Starting a tutoring business can be easy. Beyond your own expertise and knowledge, it requires very little upfront investment. That said, it does require a bit of ground work if you want to be successful.
Finding new clients is the biggest struggle for any new business, especially for new tutors trying to break into a market that's already flooded with competition. Even if you're a specialist in a certain subject, you'll be up against many other people from all over the world.
This article will give you some tips to make sure you're ready to stand out from the competition and attract customers. I'll also show you how to develop a strong business plan to move ahead and overcome any challenges.
8 Steps to Starting a Tutoring Business
1. Research Your Market
Before you even begin building your business, you’ll want to do some research and determine who your client base will be. Depending on your past experience and subject expertise, you could tutor anyone from elementary school students all the way up to PhD candidates.
You’ll want to identify:
- Your subject(s): The areas where you have greatest knowledge and expertise
- Your tutoring style: Whether you’ll work one-on-one, in groups, or both
- Your location: If you’ll tutor in private homes, community centers, universities, online, etc.
- Your student type: If you’ll work with children struggling with subjects in school, ESL adults, teens preparing for college, or university students
Here are some examples of areas in which you might offer tutoring services:
- Preparation for the SAT or ACT
- Language and English as a Second Language (ESL) tutoring
- Tutoring for university students
- After-school tutoring
- Subject-specific tutoring in areas such as math, history, or science
Once you’ve narrowed down your client base, research the market for tutors in your area. You can check out online communities and competitor’s websites, or ask around to see what others offer and how much they charge. This will help you define your business goals.
2. Create a Business Plan
I always preach the importance of creating a business plan, whether you’ll be working as a private tutor or looking to grow a tutoring agency. A business plan acts as the roadmap for your business. While you never have to stick with it 100%, knowing your goals and any potential obstacles can help you better plan and prepare for the less fun aspects of running a business.
Your business plan should clearly explain what makes your tutoring services stand out from others in the area. This can be your distinctive teaching method, specialized expertise, or any other qualities that make you the top choice for the job. It's crucial to be specific about what you're offering because if you're not convinced in your own services, it'll be hard for potential clients to trust you.
It doesn’t need to be overly complicated, but generally, your business plan should break down:
- Who are my clients?
- What can I offer them?
- Will I tutor in person, and if so, where?
- What tools or resources do I need?
- What business expenses do I need to account for?
- How will I market my services?
- What is my process for onboarding/offboarding new clients?
- How will I grow/develop steady income?
As a new tutor, it’s best to focus on one or two areas in the beginning. Even if you feel confident in math, history, and SAT prep, focusing on one will help distinguish you as a specialist. That’s very important for building trust with your clients as an expert in your field. Over time, you can develop your program to include more subjects.
3. Determine Your Business Type
One important aspect of any new business is ensuring your tax and legal requirements are fulfilled before you start operating. This means understanding your tax obligations and potentially registering your business. If you’re not sure, you can consult with a local small business advisor. These rules and regulations vary by location.
If you're thinking of sticking with private tutoring, it's likely that you'll only need to set yourself up as a sole proprietorship. That's pretty simple and straightforward, and you won't have to deal with a lot of paperwork or big fees. However, one thing to keep in mind is that when you're a sole proprietor, your personal finances and business finances can get mixed together, which can make things a bit tricky come tax time.
For better separation, and to protect your personal assets if anything were to go wrong, I suggest opting for an LLC (limited liability corporation). With an LLC, you can open a business bank account, file separate taxes, and have more protections than as an individual. It’s also vital if you plan on hiring other tutors or staff to grow your business.
4. Build a Website
With your business registered, you are now ready to set up a website. While it's possible become a successful tutor without a website, having a well-designed site can add a level of professionalism and make it easier to market your business far and wide.
Your website should be personable and engaging. Explain who you are and why people should hire you as a tutor. Be sure to highlight professional working knowledge in a subject area, as well as academic or other certifications that show expertise.
You can also let clients book sessions with you through your website - many website builders come with a booking feature. You can also sell or provide additional resources, or even accept online payments, which we’ll discuss more below.
