Best Small Business to Start: Higher Education Services

There's a huge industry built around getting into college.

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Higher Education Services

There's a huge industry built around getting into college—test prep courses, college counselors, and the like. But a relatively untapped yet potentially big field involves helping college students once they get there. Some entrepreneurs have found that colleges and universities are willing to pay well for services that assist them in retaining students.

San Francisco's Inside Track is an example of a company that has turned the demand for higher education retention services into a multimillion-dollar business. The company coaches thousands of students at a number of institutions with the aim of keeping them in college and providing "the guidance, structure, and feedback they need to be more successful, in school and in life."

Now, others are following the lead of companies like Inside Track. Christopher Gergen and Gregg Vanourek recently founded New Mountain Ventures, which aims to deal with the problem that "students are pursuing paths that are not at all in line with what they want to do as individuals," says Gergen. He is the cofounder of a previous education start-up, online tutoring provider smarthinking.com. Since then, he and Vanourek wrote the book Life Entrepreneurs, interviewing leaders in different fields about how they found their callings.

Gergen took the results of that research and created an assessment test for college students to help them articulate their goals and what kind of person they want to be. It's the inability of colleges to cater to that core identity that is behind disillusioned college students, Gergen says. "They take two credits and say, 'Screw this.' As a result, you get high dropout rates." Colleges can use the results of these tests to keep students on track. Gergen plans for New Mountain Ventures to train college administrators about its system, which means he won't need many employees of his own. "We're looking at keeping it very dexterous, and not a lot of overhead," he says.

How much does it pay?
Because this is such a specific field, it is hard to find earnings data for it. According to the Bureau of Labor Statistics, the mean annual wage for a chief executive in the educational services industry in May 2007 was $128,700.

What kind of background do you need?
You can take a purely managerial role and run the business while you hire people to design your specific programs or you can be active in those programs. For the latter, experience as a college counselor could help you understand the problems that face students in deciding what to do in school and offer solutions. Work experience at a college, such as in admissions or student life, could be a plus in understanding what your client—the school itself—will be looking for.

How do you get started?
The biggest challenge might be figuring out one of the many directions in which you could take this business idea. You could sell your program to colleges and universities with the idea that they will run it themselves. Or you could follow Inside Track's lead and create networks of coaches who can work with students directly. Another direction could be to create an online tool that students could use.

There is also the question of what market to target. You could focus exclusively on community colleges, for example, which focus strictly on teaching, not academic research.

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TAGS:
small business
education
counseling
colleges
entrepreneurship