This post details how to start a tutoring business.
If you’re looking to launch a profitable side hustle, starting a tutoring business is an option to consider.
Not only are parents looking for qualified individuals to support their kids in improving academic weaknesses, a significant segment of parents seek private tutors for various other services such as homework help, college entrance exam preparation, and second language development, just to name a few.
And tutoring school-aged children isn’t the only option.
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 article shows you step-by-step how to start a potentially lucrative tutoring business, from tutoring elementary students all the way up to adults.
With a solid foundation, plan, and strategy (along with consistency), you’ll be all set to launch a tutoring business of which to be proud.
I’ve tutored on the side over the years but never full-time.
That’s why for this post, I collaborated with some former colleagues who turned their tutoring gigs into full-time businesses!
They shared with me tips and strategies that they have used to successfully grow and sustain their tutoring business.
By following this tried-and true advice, hopefully you’ll eventually be in a position to turn clients away.
In a nutshell, here are the steps for how to start a tutoring business…
- Set Your Income Target.
- Estimate Potential Expenses.
- Research a Suitable Niche.
- Reflect On Your Talents and Strengths.
- Price Your Services.
- Draft a Tutoring Policy Contract.
- Build Your Tutoring Framework.
- Market Your Tutoring Business.
- Invest in Your Business.
Ok. Let’s get into it!
1. Set Your Income Target.
First things first…
Before you start your tutoring business (or any business for that matter), begin with the end in mind.
Think about your desired income target.
How much money do you want to make 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.
Let’s take a look at an example.
If your desired income goal your first year of starting your tutoring business 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 amount $25,000 divided into 12 months equals approximately $2,083 per month.
Now let’s take that amount, $2,083, and divide it by the number of weeks in a month.
We get approximately $521 per week.
Let’s assume I’m charging $50 an hour for my tutoring services.
The amount $521 divided by $50/hour gives me about 10.4 hours.
So basically, I need to work about 10 and a half hours per week to meet my yearly income target.
When broken down like this, the workload seems very reasonable.
Want to make about $4,000 a month?
Then just double your working hours weekly in order to still reach your desired yearly income goal.
The more revenue you plan to make per month, the more aggressive you’re going to need to be with your marketing tactics (I cover marketing strategies more in-depth further on in this post).
Keep in mind that those 10 hours of tutoring don’t necessarily mean that you need 10 clients.
I’m sure you’ll have clients that you see more than once a week.
Tutoring Discounts for Bulk Bookings
When thinking about your long-term income goals, also take into consideration package discounts if you plan to offer a reduction in hourly rates for bulk booking.
For example, suppose you charge $50 an hour for tutoring someone that you see twice a week.
That comes to $400 a month.
However, if the client pays for the entire month in full and in advance, you could offer the entire month of tutoring for $350 (or whatever discount you’re comfortable with).
Package pricing works very well, especially if you have a firm and clear cancellation policy in place.
It’s mutually beneficial to both client and tutor.
You get your money up front, a consistent schedule for the month, and your client receives a decent discount.
Plus, your tutoring client is less likely to cancel when all payments have been paid upfront.
You really want your customers to attend sessions regularly. That’s a key strategy for generating positive results and progress for your customers.
When it comes to marketing your services, package pricing draws special attention due to its value and affordable pricing.
So highlight tutoring packages when advertising the services you offer.
It’s also important to note…
Charging higher hourly rates means you can reach your income goals with fewer clients.
Charging less may get you more leads, but you’ll have to take on a lot more hours to meet the same income goals.
Less is absolutely more in this case.
In the example above, if you charged $20 per hour instead of the $50, you would need to tutor 26 hours per week to make the same amount of money!
That’s more than twice as many hours!
So again, pricing your services at a higher price point allows you to work fewer hours.
And it’s worth noting that people’s perceived value of your worth as a tutor correlates to how much you charge.
This is how to start a tutoring business off on the right foot!
2. Estimate Potential Expenses.
A huge positive to starting a tutoring business 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.
This means no monthly office rent!
If you plan to go to the client’s home or school, do account for gas expenses.
A positive to going to clients’ residence is that you’re able to charge more per hour for your tutoring services.
Hey, convenience costs!
The other main expenses you’ll have when starting your tutoring business include study resources and promotional materials for marketing purposes.
When you’re ready to scale your business in year two or three, a professional website and higher-quality advertising material may dig a bit more into your pockets.
The way to handle this smoothly is to set aside some of your tutoring profits each month into a “reinvesting in my business” fund.
