The 3 great great barriers for education agencies to overcome

By Raphael Arias on 05 Mar 2019

In the big and growing industry of international education there are a lot of international education agencies but why aren't there more large education agencies?

There are thousands and thousands of education agencies scattered all across the globe, selling courses of hundreds of countries and thousands of colleges/universities. Estimates suggest the number of agencies selling Australia's institutions are around 7k, sending more than 378k students per year.

But most of them are small to medium size businesses. It's a fragmented industry with - we believe - 200 large education agencies in the whole planet. So how can an industry worth US$150B have just a handful of large agencies.

At EducationLink we work with agencies of all sizes, and we have a theory.

The 3 great barriers of education agencies

In this context is a barrier is something that it's really hard for education agencies to overcome. They come in various degrees of anxiety-inducing problems, but they are common to all agencies we ever spoke to. No matter how much you try, you will face them. The farther you go with your education agency, the harder they will get and the bigger the scale and complexity these barriers will have.

We call them the great filters of international education agencies, they will stop the growth of the majority of education agencies by offering enough resistance until the education agency falls apart or until there is enough chaos to prevent any further increase in size, forcing the education agency to remain the same size for a long period of time. These barriers are self-generated, which means, by the natural and inevitable operation of your agency will reach them. And while these filters could be applied to any other type of business, they are especially important for agencies.

Due to the very nature of the business, which is to offer the best advice for students among hundreds of options, education agencies need to manage a long tail of commissions which are due in different dates and extend to 3 years or more, and also education agencies need the navigate the bureaucratic processes of enrollment and visas. These barriers have exterminative power, and they will stop almost every agency.

1st great barrier: setting up an education agency

You just opened your education agency! You got you first customers already, and you know they got the best customer service possible: exclusive, tailored and unrestricted support.

The early days are exciting and frightening at the same time. In life you either own you own business or you work for someone else as an employee, and you choose the first one. High hopes mixed with high responsibilities and every new customer is celebrated. You feel the energy to keep pushing.

The time passes by and you may feel the need to hire someone to help you take care of leads and your current clients. The more international students your agency takes care of the less time you have, but it's normal you may think, specially in this very beginning of your entrepreneurship journey.

You have now more people and the business is growing, besides the pressure of managing people and paying salaries, you may also recognize few of these pain points:

  • Missing dates of visa expiration makes you miss leads;
  • Every day is a battle to get new leads and students;
  • The more people you have the more complicated is to coordinate with everyone what/how they should do their tasks;
  • The quality is still important, and high involvement of yourself takes too much of your time;
  • Dropxbox or Google Drive are being used now, but some documents are missing and more time is spent on back-office - inefficiency is starting to pill up;
  • Training new people is somewhat a challenge, but things are working so far;
  • Establishing relationships with colleges still in its beginning, but due to your personal charisma it's progressing.
The fact is: very few education agencies will grow past this stage.

That's where the biggest chunk of education agencies is and due to all these small, persistent and growing pains, that's where the first great barrier of international education agencies arises. It's like never stop putting out fire, or never having time, because there is always something happening.

In this phase, many education agencies don't have the necessary structure to create a solid foundation to keep growing. The lack of solid foundation will make them collapse or to stop growing. And due to the constant lack of time and no solid foundation for growth, it will not allow many agents to grow further than 5-10 employees in total.

A very common decision is to partner with other another education agent or agencies, but often the dysfunctional day-to-day of two education agencies will be facing the first great filter will be enough to create more chaos than support.

2nd great barrier: the scaling challenge

In average 200+ students per year is where things start to go to another level (this may depend on your market and country).

The second great barrier will only be faced by agencies that successfully overcome the first great filter, which in our estimates are 30%. These are the challenges faced by fast-growing agencies, with quite a few employees (more than 15) and hundreds of students per year. Your agency is now growing! You're becoming one of the key players in your city, congratulations!

Only 30% of agencies will grow up to this stage.

If you work with private colleges, they already know you. You have your preferred universities and word-of-mouth can be a critical factor to your marketing. Your education agency revenue is growing, but with that comes the challenge of managing installments, payments, invoicing commission, and overall debt collection - and bonuses too.

Some common challenges faced by international education agencies at this stage are:

  • Your agent commission management processes is starting to get complicated;
  • You have more and more leads but sometimes is difficult to remember the stages of every single one of them;
  • You have more employees, and to keep the quality consistent is starting to get more difficult;
  • You may need different and multiple ways to attract more leads;
  • The CRM for students of your agency is starting to play a critical role (for good or bad) and it may be more and more difficult to change.

3rd great barrier: the unexplored territory

You're now part of very select group, en petit comité if you prefer. Very few achieve this status, because for most agencies the 2nd great filter will prevent them to grow further. Your leadership skill and capability of delegate, have vision and deal with thousands of problems happening at the same time will dictate if you the 3rd great barrier of international education consultants and agencies will stop you.

Be ready to have teams dedicated for specific problems and challenges:

  • Managing the chaos of price, institution and course updates;
  • Managing multiple branches in different countries, in one centralized and sane way is a daunting process;
  • Training of staff becomes critical - even more than before - and internal communication may need a specific team just for that purpose;
  • Accounting, company legal papers, and tax is ten fold more complex than before, specially with franchisee and partnerships;
  • Managing contracts, commission, bonuses and allocating budget efficiently is critical for your profitability;
  • Turnover of staff, engagement, different labor laws and HR is at an enterprise-level of difficulty;
  • Your systems and processes performance, flexibility and governance is key to maintain customer satisfaction;
  • The future and your vision will impact your company in five years time, but the decision needs to be made now;
  • Smaller agencies are much faster, nimble and quick to adopt innovations, and now you have the weight of hundreds of employees or many branches to manage before implementing trends and improvements.

What do you need to overcome the 3 great barriers

To scale a company requires a different set of skills than launching one. To keep growing a company is an eternal process that will only stop once the company does not exists anymore. So lifelong learning skills are important, because things changes, the world evolves and we can't predict the future.

Two special things are most often said to be most important points to focus on when guiding your education agency to overcome the 3 great barriers: constant learning/professionalism and systems.

  • Professionalism or constant learning: You got to be ready for the future, and you probably will not have the skills necessary to take a company from 3 employees to 300, nobody has. Professionalism and be always learning about new ways of doing your job is essential. Nobody could predict Facebook 10 years ago, but now if you're not there, you're missing out.
  • System and processes: Our entire human civilization is built on technology, in increasing our efficiency. Only technology can deliver that, does not matter the system (would be good if it was EduLink though), to have systems in place and clear processes is essential to organize the growing chaos of growing any business, specially an education agent, which is very human centric. Free up your time and let the systems do the hard work of the operational tasks. And let your processes guide your employees to make efficient decisions.

When we started this blog post, it was not our intention to do advertise software usage, but it was an interesting discovery that, no matter the agency, no matter the system (until a certain point, even Microsoft Excel), systems and constant learning is the key to unlock agency (and any other business) growth.

What do you think, do you agree with our 3 great barriers of education agencies growth? Let us know in the comments.

Topics: education agency strategy

Raphael Arias

Written by Raphael Arias

Founder and CEO of EducationLink. After 4 years in banking, Raphael founded EducationLink to help the international education industry move forward. He specialises in innovation, strategy and business development.

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