Thinking of starting a tutoring business? Former or retired educators, college students, people with a specific skill-set or ability, or even fast learners with an appetite for helping others can jump into the world of education with a home tutoring business. School children and their parents have more demands than ever and large class sizes often leave students of all ages (elementary through college) struggling with key concepts. If you have a basic knowledge of the sciences, mathematics, or humanities (or if you are resourceful and know how to study and brush up on concepts), tutoring could be a viable and profitable business, even if you have no prior teaching experience. Even better: your tutoring business might start with just you at the helm, but it’s a business that even offers growth and expansion.
Five Steps for Starting a Tutoring Business
1. Decide Your Niche
Maybe you excel in several subjects or maybe you have a specific skill that you can teach. Before you start your business, decide what type of tutoring you will offer. There are myriad topics to explore in the world of tutoring. You could offer tutoring for organization/study skills; autoCAD; a second language; a core subject; high school or college test prep; professional certifications, etc. As a tutor, you are a guide to help a student grow a new skill, so the key is to think about what you would enjoy tutoring and develop a brand/market for that niche. You do not need to be an expert in all subjects; teaching is about fostering growth and helping students learn how to tackle hard things. It’s easy to brush up on concepts prior to a lesson, but it’s much harder to know when to let a student struggle with an answer and when to assist; when to take a break and when to push. No matter what, you should be competent and confident to tutor any niche you choose.
2. Explore the Competition
A few years back, I trumpeted an idea for a business on my Facebook page, and to my dismay, my friends replied with links to businesses that were similar or identical…in my own city. I had failed to scope out the competition, research what already existed, and decide how my business would be different. Before you can make decisions about your own business, you need to explore other tutoring businesses. What are the tutoring options in your area? Are they in-home or online? How much do they charge? Are there specific praises and complaints about the tutoring businesses? The more you study what is already available, you will have a foundational understanding of what your clients expect or want (and if you can see a place for your business to fill a void, even better!), and you will have obtained baseline data on the competition.
3. Develop a Business Plan
You have a niche, you have an understanding of the business expectations, and you have studied the competition. Next comes the business plan. Business plans can have different formats and information, but the function is the same: this is a practical tether that defines your tutoring business and outlines the goals and costs necessary to launch. Included in the plan is your elevator pitch, your company name, financial plans (what are your costs? How much will you charge?), marketing strategies, and the structure of your business (are you providing help online or in-person? Do you hope to hire others to work as tutors for your business?). During the business plan stage, you should ask yourself any questions that may come up and have answers ready. What is your cancellation policy? What does student onboarding look like? How will you communicate with parents/clients? Do you have any specific skills that set you apart from the competition? (For example, do you have experience working with students on the autism spectrum? Or ADHD? Do you speak multiple languages? Advanced degrees?)
Business plans should include potential roadblocks and brainstorm possible solutions. They should not embellish or over-promise but become a practical tool you can use to make business decisions early on.
Put this plan in writing and do not be afraid to share it with others to receive feedback. A small business is important–it’s your livelihood and your baby– so a fresh perspective is needed. Have someone familiar with business finances look over your numbers or run your marketing plans by someone in your targeted demographic. Always trust your instincts and your research, but don’t be afraid to heed advice from experts.
4. Create Your Business
This is the moment where you walk your idea off the paper and out of your brain. Register your business with the government and get your tax ID number. Set up a website and your social media presence. If you are going to register your business as an LLC or if you need to register with your state or city, do those things. Print your business cards and decide what additional marketing materials you need to order ahead of time. (Get a trusted copywriter or copy editor to look over your copy! It would be rough to print up marketing materials for tutoring and find an egregious error.) Set up an email address, phone number, and bank account. This would also be the time where you would want to look into accounting programs, bookkeeping software, or online scheduling software, or ask a professional about what types of business insurance you may benefit from.
5. Discover Clients and Market Your Business
Once you have thoroughly planned and prepped your tutoring business, the next step is to market your business, generate leads, and book clients. In the business planning stage, you examined your marketing tactics and costs, and in the creation stage, you prepared those advertisements and promotional materials. The last and final step is to employ those strategies and get the word out. It is imperative that you have systems in place to respond to inquiries and funnel leads.
Experiment with advertising and pay attention to where your competitors are or are not advertising. It’s not enough to start a business and sit back and wait for the clients to start showing up; you will need to hustle in those early months and spend some advertising money. There are numerous marketing resources out there depending on your audience and your vehicle (word-of-mouth, offering free lessons, Facebook ads, Google ads, print advertising in local parenting/school magazines). Think of ways to keep your business active and engaged on social media, and be ready to adapt and change as trends come and go.
How to Fund Your Tutoring Business
Starting a business is not without some startup costs. It’s important to sit down with your business plan and itemize your initial business costs. What will you need to start a website, order business cards or promotional materials, run ads? Are you basing your business at home? Do you need to make any improvements to the space? No matter what the costs are, here are a few ways you can fund your business.
Personal Finances
Maybe you’ve been saving or maybe you’ve received a lump sum from a generous benefactor. No matter what, mixing your personal finances with business finances is risky. If your business fails, you are out the money you put in without any chance of recovering that loss. It is an option to finance things with your bank or credit card, but you should understand your financial situation clearly before you choose this route. Also, the Small Business Administration local offices offer free counseling and advice; don’t be shy and pay them a visit to see if they have any financing tips.
Credit Cards
There are some benefits to credit cards. Instant purchasing power and rewards come to mind. However, be wary of business credit cards that have high or variable interest rates. It can be easy to let credit card debt run away from you, and missing even one payment can cause your rate to skyrocket. Our Merchant Maverick credit card expert recommends looking into Chase Ink Business Cash or Capital One Spark Classic, both have cashback options.
Personal Loans
Again, anything personal is a risk, but a personal loan is one way to gain some immediate capital. Personal loans have decent interest rates and loans are expected to be repaid within three-five years. Some good options for someone opening a tutoring company include LendingClub, Lendio, and Upstart. A new tutoring company may not qualify for a business loan, but you can always check with your bank.
Grants
There are many different types of grants available and your local Small Business Administration will have a more comprehensive list. Grants require a fair bit of writing and can be highly competitive; however, if you are starting a tutoring business in a niche topic or in a needed area, there might be grants available.
ROBS
ROBS (Rollovers as Business Startups) is a fancy term for when you use retirement money as startup costs and avoid paying a withdrawal penalty. If you have the ability to use ROBS and you find that your startup costs are above what you can comfortably pay, consider this as an option.
The Joys of Tutoring
Following these steps and helpful tips will help you start your world of tutoring. Working as a tutor isn’t for everyone, but the joy of learning with students and seeing their excitement when they finally grab a concept or jump a school hurdle can indicate a true calling. A tutoring business is a fantastic way to put your own knowledge and education to use and create a business with flexible hours, a deep well of potential clients, and opportunities to expand.
