Profit from Commission Payments and Consultancy fees
As an education agent you build relationships with educational institutions in various locations around the world, sign agreements to represent them in your country and then market their courses.
Many students that study abroad book their course of study through an agent or consultant in their home country. Even though the internet has made direct bookings possible students often prefer to deal face to face with a representative of an agency in their home country who speaks their native language. Language schools that I work with say that approximately three quarters of their enrollments come through agencies.
Once you have enrolled students with these institutions you then receive a commission payment, usually a percentage of between ten and thirty percent of the tuition fees that your student has paid.
For students studying abroad long term these commission payments can be considerable in some cases as tuition fees can often exceed US$10,000 per year.
Depending on the market you are working in and the amount of time that you put into each case you may also be able to charge your students a consulting fee for your services.
Good Locations to set up your Agency
The ’study abroad’ industry worldwide has continued to grow at a remarkable pace and continued growth is anticipated.
The education consulting business has matured in some countries (particularly Western Europe and Japan) and become quite competitive but in other developing parts of the world such as Eastern Europe, Asia, the Middle East and Latin America where economies have been growing rapidly in recent years tremendous opportunities are available for education agents as the industry expands with large numbers of people joining the ranks of the middle class and being able to afford to travel and study abroad.
The benefits of setting up an agency to entrepreneurs in developing countries are compounded by the fact that local salaries are lower and their income from commissions (often in US$, Euros etc) should ensure them a much higher income than average.
Schools report that student numbers from these developing regions are growing much faster then the more traditional markets in Western Europe and Japan.
Although the best opportunities at the moment are clearly in the developing countries it is possible to set up an agency just about anywhere in the world. Even countries such as the United States and the United Kingdom which have both traditionally been seen as ‘destination’ countries for students could offer good opportunities as it becomes more and more popular for young people to travel, learn languages or take a gap year abroad.
In terms of locating your business only a small office is required at first. Sharing premises with another travel or education related business is a good idea. You may even be able to start off working from home or look at running an online business.
Barriers to Entry
In most countries it is surprisingly easy to start out in the ‘agency’ business and turn it into a small part time business for yourself or even a large business employing other consultants if you are prepared to work hard.
In many countries the ’study abroad’ consulting business is basically still unregulated and anyone can set up a consultancy. In some countries such as China the government requires agencies to have a certificate issued by the Ministry of Education and in some cases to pay a bond before they can operate.
In order to prevent unethical practice by agencies some agents in various countries have formed agency associations. Members of these associations set out a service standard for their members. It is usually not compulsory to join these associations however members usually benefit from promotion of the association and the fact that some students perceive it to be safer to book with agents that are association members.
In any case before you start planning a new agency business you should check to see if there are any rules or regulations that you have to comply with in the market that you wish to operate in.
Representing Institutions
It should not be hard for you to build up a database of schools to represent. Many institutions are prepared to work with inexperienced agents and will issue you an agency agreement right away. Others will want to see that you have some experience and want you to complete an application form and give a few references from other schools that you have enrolled students with.
Getting agreements to represent Language schools and High schools is usually much easier than getting agreements to represent Universities.
It is important that you review the agency agreement carefully and understand your rights and obligations as an agent representing a foreign institution in your country. However these agreements are usually just a formality and are not often referred to.
The school should also send you promotional material to help you to market their courses in your country. This usually includes a brochure in English but can also include translated brochures, posters, DVD’s and other multimedia.
Many institutions will have representatives visiting your country and they will usually be very happy to visit your office and talk to you about the courses that they offer and answer any questions that you have.
Over time you need to look at forming relationships with institutions that are not only paying good commissions but also institutions that offer a good standard of service to the students that you place with them and a good standard of service to you as the agent. Institutions that respond to your communication, issue documents and pay commissions promptly are the best ones to deal with.
Most schools want to maintain a good relationship and reputation with agents worldwide so they should offer you a high standard of reliable service.
What Courses should I Promote?
Using many available online sources it is not hard to find institutions around the world that are looking for international fee-paying students for their programs.
There are so many study abroad programs on offer around the world that you really have to specialize. By choosing a selection of countries to specialize in you can minimize the time that you need to spend familiarizing yourself with the education systems, educational institutions and lifestyles of those countries so that you are well informed when it comes to sitting down and consulting prospective customers. You also have to learn about the visa application process for students from your country to study in the countries that you are promoting.
