A recent Goldman Sachs survey of small businesses found that 96% have been affected by COVID-19.
This got Quatromoney, and our friends at CounselMore, thinking about the impact on the independent educational consultant (IEC) community. Rather than guess at what might be happening, we decided to create a national flash survey to gauge how the pandemic is affecting the businesses of our IEC friends and partners. Over 200 IECs from across the nation responded to our survey (plus a smattering of IECs working in other countries).
The results indicate that a majority of IECs, (60.3%) are struggling as a result of the pandemic and while less than the overall US small business community, the current economic conditions and changes in the higher education institutions are modifying the ways IECs do business.
Three out of Five IECs Are Experiencing the Negative Effect on Their Business
This percentage was almost identical whether the IEC ran their own business (60.2%) or was in a business with others (60.5%).
When we looked into the results of those who have yet to experience any negative effects of COVID-19 (39.8%), only 4.4% of the respondents remained confident that the pandemic would not affect their future business.
A full 14.7% of the respondents who were not currently feeling the effects of the outbreak assume they will feel the effects in the future.
IECs who have been in the business for over 20 years (88.9%) are most likely to feel the business impact, followed by IECS with less than 2 years of experience (70.0%). Whereas those working as IECs between 3 to 19 years had similar results to the overall average findings (55.8%) on the negative effects.
When asked to describe why they felt a negative impact to their businesses, IECs were given nine options to consider and asked to select all that apply and given the ability to provide their own reason:
Client contact is limited due to social distancing.
I have to do additional work (e.g., new applicants) for the same money.
My number of clients is shrinking.
I have had a reduction in paid hourly services.
I am holding off paying bills.
I am borrowing funds to help keep the business afloat.
I am considering closing my rented or co-working office space.
I am considering or have let go an employee.
I am considering closing my practice.
The three top reasons for rethinking that were selected:
60.2% My number of clients is shrinking.
58.5% Client contact is limited due to social distancing.
25.2% I have to do additional work for the same money.
Write-in comments about the negative effects of COVID-19 centered around themes like “Reduction of inquiries for new clients,”
“Uncertainty about 2020-2021 start date, gap years, deposits etc,” and
“I've had to cancel my workshops, which generate about 60% of my income.”
In contrast, when respondents indicated that the coronavirus pandemic was not adversely affecting their businesses, they were given seven choices and asked to select all that apply and were also given the ability to provide their own reason:
My business continues to thrive.
I have added more clients during this crisis.
I already used video conferencing to connect with clients.
I am already using social media to connect with clients.
I already worked out of a home office.
My clients have even more flexibility to meet.
I am confident in my contingency plan to meet my business needs.
The three top reasons for not rethinking that selected were:
77.8% I already used video conferencing to connect with clients.
71.6% I already worked out of a home office.
67.9% My clients have even more flexibility to meet.
For those writing their own comments on the neutral effects of coronavirus, the comments centered around themes such as
“I'm relatively new to the business and depend upon referrals” and
“I was already full and no one has dropped out.”
Continue reading the IEC industry and COVID survey results blog series
IECs Living in Urban Areas are Most Affected
Written by: Colleen Krumiede, Financial aid expert
Over a decade at Stanford GSB, Caltech, & Pomona College.
Affordability advocate working in educational finance & technology companies servicing higher education. Co-Founder of Quatromoney, helping families make better, personalized financial decisions to
manage all 4-years of college costs and think about what's next.