How to Start a Tutoring Business

A few questions you should be asking include:

• What does the current market in my area look like?
• What niches do local tutoring businesses cover?
• Is there a need for my specific niche?
• Is there room for profit?
• What do local tutoring businesses charge?
• Will I work from home or an office?
• Do I have the proper supplies and material?
• Will I travel to students?
• Will I need to hire tutors to keep up?

Before setting up a tutoring business, scope out the competition. Once your business is up and running, these are the businesses you will need to keep up with. Find out all you can about their services, prices, and customer base. More importantly, this step will allow you to determine a way to help your business stand out from the rest.

Depending on your experience in this field, it's wise to ask current and potential clients questions about your services. Find out how you can improve and what works for your current students. In addition, ask potential clients about their experiences with other tutoring businesses, as well as what they would expect from a good tutor.

Certain factors can affect your growth potential, such as location and overpopulation in the industry. If your area already has a large number of tutoring services available, your business could get lost in the crowd.

Your research should include additional reading as well. Numbers and statistics may be great for determining the likelihood of your business success in your location, but are you prepared as well? There is always room to learn more about the tutoring industry and books are a great way to unlock new tutoring strategies and services.

Best books to read before starting a tutoring business:

• How to Start a Home-Based Tutoring Business (Home-Based Business Series) by Beth Lewis.
• How to Start a Tutoring Business: A guide to starting your own tutoring business by Tutor Cruncher.
• How to Make Over $4,000/Month Tutoring by Mark and Erik Krupp.
• Smart Marketing For Tutors: A Step-by-Step Guide To Building Your Online Tutoring Business Using Free Marketing Tools by Victoria Olubi.
• The Novice Tutor: Answers to Your Questions About Running a Successful Tutoring Business by Adrianne Meldrum and Killian Piraro.

Who will you be offering your services to? While deciding on your niche, you should have thought about who you will serve. Will you focus on college students or high school graduates? Or both? Once you've decided on your target market, determine the need for your services in the area.

Defining your ideal target market will be beneficial in the long run, as it will help determine your services, costs, advertising requirements, and materials needed. For example, if you plan on tutoring school children, especially those under 16, then consider their parents as primary customers.

Start by listing important points about your target market:

• What time will they be at school or work?
• What are their traveling constraints?
• Do they expect home-based tutoring?
• How often will they use your services?
• What are they willing to pay for your services?
• Do they want one-on-one sessions or group sessions?

Formal training will provide you with advanced knowledge of key tutoring strategies and methods, which will enhance your professional credibility. In the United States, you generally don't require a specific qualification to become a tutor. However, there are multiple training options for tutors to consider.

If you're an individual with a bachelor’s or graduate degree in a high demand field, such as English, mathematics or science, entering a tutoring certification program will be enough to get you started. However, if you wish to work in a classroom, formal training in education will be your next step.

If you decide to start a home-based tutoring business and work from home, you will save money on rent and travel expenses. However, this means that clients will need to travel to you which could be difficult for students without a car.

The size of your home also limits the number of students you can teach at a time.

If your business grows, you may want to rent an office space where you can create a classroom for more students. Not only will you be able to teach more students at a time, but you could also be based near schools or along public transport routes.

Online tutoring services have gained popularity due to widespread use of technology like free voice over internet services and video sharing platforms like YouTube. Parents and students alike have become comfortable with online tutoring. With this option, you get to work with students from diverse cultural backgrounds and geographic territories.

Tutoring is no longer just the test preparation many families and schools have come to know. In today's market, there are different options to consider that have been established to help clients at different academic stages.

These stages include, but are not limited to:

• Pre-K tutors.
• Elementary tutors.
• General tutors.
• Special education tutors.
• Speciality subject tutors.
• Test-prep tutors.
• Homework tutors.
• Admissions and application tutors.
• Student tutors.
• Language and ESL tutors.

This section should describe your business, define your mission, and highlight what makes your business stand out.

You should let investors know which legal structure you plan to register as. Many businesses choose to register as an LLC.

Explain how you plan to launch your business. For example, you could offer discounts on lessons or offer a free lesson when clients pay for several lessons at once.

While simple, it should be made clear that you charge clients per lesson or offer a discount for multiple lessons (or multiple children in a family).

List the job titles of any staff members that will need to be working for the business at its launch. Name yourself as the owner and head tutor, for example, and mention any other tutors you will be working with.

Explain who they are and include some information from your market research about the target market's preferences.

List the promotional outlets you plan to use to advertise your business.

Name your closest competitors and describe how your businesses are similar and how your business is unique.

List your startup expenses, sources of funding, and revenue projections.

Describe how you will expand your business in the future by hiring more tutors or offering more subjects.

