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How can I get started with my own financial counseling business?

Welcome to NACCC Knows, where we answer questions from financial counselors, career coaches and other helpers in the credit counseling and financial coaching industries. This week’s question is about starting a financial counseling business. Read more to learn where to start when starting on your own.

Chuck T. asks:

I’m interested in starting my own financial counseling business but I’m not sure where to start. What should I do?

Starting a business is always a daunting and exciting venture, especially when you are building a business that helps others. But it isn’t without risks.

At the National Association of Certified Credit Counselors, we receive a lot of inquiries about starting your own financial counseling business.

The first step is demonstrating you are proactive and have the necessary knowledge, skills and abilities to be an effective financial counselor. Of course, we recommend starting with a certification from NACCC or another reputable organization.

Aspiring financial counselors who choose NACCC can get started with one of the following designations:

Certification demonstrates a commitment to the craft and a valuable education. It also demonstrates that the counselor has shown competency through testing. This builds confidence in both the counselor and consumers seeking their services.


Check your state’s rules and regulations

Rules and governing bodies vary by state, so it is important to consult governing bodies in your state to make sure the business opens by the state’s rules and regulations.

At minimum, a new business owner needs to incorporate with the state and obtain an EIN number (tax ID).

Be careful with search engines! Many online businesses offer “services” and charge aspiring business owners to complete tasks the owner can easily complete themselves. It is always best to speak directly with governing bodies in your state. Remember: official websites for governing bodies usually have addresses with “.org” or “.gov” and will provide clear contact information.

It is important to remember that financial helpers (financial counselors, credit counselors, career coaches) are not licensed mental health professionals and not lawyers. The financial issues clients have may be influenced by psychological and legal issues, but a financial counselor does not provide any type of diagnosis or legal advice.


Write a business plan

A business plan keeps new business owners on track and motivated. At minimum a business plan should include:

  • A mission statement: what the business does, why the business does it, and who the business serves
  • A SWOT analysis (assess strengths, weaknesses, opportunities and threats)
  • The numbers: how much capital is available to start the business, rates, projected expenses and earnings
  • Identify customers: age, gender, socioeconomic status, desires, location, etc.
  • Identify competition: what businesses and organizations offer similar services in the area?

A more detailed business plan will include branding, marketing plans, technology needs, staffing needs, projected growth and more.


What about office space?

Depending on the area, the cost of an office may be too big of a financial burden.

A home office is useful for general administrative work, but we strongly recommend meeting clients outside of the home. It is important to maintain privacy and personal safety when meeting clients.

Some cities have coworking spaces that serve as low-cost alternatives, where office space and equipment is shared by multiple businesses, freelancers and entrepreneurs for a lower cost than traditional rent.

Free (or close-to-free) options for meeting clients include:

  • Coffee shops and similar businesses
  • Library meeting rooms
  • Community center meeting rooms

We recommend trying to use a space like library or community center meeting rooms first. They offer privacy and no expectation to make a purchase to use the space.


Get involved in the community

Look for local entrepreneurial and business groups for networking opportunities. Also network with local nonprofits and community organizations. This can be as simple as introducing oneself and sharing a card!

Some people think they are not the “networking type,” but if they are starting their own financial counseling business, they don’t have a choice. It becomes more comfortable with each introduction, handshake and “Hello!”

These types of networking opportunities may be less available in more rural communities. Getting online and using social media allows business owners to cast a wider net and meet other experts and entrepreneurs from around the country. A great place to get started is Experian’s weekly #CreditChat on Twitter (we can usually be found tweeting there, too).


Finding financial counseling clients

Find places throughout the community where local businesses can leave fliers or business cards (start with local businesses, career centers, community centers, libraries and other similar places). The website should include contact information such as an email address, phone number and mailing address (if the business does not have an office, we recommend using a P.O. box).

Local listings on Google and other map services are a great way to make sure contact information is available to those seeking financial counseling services. These listings show legitimacy and build trust with potential clients.


What about the name?

The name can be a personal name or something more creative, but it should let potential customers know the business is involved in financial counseling. NACCC recommends avoiding words like “debt settlement” or “credit repair.” Learn why “credit repair” is a bad word in the financial help industry.


Never stop learning

Keep up with the industry by following news, magazines, websites, financial and career blogs (like ours!) and industry leaders on social media. Meet with industry peers to share information and advice.

Take time to reflect on your daily work and what you are learning through your experiences.


Take the first step

The best way to get started is to take the first step. Make a plan and get started today!

Have a question of your own? Leave a question in the comments below, email us at [email protected] or tweet us a question.

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