel that their bosses are there for them first and entrepreneurship is cultivated from the beginning.”

Need a babysitter? Or maybe dorm furnishings, food delivery, a class ring or a tuxedo? Princeton students need only to turn to its Student Agencies, established in 1911 also as a means to help undergraduates finance their educations. “Over time, the agencies became more service oriented and focused less on the financial issue for tuition,” said Sean F. Weaver, director of PSA. “Today, the purpose of PSA is to educate student managers on the ideas of service, stewardship and how to be productive community business members.” With 23 agencies, PSA generates over one million dollars a year in revenue. “Our hope is to continue molding PSA in a way that truly educates students to be great leaders who are well versed in business administration and financial management,” Weaver said.

Yale’s Associated Student Agencies, around since the early 1930s, like Cornell’s SA, began as a student laundry service, providing an opportunity for undergrads to work and earn money. Nearly eighty years later, ASA has expanded, with gross revenues in the neighborhood of half a million dollars, although its bulk laundry service remains its most popular business. Diane Healey, ASA’s manager, cited “management training” and “the opportunity for students to run their own business own campus” as just two of the company’s goals. Although it’s a bit smaller in size and scope than other college agencies, Yale’s ASA is still offering its student employees a unique opportunity that offers them hands-on business experience. Does it help prepare its students for a future in business? “A definite yes!” Healey said. “[Judging] from the feedback that I get from students as well as the interest and communications I have had with future business employers in providing student references.”

Coffee sells at Georgetown to the tune of $875,000 a year. At least that’s how much The Corp., Georgetown’s entirely student-run business, sells at its three coffee shops placed strategically around campus. “It’s really amazing how much coffee our campus consumes,” said Keith McNamara ’06, chief operating officer of Students of Georgetown Inc. While The Corp. is a relative newcomer to the field of student agencies around the country, established in 1972, it prides itself on being one hundred percent student run. Besides its coffee shops, small convenience and video rental stores, shipping and storage division and a book co-op, all help contribute to over $3 million dollars in revenue generated each year.

“The Corp is real,” said Christine Werner, president and CEO. “It is not role playing or discussing a case study or business scenario. Every day we grapple with real issues from inventory, marketing, P&L, forecasting and auditing to dealing with outside vendors and oversight agencies and handling all types of personnel issues.” As the woman in charge, Werner makes $7.15 an hour although she finds herself “working on business issues that I never would have thought I’d be doing at the age of 21,” she said. It’s not all fun and games though. “I don’t think that anyone in their right mind would do what I do,” McNamara said, referring to the 25-30 hours a week he typically works at The Corp. “It’s really difficult to plan your life when you get called to work on a whim,” he said. “I’ve gotten everything I’ve wanted to get out of it though: I’ve met a whole new group of people, and most importantly, I can say that when I was 20-years-old, I ran a multi-million dollar company. I think that’s really cool, and whenever I get frustrated, I just think about that, and how lucky I am to do what I do, and at the end of the day, I don’t regret a minute.”

Marc Zawel is a recent graduate of Cornell. He is currently authoring a comprehensive college guidebook to the Ivy League, to be published by College Prowler next spring. For more information, visit www.marczawel.com.

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