The name you operate under will represent your services to the outside world. Therefore, it's important to evaluate your different business name options before officially choosing a name. Your business name should be catchy, memorable, and accurately describe the services you will be offering. Write down your name ideas and ask people for their opinion on your ideas.

Before you settle on your name, check with the Secretary of State's (SOS) office in your state to ensure that your business name is not already registered with the SOS.

There are four common business structures:

• Sole Proprietorship: owned and run by one individual. No legal distinction between the owner and the business.

• Partnership: a legal agreement between two or more individuals who share management duties and profits.

• Limited Liability Company (LLC): offers the protection of a corporation but only the owners pay taxes on business profits.

• Corporation: the more formal structure available which includes offices and a board of shareholders.

With a partnership or sole proprietor, you will have an easier time filing your taxes. However, if you choose a corporation or LLC, you are able to limit your liability for anything that happens while you manage your business.

Each business structure offers its own advantages and disadvantages. Your ideal business structure should provide you with the best liability protection, and tax and financial benefits.

If you plan on hiring employees for your tutoring business, you will need a federal Employer Identification Number (EIN) from the IRS. Also known as Federal Tax ID Number, the number is used to recognize taxpayers who are obligated to file different business tax returns.

To get an EIN, you can complete an online application on the IRS website. There is no filing fee. If you are unable to apply online, you can also get an EIN by mail or fax.

To ensure that your personal and business finances stay separated, your best option is to open a business bank account. Opening a bank account will also help with clean audits, and present professionalism.

Contact your local banks for the different business accounts available.

Some of the best banks for small businesses include:

• Azlo.
• Chase.
• U.S. Bank.
• Wells Fargo.
• Comerica.
• Popular Bank.
• Axos Bank.

As a business owner, it's essential that you research the different types of insurance suitable for your specific business and industry. Because every business is different, you may require different types of insurance.

Consider the following:

• Business interruption insurance.

• Liability insurance.

• Property insurance.

• Health insurance.

• Cyber insurance.

For tutoring businesses, liability insurance is a popular choice. Liability insurance will help provide peace of mind to parents and the business owner, ensuring that the business is protected financially for any situation that may occur.

Professional indemnity insurance is another option for tutors to consider. It will be able to pay out if a client claims they’ve made a loss because of your services. For example, if you haven't covered a part of the syllabus and your client/student doesn’t perform well on their exams because of it, your client may decide to take you to court, which is where your professional indemnity insurance would be beneficial.

For more information on which types of insurance are required based on your type of tutoring business, visit your local municipal government office.

In order to legally operate your business, you may need to obtain special licensing and certification. Failure to obtain certain certificates and licenses can result in substantial fines, or even force you to close down your business.

State boards of education often require tutors working in school environments to be licensed. However, private tutors may establish their own rates and advertise their services to the public. These private professionals are not regulated or licensed. Therefore, private tutors do not have to meet any additional training requirements beyond their chosen credentials.

Because tutoring is not regulated at a state or national level, both entry-level and experienced tutors have the option to choose from a range of tutoring certification programs to develop new skills and become certified.

If you wish to study further and enhance your skills as a tutor, you may pursue basic and advanced certifications from the National Tutoring Association and the College Reading and Learning Association.

You will have to manage differing tax responsibilities, depending on the type of legal business structure you choose. When selecting your business structure, you should have educated yourself on the forms you will need and the types of taxes you must pay.

With a partnership, S-corporation, and multiple member LLC, owners must report a share of the business taxable earnings on their personal returns. They are also responsible for paying the income tax on it.

With a sole proprietorship or single-member LLC, your business will have to file business taxes as a sole proprietor. Sole proprietors use a Schedule C to separately report revenue, deductible business expenses, and net profit.

With a corporate structure, your personal tax returns will not be affected as your business is seen as a separate legal entity that reports revenue and expenses with a Corporate Tax Return, Form 1120. Your business will have to pay the tax on profits, which are taxed at special rates that only apply to C-corporations.

If you plan on working as an independent contractor, the Internal Revenue Service will consider you a small business owner. To ensure you keep track of your tutoring profits and expenses, record all transactions throughout the year.

To ensure that your tutoring business is operating in the best financial state, you may need to obtain accounting software or hire an accountant.

Accounting software. This software will help simplify accounting processes, such as expenses, tuition, payment processing, and reporting. There is a range of free accounting software.

Hire an accountant. It's wise to research the benefits of this option. They allow for fewer mistakes and less time worrying if your taxes were in order.

Prepare a business presentation and ask family and friends if they're willing to invest in your tutoring business.

If you need more funding than you or your family and friends are able to afford, applying for a loan is a good alternative. Find out more about small business loans.