That way, when it’s time to purchase a few upgrades, you’ll already have some money designated for that purpose.
3. Research a Suitable Niche.
This is such an important step in how to start a tutoring business.
Choosing your niche.
Finding a suitable niche means knowing your market.
If you want to be able to scale your tutoring business (code: potential to earn greater profits), you’ve got to identify market niches where demand exceeds supply and/or where the demand is willing to pay.
Here are some suggestions:
- Look up tutoring businesses in your area. See for which subjects they offer services and at what price points. You can do most of this online. If a company or individual (focus more on those businesses that are similar to what you envision for yourself) charges a certain amount, you know that you too can charge comparable rates, all other things being equal. You want to target those areas in which businesses are charging prices that you seek to charge.
- Niche down. If your target audience is elementary-aged students and businesses in your area charge considerably less for tutoring that age group compared to high schoolers, niche down. By this I mean, make yourself more marketable by specializing. For example, you could market yourself as a specialist in math intervention or reading intervention. Or bilingual education, special ed., etc.
With clients of elementary-aged kids, set yourself apart by marketing yourself as a specialist in a certain area, preferably an area that parents seek the most help.
- Research businesses in higher-income areas. You’ll ideally want to focus on this customer segment since they’re more likely to pay your higher fees.
- In those higher-income areas, note what special programs the elementary schools offer. Are there magnet schools with a specialized program such as STEM, gifted and talented, etc? This information is essential to know because it provides you with potential target niches to consider.
- For those wanting to tutor high school or college students, you have a greater advantage. Because the perception is that high school and college subjects are harder to master, parents generally spend more money on those services, without much hesitation. The niches for targeting high-school and college students are many, but higher level math, science, and college/graduate school entrance exam prep are the clear winners.
4. Reflect On Your Talents and Strengths.
Want to know how to start a tutoring business the wrong way?!
By picking a niche that you’re completely not feeling nor have the desire to master.
Though starting a tutoring business doesn’t require you to have 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 all of its content?
Will you confidently be able to teach those skills and strategies?
If you’re targeting elementary-aged kids, you may feel okay with the content, but are you comfortable working with this age group?
Just know that besides the content, different ages bring about different realities.
Know thyself, and be honest about your preferences.
Tutoring in a niche such as GRE prep may yield higher payouts, but graduate candidates are very serious about their studies and will most likely expect top-notch service for what they’re paying you.
Are you up for the challenge?
Just something to think about.
5. Price Your Services.
What you charge for your tutoring services depends on so many factors: location, demand, experience, reputation, niche, and the list could go on.
Assuming you’ve done your market/niche research and know what comparable businesses charge for your niche, here’s my take on pricing….
Charge your worth!
It may take some time to get there, but start relatively high as many people correlate quality with price point.
NOTE: Here’s a tutoring pricing guide to help you in deciding what to charge for tutoring elementary students.
Differentiate yourself with the value you provide – what are you doing differently?
Sometimes the biggest difference is in the relationships you form and cultivate with your clients.
Additionally, you can charge more for tutoring during “off” times such as weekends, holidays, etc..
And remember, package-pricing (when clients pay for weeks at a time) is a better value overall for you and the client.
6. Draft a Tutoring Policy Contract.
This is the part about starting a tutoring business that I like least – the rules and stuff.
Drafting a tutoring policy is a very necessary part of starting your business because well…people are human and may not always act in your best interest.
A tutoring policy contract creates boundaries and outlines some professional ethics.
It’s presented and agreed to by the client before any services takes 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.
Here are some 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
- Emergency absences
- Preparedness of student
- Cancellation procedures
- Communication channels
I cannot stress enough the importance of having a tutoring policy contract.
It will save you money, time, headache, disputes, and miscommunication.
7. Build Your Tutoring Framework.
Because you have a targeted niche, think about the materials you might use to tutor clients.
It’s best to use similar materials with all learners to keep things streamlined and consistent.
Of course, you can modify things here and there, but a comprehensive study guide is a practical idea.
It’s like having your own branded tutoring materials customized to your targeted niche.
I understand that this isn’t always so simple, especially for those tutoring elementary-aged students.
With elementary students, you want to choose materials that are standards-based (according to the school’s curriculum), and highly student-centered.
If you’re in a position to do so and it makes sense for your niche, invest the time to create a study guide to use with tutoring clients.
This prevents you from jumping from resource to resource, and the best part is that it will be customized to your specialization area.
