How to start a tutoring business

Aug. 12, 2020

Although the COVID-19 pandemic has undoubtedly thrown a wrench in conventional learning, there’s one silver lining for educators: a tutoring boom. “Parents are worried that their kids are falling behind,” says Will Li, chief education officer and co-founder of TutorOcean, a virtual learning platform. Anxieties that stem from last spring’s rapid switch from in-person instruction to distanced learning and uncertainty around what the 2020-2021 school year will look like are driving many to explore additional resources such as online tutoring, he notes.

In fact, private tutoring is forecast to grow at an annual rate of over 7% and reach a market size of $279.3 billion by the end of 2027, according to a recent report from ResearchandMarkets.com. Li is seeing this growth firsthand, noting, “Our platform sees ongoing, 20% month-over-month increases in new users, including this past July, a month in which we more typically see a summertime slowdown.”

Start a tutoring business and a piece of that lucrative pie could be yours. “It has never been a better time to be a tutor with many people newly unemployed or working reduced or more flexible hours,” says Li. “It has also never been easier to find a much-needed supplemental income from tutoring.”

But how do you do it? What do you need to know? And how can you increase your odds of success? Here are tips from Li and other experts to help get you going.

1. Decide if a tutoring business is right for you

Before you take any steps toward launching your business, determine whether or not business ownership is your best path. “Aspiring tutors need to ask themselves whether they want to be businesspeople or they want to teach,” says Caitlin Meister, founder of the Greer Meister Group, a practice of private educators who tutor kids throughout the New York City area. “If you only want to teach, you are best off working with an established tutoring practice that can handle the myriad demands of running a business and free you to do the best teaching you can do. On the other hand, if you have the entrepreneurial spirit to launch a new business in the midst of a pandemic, a strong source of initial client referrals and strong credentials that you can communicate well, there is definitely an opportunity.” 

 Li adds that professional tutors will need to do proper bookkeeping, pay relevant taxes, be prepared to deal with no-shows, advertise their services and solicit reviews and recommendations.

Becoming a successful business owner also requires investing time and energy over the long-haul. “Like any startup, it takes time to build a business as a tutor,” says Li. “It takes time to build up a reputation and gain the trust of parents who will start providing word of mouth.”

2. Consider your expertise 

What type of tutoring will you specialize in? Will you focus on younger kids, test prep, subject-specific tutoring, special needs students, etc.? 

Beyond that, you can boost your business simply by leaning into the basics that parents are looking for. “A tutor should be an expert in the subject they are tutoring, have good communication skills, a mentor mentality and the flexibility and creativity to meet student needs in engaging ways,” says Becky Ward, a professional tutor for 13 years who currently serves as an education experience specialist at online tutoring platform Tutor Doctor.

3. Plan your budget

Setting a sustainable budget and sticking to it is a big part of being a successful business owner. Consider the following when determining your budget: 

  • What business costs might you incur to set up shop? 

  • Do I have, or can I obtain, the right materials and supplies?

  • Will you need new equipment or a dedicated space to work? 

  • How much money will you need to cover your living expenses?

  • How much can I charge? Is that enough to be profitable?

  • Will I hire other tutors or do it all myself in the beginning? 

If you plan to quit your day job to pursue a career as a tutoring entrepreneur, it’s a good idea to set aside money to cover at least three to six months of living expenses. But you might also decide to continue working while you launch your business, using your tutoring money to build a savings account to cover lean times that may arise when you're ready to quit your job and run your business full time. 

4. Do some market and competitive research

Invest time in market research and consider your competition. Then answer the following questions honestly to determine the likelihood of your tutoring business success: 

  • What are the other tutoring businesses in your area? 

  • What do they specialize in? 

  • How much do they charge?

  • How can you set yourself apart?

If you’re interested in letting the market influence the direction you go in, consider the fact that the subject area that’s in highest demand is STEM (science, technology, engineering and mathematics), followed by language training, according to Li.

5. Choose a name for your business

“Establish a name, a logo and a tagline or catchphrase for your business,” recommends Ishmael Brown, Jr., president of the National Tutoring Association (NTA). “You want something that is kid- or family-friendly.” 

Ask other people's opinions on the name. Search for the name in Google to make sure other companies aren't already using it — you want to stand out.

6. Deal with financial and legal issues

Speak to your tax accountant about what kind of business structure is best for your company. And also consult with a small business lawyer to find out about local ordinances, liability issues and other aspects of business ownership. 

“It is important to know of any local laws or regulations surrounding tutoring,” says Ward. “For example, in some localities offering group tutoring to home-schooled students could mean that you need to register as a private school.”

7. Create a plan to bring in clients

“Someone trying to get into tutoring for the first time needs to figure out who or what their initial source of clients is going to be. Do you have a friend, family member, or colleague who works with children, is trusted by families, and can recommend you?” You might also snag leads through another tutor who has more students than they can take on, a pediatrician, a music school director or a coach of a kids' sports team, says Meister.

And once you’ve connected with a potential client, you need to be able to communicate the credentials that set you apart from other new tutors and your value in order to bolster your initial success, notes Meister.

Jenn Cohen, owner of LaunchPad Education, a Dallas-based tutoring firm that specializes in test prep for students who learn differently, also strongly advocates having an online presence and starting a blog. Offering tips and information about your services will demonstrate to families that you're an expert in your field.

8. Ask for help when you need it

Don’t be afraid to ask for assistance. Network, ask for advice and learn from other people. 

Organizations like the Small Business Administration, as well as networking groups like Lions Club International or Rotary Club, offer excellent resources for new business owners.

Start-up business owners often struggle, but if you invest time and energy and provide exemplary service and competitive prices, soon you’ll be the one offering advice to other tutors starting a company.

The fact of the matter is that the demand for tutors who can successfully navigate a variety of school curricula will be intense going forward, notes Meister. She says that if you’re up for the challenge of giving a tutoring business your full energy and have the expertise, this is the right time to dive in.

Tips and stories from parents and caregivers who’ve been there.

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