With crowdfunding, you will need to raise money by appealing to the online community. This option is often used in exchange for gifts, future products, or other small rewards.

Before you start your business, make sure you are prepared for success by stocking up with the appropriate stationery, office supplies, and equipment. By creating an effective system and stocking up with the proper tools beforehand, you will be properly prepared for your first student.

Tutoring Materials:

• Pencils.
• Erasers.
• Pens.
• Paper.
• Calculators (if necessary).

Start by preparing at least 3-4 lessons for each subject and level you plan on teaching before you officially launch.

For example, some of the most successful tutoring businesses offer their own learning handouts as marketing material for their business. Apart from including your contact details and business logo, a handout of personalized learning material also gives the impression that you are experienced and that your teaching style is student-friendly and effective.

At first, you may choose to work alone as you will probably have a manageable number of students. If you think that hiring more tutors to cover a variety of subjects would be beneficial, you should look for suitable candidates.

Once you have decided which employees you need, you should create job descriptions for each role to outline exactly what is expected.

Post your job descriptions on online job boards, in newspapers, or on industry-specific social media groups.

After reading through applications, you should invite suitable candidates for an interview.

If you find the right individuals to fill your vacancies, make them employment offers and draw up employment contracts. You can ask a lawyer to do this for you to ensure that the contract is legal.

While studying your competition, you will get an idea of what to expect with pricing. Make sure you don't charge too low for your services, especially if you plan on traveling and creating your own materials. Your rate should be fair and match your quality of work and experience.

There are many factors that will affect your hourly rate. A general tutor charges between $17.00 - $45.00 per hour, depending on your location, education, and experience. If you have extensive experience and certification, you can charge up to $75.00 per hour.

Do you plan on offering home-based tutoring or will you meet at a public location? As your location will play a major role in your business success, you should be prepared for the traveling expenses you may need to cover. For example, if you have three students in different parts of your area, you will need to consider traffic, time-constraints, and gas expenses.

For example, your average traveling time is 30 minutes for a round trip. This means a 1-hour session will require 1.5 hours of your time. So if you want to make $20.00 per hour for your tutoring services, you should consider charging $30.00 for that 1-hour session.

As some subjects are in demand, you may adjust your hourly rate according to the subject. If you are skilled in any of the subjects listed below, with the exception of English, you should contemplate setting your tutoring rate above the average for other tutors in your area with related experience.

Subjects that are in high demand:

• SAT prep.
• Biology.
• Mathematics.
• Science.
• English.
• Chemistry.

The highest paid tutors are experienced, often charismatic people with prestigious degrees or certification. Generally, college students and individuals with minimal tutoring experience will charge less than the average rate.

Before you officially start your business, it's wise to invest in a solid marketing plan. Having the appropriate skills and acquiring the proper supplies does not mean customers will arrive in droves. Instead, you'll need to market your business. During the early stages of your tutoring business, you will need to rely on small scale advertising activities like fliers, word-of-mouth, or going door-to-door.

Your marketing strategy should be based on the image and values of your business. What message would you want it to convey to the public? To help sort out your different marketing ideas, compile a list of the services you're offering and what type of values your business will hold.

Distribute your business brochures and business cards at libraries, recreational spaces, PTA meetings, neighborhood get-togethers, colleges, etc.

All the important information about your business should be on your website including costs, location, policies, values, mission statement, services, contact details, and more. You can create a website with a website builder.

Social media is an easy way to access thousands of potential clients. However, it does require constant updates and admin support. Furthermore, there are additional charges for advertising your business to larger audiences.

When clients search for "the best tutoring business near me," you will want your business name to appear in search results of the first two pages. To do this, you will need to invest in a proper SEO strategy and register your business with Google.

In the tutoring profession, small tutoring businesses that are home-based start accepting jobs steadily, growing their customer base with each new client. However, if you plan on working from an official office space, a grand opening is a great way to attract new clients.

This will help create a celebratory atmosphere, attracting interested customers located in your area. Clients won't easily walk into your establishment on day one and immediately book your tutoring services. Therefore, you should be prepared to answers all the questions about your experience and offers.

As your business will require a lot of traveling and daily tutoring sessions with different clients, be prepared to follow a strict schedule. Your daily schedule will depend on the size and scope of your tutoring business. You don't want to arrive late for appointments or have to cancel because of scheduling conflicts. This will reflect poorly on your business reputation.

Your schedule should allow you enough time to set up your materials and travel to different clients, as well as ample time for additional processes, such as progress reports with parents or appointment scheduling.

If you are opening a major tutoring business, you will require additional employees. To prevent scheduling conflicts, ensure that all your tutors have their daily schedule. Consider different factors, such as employee leave, job estimations, available materials, part-time employees, employee breaks, and shift changes.