You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple step guide to starting your college planning business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
STEP 1: Plan your Business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
- What are the startup and ongoing costs?
- Who is your target market?
- How long it will take you to break even?
- What will you name your business?
Luckily we have done a lot of this research for you.
What are the costs involved in opening a college planning business?
Starting a college planning consulting firm requires very little capital. Most IECs meet at their customer’s homes, making the need for a fancy office unnecessary. Consultants who decide to start their business solo often forego the cost of renting an office space, conducting their business from their home office. As the need for additional consultants arises, however, it will be necessary to acquire a small office. This is a great place to collaborate with colleagues and will also help in maintaining that healthy balance between work and personal life that becomes so difficult when working from home.
Much of your start-up costs will be centered around your marketing strategy and gaining the knowledge necessary to properly guide your students. The following are a few items you’ll need to get started:
- Office space, if you decide that’s the route you want to take from the get-go
- Telephone line
- Marketing materials - brochures and business cards will be an important part of your marketing campaign
- Standard office supplies
- A logo that properly represents your mission. If this isn’t your strong suit, you may want to hire a professional
What are the ongoing expenses for a college planning business?
The extent of your ongoing expenses will depend largely on how you structure payroll. If you hire each consultant as a freelancer, the only employee you’ll need to pay payroll taxes for is the admin assistant. If you want to make employment with your company more appealing, however, take each consultant on as an employee. This will significantly increase your overhead costs, as you’ll have to pay payroll taxes and offer benefits for each employee.
In addition to payroll, keeping your business going from day-to-day won’t require much overhead beyond the typical administrative costs. To realize long-term success, however, budget a fair amount of money each year on continuing education courses and for traveling to various college for networking and educational meetings.
Who is the target market?
Your ideal customers recognize the value of higher education and understand the importance of a matching each student with the college that best fits their personality and long-term goals. Parents who understand that school counselors do not have the time and resources to properly guide their children through the process, and are willing to pay for their children to have a great experience will be your best customers.
How does a college planning business make money?
Consulting fees are paid for by the family and are set depending upon the services rendered. As the owner of the business, you’ll collect client fees, dispersing a percentage to employees, based on the clients they met with and the services they provided.
How much can you charge customers?
Agency fees can be structured in a couple of different ways. Some consultants charge an hourly rate, ranging from $85-$150/hour. Offering package deals are another way to ensure your services are affordable to a wider audience. The national average for package deals is $3,600, with larger cities reaching upwards of $6,000. Some consultants have reported earning as much as $40,000 for one contract. Reasonable fees are defined by location and services rendered.
How much profit can a college planning business make?
Your annual profit is largely defined by how many clients you’re able to take on, how many consultants you hire, what your customer’s individual needs are, and your fee structure. Experienced consulting firms report earning a profit of $40,000 to $80,000 annually per consultant, with the potential for more as your agency grows in experience and reputation.
How can you make your business more profitable?
The following are a few strategies other agencies have implemented to ensure a more profitable business:
- Offer workshops and seminars on subjects such as college applications and essays. This generates additional income and often leads to new clients, as parents realize they don’t have the time or knowledge to properly guide their children.
- Offer classes on improving test scores.
- Include services such as identification of educational, sports, and performing arts scholarships and financial aid form assistance.
- Carve out a niche for yourself in the community by offering specialized assistance with students who have learning disabilities, behavioral problems, or illnesses.
- Partner with local high schools to offer presentations that set students up for the college planning process. This is a great way to earn a little income and pass out your brochures, which could lead to new clients in the future.
What will you name your business?
Choosing the right name is very important. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC prevents you from being personally liable if your college planning business is sued. There are many business structures to choose from including: Corporations, LLC's, and DBA's.
You should also consider using a registered agent service to help protect your privacy and stay compliant.
For most small businesses forming an LLC is a great option, but if you still want to weigh all your options check our our article, What Structure Should I Choose for My Business?
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It's really easy and free!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Open a business bank account
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment later on.
STEP 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
STEP 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
State & Local Business Licensing Requirements
In most states, it is necessary to obtain business license. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
For more information about local licenses and permits:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
STEP 7: Get Business Insurance
Insurance is highly recommended for all business owners. If you hire employees, workers compensation insurance may be a legal requirement in your state.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
How to promote & market a college planning business
Like many professions, word-of-mouth referrals will be your strongest marketing tool. One successful consultant cautions against advertising too vigorously, indicating that the most accomplished consultants are booked one to two years in advance. Too aggressive of a marketing campaign will make potential clients wonder why you’re not amongst those booked consultants. Families seeking your advice expect a personalized experience, so shy away from promoting your business in a way that makes it feel generic.
The most successful in this industry market through networking. Cultivating relationships with professionals who work with children, such as high school counselors, psychologists, and pediatricians can generate a steady flow of referrals. Periodically, take the time to send out “agency update letters,” offering information your team has learned that might also benefit them professionally. This offers increased visibility and reminds them of the services you offer.