5. Price Your Services
The tutoring industry is super competitive these days, especially with more and more people turning to online learning. So, when it comes to pricing, it's important to find that sweet spot. You don't want to charge too much and miss out on potential clients, but you also don't want to charge too little and struggle to make a living.
If you offer highly specialized tutoring, especially for advanced subjects, you’ll be able to charge more than a general tutor for elementary school students. Granted, it also depends on the location, as affluent areas may allow for higher prices across the board. Check your competitors to determine a rough range of how much you can charge for your market.
To set up your prices, work out your business expenses and roughly the amount of hours you’ll aim to work. From there, calculate the bare minimum you need to cover the expenses and decide what you need to earn from revenue. Knowing what you need to earn allows you better to price your services fairly from the beginning.
Once you’ve figured out what you need to earn, decide if you want to charge hourly, monthly, or through package deals. There is no right or wrong way to charge, but by factoring in variables like travel costs or educational materials, you’ll be able to find the best fit for your business.
6. Find a Payment Service Provider
To make it convenient for your clients to pay you, Pay.com allows you to accept a wide variety of payment methods. Plus, Pay.com provides the highest level of security to ensure your clients feel safe providing their details online.
You may want to invoice your clients after their tutoring sessions. Pay.com makes it simple to create an invoice link and send it directly to the client. Pay Links lead the client to a personalized checkout page where they can choose their preferred payment method and complete the payment.
You can manage all your transactions in your user-friendly Pay Dashboard. It lets you keep track of the status of all your payments, an absolute must when juggling multiple clients.
7. Market Your Business
After you’ve gotten all the administrative tasks out of the way, it’s time to find clients. In an ideal world, they’d come to you, but unfortunately, as a new business owner, you’ll need to put in the legwork to bring in new business.
There are several simple ways to promote your tutoring services and reach potential clients. Setting up a strong social media presence and interacting with people in your target audience (for example, the parents of children if you are targeting young students) can be very effective. You can also use search engine optimization (SEO) and paid search ads to attract more attention, especially if you are planning to offer online tutoring.
Additionally, you can post flyers in areas that are frequented by your potential clients, such as university student unions, or community libraries. Plus, once you get a few clients, ask them for referrals, as word-of-mouth marketing is a free and often more trustworthy way to gain new business.
8. Grow Your Business
Once you’ve gotten a few clients, you’ll want to work to keep growing your business. Success doesn’t happen overnight, but you can learn from your experiences, including your failures. Ask your clients for feedback on how to improve your services and integrate it into your business. This will help you continue to develop your skills and abilities when it comes to teaching others.
You can use your knowledge to create resources and learning materials, which can help grow your business, especially if you sell these resources to others. You could even develop online courses, which add value to clients, increase the recognition of your business, and can help diversify your income – a great safety net during business lulls.
As a tutor, it's important to always be learning and growing. Keep yourself sharp in your subject matter, check out new tools and resources in the teaching community, and above all, keep learning.
The Pros and Cons of Starting Your Own Tutoring Business
Here are the pros and cons of being a tutor:
- You can work locally or work online and appeal to clients from all over the world.
- You have the ability to set your own schedule.
- There are few initial costs involved.
- There may be times when there is less work available, such as during summer or winter breaks.
- Parents may have high or unrealistic expectations for their children's progress.
- The market may be crowded, which can make it challenging to establish yourself as a tutor.
The Bottom Line: Is Starting a Tutoring Business Right for You?
If you have a passion for sharing your knowledge, starting a tutoring business can be a great opportunity. You can be your own boss and work on a flexible schedule, while also providing a positive impact on your clients’ lives.
Starting a tutoring business isn't expensive, but with all the competition – both local and from online tutors around the world – it can be tough to break into the market. With a bit of business acumen, a solid business plan, and great client management skills, you can be successful.
When it comes to accepting payments, Pay.com can get you set up in just a few easy steps. With a simple onboarding process, you can be up and running in no time. Plus, with the Pay Dashboard, you can easily manage and track your payments, view reports, and create payment requests, all in one place.