If you’re looking to launch a profitable side hustle, knowing how to start a tutoring business is a fantastic option.
Not only are parents looking for qualified individuals to support their kids in improving academic weaknesses, but a significant segment of society also seeks private tutors for various services such as homework help, college entrance exam preparation, and second language development.
In addition to school-aged children, there are plenty of adults (think college students, second language learners, etc.) who desire to improve in some area and need guidance in doing so.
This post outlines how to start a tutoring business from home whether you want to do so in person or online.
How to Start a Tutoring Business
Following these 9 simple steps, you’ll learn how to start a tutoring business with less stress and overwhelm.
1. Set Your Income Target.
Many individuals start their tutoring business with a business plan. That business plan may include information about your revenue goals.
Think about your desired income target.
How much money do you want to make in your first year?
Setting income goals guides the actionable steps you must take week by week and month by month to reach your income goals.
If your desired income goal for your first year of tutoring is to make an extra $25,000, then break that number down and see how much you would need to earn each week in order to make that happen.
The more revenue you plan to make per month, the more aggressive you’ll be with your marketing tactics.
2. Estimate Potential Expenses.
Knowing how to start a tutoring business means facing the reality of expenses.
A huge positive to starting a tutoring business though is the low start-up costs.
You’ll most likely tutor at the client’s residence, your home, or in some cases, the child’s school.
If you plan to go to the client’s home or school, account for gas expenses.
A positive to going to clients’ residences is that you’re able to charge more per hour.
The other main expenses you’ll have when starting your tutoring business include study resources and promotional materials for marketing purposes.
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3. Research a Suitable Niche.
Finding a suitable niche means knowing your market.
If you want to be able to scale your tutoring business, identify market niches where demand exceeds supply and/or where the demand is willing to pay higher prices.
Suggestions:
- Look up tutoring businesses in your area. See for which subjects they offer services and at what price points. If a company or individual charges a certain amount, you know that you too can charge comparable rates, all other things being equal.
- Niche down. If your target audience is elementary-aged students and businesses in your area charge considerably less for tutoring that age group, niche down by specializing. For example, you could market yourself as a specialist in math or a reading interventionalist. Or bilingual education, special ed., etc.
- Research tutoring businesses in higher-income areas. You’ll ideally want to focus on this customer segment if you plan to charge higher fees.
- If you want to tutor high school or college students, you have a greater advantage. Because of the perception that high school and college subjects are harder to master, parents/clients generally spend more money on those services without much hesitation.
4. Reflect On Your Talents and Strengths.
When knowing how to start a tutoring business, this step is often neglected.
Though starting a tutoring business doesn’t require any highly- specialized skills, you do need to examine how well your talents and strengths align with the niches you’d like to target.
Maybe you don’t consider yourself an expert in ACT prep, but if that’s your targeted niche, do you have what it takes to learn the structure of the exam and its content?
Will you confidently be able to teach those skills and strategies?
If you’re targeting elementary students, you may feel okay with the content, but are you comfortable working with this age group?
So consider your comforts and preferences.
5. Price Your Services.
If you want to understand how to start a tutoring business that is profitable, think hard about your pricing.
What you charge for tutoring services depends on many factors mainly location, demand, experience, reputation, and niche.
Assuming you’ve done your market/niche research and know what comparable businesses charge, be sure to charge your worth.
Start your prices relatively high as many people correlate quality with a price point. Differentiate yourself with the value you provide.
Sometimes the biggest difference is in the relationships you form and cultivate with clients.
Additionally, you can charge more for tutoring during “off” times such as weekends and holidays.
Also, consider discounted package pricing for clients who pay weeks in advance. This is a better value overall for you and them.
6. Draft a Tutoring Policy Contract.
Knowing how to start a tutoring business means understanding that it’s a business.
Drafting a tutoring policy is very necessary because individuals may not always act in your best interest.
A tutoring policy contract creates boundaries and outlines professional ethics. It’s presented and agreed to by the client before any services take place.
Draft a decent tutoring policy, and most importantly, stick with it. Not following through or showing leniency with certain clients isn’t in the best interest of your business.
Following are a few topics you may want to cover in your tutoring business policy:
- Missed sessions
- Group tutoring (rates and person limits)
- Payment due dates
- Late payment policy
- Absences
The importance of having a written tutoring policy cannot be stressed enough. It will reduce headaches, disputes, and miscommunication.
7. Build Your Tutoring Curriculum.
Think about the materials you might use to tutor clients and consider using similar materials with all learners to keep things streamlined plus consistent.
Of course, modify things here and there, but a comprehensive study guide is a practical idea.
You want to choose materials that are standards-based (according to the school’s curriculum), and student-centered.
8. Register Your Tutoring Business.
While sole-proprietorship status is a good choice when first starting your tutoring business, register your tutoring business formally with your state earlier if you feel the need to do so.
Some individuals go the LLC route. Speak with a lawyer or tax professional about your individual needs and business goals.
Whichever path you take, it’s a good idea (but not always necessary) for your tutoring business to have an EIN number.
9. Market Your Tutoring Business.
The easiest way to begin marketing is by word-of-mouth and leveraging your existing network.
Make connections with local schools, relevant organizations, and libraries in your targeted areas.
And consider online marketing, such as LinkedIn, YouTube, and Facebook, as it’s a great way to grow a client base organically.
Strategic marketing is arguably the most important step in learning how to start a tutoring business.
To supercharge your marketing, consider creating a simple website with Wix. Also, use Canva’s simple graphic design software to create a business logo for your website.
10. Invest in Your Business and Yourself.
If you’re in the tutoring business for the long run, consider the following options…
- Formalize your business with an LLC or other appropriate entity appropriate. Talk to your tax professional to see which option is best for your business model.
- Use a separate bank account for your tutoring business transactions.
- Have a system for handling transactions.
- Congregate with like-minded individuals. Not only do you learn new marketing techniques, but you also network with others in your community.
How to Start a Tutoring Business
Is a tutoring business profitable?
Yes, a tutoring business can be profitable if you charge a decent fee for your services and remain consistent with getting results for your students.
How much does it cost to start a tutoring business?
The costs of starting a tutoring business include marketing your services, creating materials, and registering your business.
The start-up costs for a tutoring business are low compared to other business models.
How do I find tutoring clients?
To find tutoring clients, network, reach out to schools, and market your services in your local community plus using social media.
Is tutoring a good side hustle?
Tutoring is a good side hustle because it can be done online or from home. The start-up costs are minimal and the earnings are good.
Final Thoughts On How to Start a Tutoring Business
Knowing how to start a tutoring business that will be successful isn’t a piece of cake, but it’s an attainable goal for those with the right mindset, determination, and planning.
Following the actionable steps within this article, you’ll know how to start a tutoring business strategically and reach your goals with less stress.