Consider advertising in school programs, playbills, or yearbooks. Ads are fairly inexpensive and target the audience you’re trying to reach. Don’t limit yourself to local schools only. Research areas of the country that aren’t saturated with consultants and target them as well. Out-of-town clients can always utilize Skype for your meetings.
Recommended: Get started with local advertising for your business with a $300 credit from Yelp.
How to keep customers coming back
As a college counseling business owner, delivering a quality experience is critical. This will ensure positive testimonials, which will consistently bring in new customers. Many consultants report that siblings account for up to 40% of their annual business, further solidifying the need to deliver a positive experience every time. Additionally, it’s advisable that your consulting firm offer a complimentary “getting to know you” meeting, which gives everyone an opportunity to determine if the this will be a good fit.
STEP 9: Establish your Web Presence
A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.
Start A College Planning Business In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
Those with a thirst for knowledge and who are passionate about helping others will excel in this profession. Your team’s primary focus will be to get to know these young adults on a personal level, using this knowledge to identify their strengths and weaknesses. Once you’ve tapped into this, you’re equipped to assist them in determining what schools are best for them and how best to proceed from there. Since colleges consistently change their admissions process, you must be committed to keeping up with these changes. A love of traveling is also important, as you’ll want to spend a portion of your time visiting college campuses, building relationships with individuals in the admissions office.
What happens during a typical day at a college planning business?
Your career as an independent education consultant (IEC) requires much one-on-one attention, so you’ll want to take a hands-on approach to your work. There are a number of activities that will keep you busy day in and day out.
Most days will include the following activities:
- Meeting with families to discuss your business’ philosophy and to determine each student and family’s needs.
- Assess academic and extracurricular achievements
- Assist in drafting student’s personal resume
- Research to identify colleges that are the best fit for your students
- Arrange itineraries for visits to college campuses
- Networking with admissions personnel at various universities, both to understand their unique process
- Identifying the need for financial aid and scholarship opportunities
- Strategizing the essay and other elements of the admissions process
- Keep student on a timeline
- Researching colleges across the country
You’ll have a small window of downtime each year. This should be spent on continuing education, meeting with college representatives, developing new marketing materials, and networking. A portion of each week will also be spent making appointments with prospective clients, assigning new customers to the team member you feel will be the best fit, and completing other administrative tasks.
What are some skills and experiences that will help you build a successful college planning business?
Your clients will have a great deal of questions throughout the process, which puts you on call much of the day. Thus, it’s important to be able to separate work from your personal life, drawing boundaries where necessary. In this industry, you’re facing 100% client turnover, so you must posses the drive to consistently network and market your business. Since you’ll likely be working with multiple students at once, strong time management skills and attention to detail are also paramount to your success.
Many IECs describe themselves as part therapist, part college advisor, so emotional intelligence and sound people skills are critical. Remember, you’re guiding students and parents through a process that is intimidating and time-consuming. You’ll need to be authoritative in your message, yet personable enough to motivate them.
While not required, many entrepreneurs who enter this profession have a background in high school guidance or college counseling. The Independent Educational Consultants Association (IECA) has wonderful professional development courses to assist you in getting started in this industry.
What is the growth potential for a college planning business?
As parents struggle to balance their work and social lives, while still offering their children the best opportunities, the need for college planning consultants has grown. In fact, many individual college planning consultants are so busy, that they’re booked up one to two years in advance, forced to turn new clients away. This is wonderful news for entrepreneurs, as the opportunity for expansion in this industry is boundless.
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One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
What are some insider tips for jump starting a college planning business?
Before getting started, contact agencies in other areas of the country. They can provide useful information and tips to ensure you’re set up for success.
The following are a few insider tips from well-established agencies:
- Be honest. Your students are going to be hesitant to listen to you. You can gain their trust by always being up-front with them.
- Consider taking some courses and learning as much as you can before launching your business.
- Never make guarantees regarding results.
- Offer different packages to make your services affordable for a wide range of families.
- Join associations such as HECA, IECA, and NACAC.
- Attend training workshops and conferences regularly, as well as meet with various admissions directors.
- NEVER use personal connections or receive compensation for providing recommendations.
- Break the process down into phases to make it less overwhelming for students
- Take time in writing your contract. Set clearly outlined expectations and include a clause that allows you to break the contract should clients repeatedly miss deadlines.
- LinkedIn groups that focus on financial aid and/or college admissions are a great resource.
How and when to build a team
When it’s time to start hiring additional consultants, it’s important to remember who your clients are. You’ll be working with teenagers whose initial reaction is to be apprehensive. If you employ consultants who are young and have never been through the college application process personally, it will only compound your client’s uncertainty. Make sure your team is comprised of experienced, knowledgeable individuals who naturally command respect from both colleagues and clients.
As you add consultants to the firm, it will be necessary to add an administrative assistant to the team as well. You’ll want to hire someone with prior experience, as they’ll be juggling the schedules of multiple consultants and families with very busy schedules - there is no room for error.