You may also want to specialize by targeting specific markets with specific programs. The following list is to give you a few ideas about the variety of programs that agents offer.
Language programs - English is a huge market but you may also want to offer other languages. A course of twenty-five hours of English tuition per week plus accommodation with a local home-stay family is a very popular combination and has almost become an industry standard.
Exam preparation programs - Programs at Language schools that prepare students for examinations such as IELTS or TOEFL.
English plus activities - Many language schools offer English plus sightseeing, surfing, golf etc
University placements - Many language schools also offer University preparation programs and many Universities have foundation programs designed specifically for international students.
Business Language - Agents offering Business Language usually target companies. Language schools usually offer a higher standard of accommodation for executive clients.
Study Tours for youths - Summer study tours for teenagers during vacation times are becoming extremely popular. Agents usually put together an all-inclusive package that includes tuition, accommodation, tours and activities, and guides to accompany the group. Agents can
market such programs to schools or parents. Language schools offer groups either ‘open’ programs whereby students are in mixed classes with students of other nationalities or ‘closed’ programs whereby your students form there own exclusive classes. Reassuring parents that their children will be safe and well taken care of is the key to success in this market.
Working Visas - In some countries agents assist their customers to gain working visas and in some cases even help them to find work abroad while they are studying.
High School Placements - Many parents are not satisfied with the school system in their country. A lot of private and state High Schools around the world welcome foreign fee-paying students and have systems set up for their integration and care. Many parents just want to send their children abroad for a year to help them learn the language and for the cultural experience.
Marketing your new Agency
Depending on your background and contacts you may have certain advantages when it comes to finding potential customers. If you are working at a High School, an ESL School or a University then you will have good opportunities to meet students and talk about ’study abroad’ options with them.
Agents that have studied abroad themselves also have a small advantage as they can relate to their customers, have more credibility and also have existing relationships with the educational institutions that they attended.
Most agents find that they get most of their business through ‘word of mouth’ referrals. If you are honest with your students and they have a good experience abroad then they will tell their friends about it and refer their friends to you. It’s important that you manage your client database carefully and keep in touch with your students while they abroad and after they return.
This system of referrals works well when you are well established but a new agency will have to look at other means.
Having an informative website with information about your services and the institutions that you represent is also one of the best ways of attracting students. Of course you also have to promote the website and usually seek expert assistance to increase your page rankings with search engines.
Most agents will agree that the methods listed above are by far the best forms of marketing in the industry. However attending ’study abroad’ fairs or exhibitions, radio and print advertising, targeted flyers and referrals from teachers (pay them commission) are other ways that can be effective depending on your market.
The Consulting Process
Once you have a client interested in one the programs that you are offering it is just a matter of going over the information with them in face to face meetings and phone calls. It’s a big decision for your customers as a lot of money is involved and spending a lot of time ’studying abroad’ will be something that they think through very carefully.
Be ready to answer as many of their questions as possible and if you can’t answer right away then you can look for further information and get back to them.
Developing some kind of sales approach is a good idea and many books have been written on this subject.
Set out all costs clearly to the student on an invoice so that they can see which charges are for the institution and which charges (if any) are for your agencies services. You can always direct them to the institutions website so they can see that they are paying the listed price and that you are not overcharging them.
It is up to you if you want to have students transfer fees to your agencies account and then transfer it on to the school yourself or if you have them transfer fees directly to the school. Some schools insist on full payment and then reimburse commission to the agent at a later date (usually about 6 weeks after your student has started their course). In some cases schools can issue agents a Net invoice, allowing them to deduct their commission from the students payment before transferring the balance.
Once the client has agreed to your offer and all the enrollment papers have been submitted to the institution and the student has been accepted and fees have been paid then you can work on the student’s visa application and help them to make the necessary travel arrangements.
There are many more things to consider but hopefully this article has given you a basic idea of an industry that you may not be so familiar with and a foundation for doing further research.
A ’study abroad’ agency or consulting business could be the just the small business opportunity that you have been looking for.
Copyright Steve Sutherland - 2007