Go the Extra Mile
When building your tutoring business, if you’re targeting elementary-aged kids, go the extra mile and schedule meetings maybe once a quarter or semester with the child’s teacher.
Parents love to see the tutor and teacher working together for the benefit of the child.
This simple act adds more value to your tutoring services and serves to justify even further your pricing.
Additionally, add another level of professional touch by making sure you’re sharing with clients their progress.
A simple spreadsheet or organized notebook with anecdotal notes that highlights progress over a specific period of time is yet another way to show your value and how seriously you take your business.
Do what you can (within reason of course!) to level up on the competition.
I’m sure every tutoring business in your area can offer the same services, so what value can you provide that the other businesses aren’t willing to do?
And don’t think this has to be in the form of providing more services.
Standing apart from the competition could be as simple as responding to email inquiries within a reasonable time frame (say 24 hours), offering healthy solutions for disgruntled clients, or sending a birthday/greeting card on special days.
The opportunities are plentiful to make your business stand out – in a positive way!
If you want to know how to start a tutoring business that stands apart from the rest, now you know what steps to take.
It’s the little details that sometimes make the biggest difference.
8. Market Your Tutoring Business.
After you’ve chosen a suitable niche and taken care of all the “behind-the-scenes” stuff noted above, it’s time to get the word out about your tutoring business!
Strategic marketing is arguably the most important step of growing a tutoring business.
Let’s take it step-by-step…
- The easiest way to begin marketing is by word-of-mouth and leveraging your existing network. If you don’t know many people yet, be patient. Word-of-mouth takes time, but the effects snowball eventually.
- Make connections with local schools, relevant organizations, and libraries in your targeted areas. Local libraries usually have free community bulletins to which you can post. You can also display business cards and brochures in coffee shops, grocery stores, and community centers. Think about where your ideal customers hang out, and advertise in those places.
- If you really want to take things up a notch, host free workshops at schools and libraries. Parents and other potential clientele will see you in action, and that does wonders for cultivating the “Know, Like, and Trust” factor that is at the core of marketing. Free workshops are the perfect stage to showcase your expertise in your targeted niche!
- If you’re already part of a teaching staff, wonderful! You’re surrounded by potential clients. Other educators will hopefully serve as your allies as they will be some of your biggest referrers. Take advantage!
- A more time-consuming method is direct mail campaigns. Find neighborhoods in your targeted area with a good number of schools and universities, and mail advertising brochures to those residents. This method requires time and a bit of money, but it gets your name out there. Rate of return depends largely on how well you craft your promotional copy.
Consider Online Marketing!
- If in the future you decide to scale your tutoring business to a full-time enterprise, consider online marketing. It’s powerful and a great way to grow a client base organically, if done properly. It takes a bit of work to set up, but the results do pay off. The simplest way to begin with online marketing is through social media: LinkedIn, YouTube, and Facebook. Provide value to your potential audience via these mediums. Because these platforms are very visual, the more content you post, the more views and potential leads you’ll gain.
- Make sure your target niche is obvious in your social media posts and videos. Do this by ALWAYS keeping the client’s problem in mind. What problem are you really trying to solve? If a parent of a 5th grader wants his son’s math grades to improve, that’s the obvious reason he seeks tutoring. But what is the transformative/deeper outcome that solution will bring? That’s what you want to focus on within your messaging.
- In reference to the previous bulletin, draft a mission message to use in your advertising. Using the example above, it could go something like this… I help upper elementary students confidentially and strategically approach math concepts so that they are thoroughly prepared for the complexity of middle school math.
- And about having a website… If you create a professional website properly, you’ve got yourself a marketing machine that will work for you 24/7. The details of SEO and content marketing are too in-depth to cover here, but a simple website is a great place to showcase your credentials, happy client testimonials, a little more about yourself, your mission, etc. You should also consider writing blog posts to add more value to your targeted niche.
Consistently publishing content of value to your targeted audience positions you as an expert in the specialty for which you’re targeting clients.
It takes time to rank in Google, but within months, your presence will garner some organic leads.
9. Invest in Your Business and Yourself.
Okay, so you’ve got your tutoring business off the ground, and you’re seeing some traction.
What’s the next step?
Well, if you’re in it for the long-run, consider the following options:
- Formalize your business with an LLC or other business entity appropriate for your business situation. Talk to your tax professional to see what option is the best fit for your business model.
- Open a business bank account. When you begin to make some moolah, separating your personal and business accounts is not only a good idea, but it’s actually required by the IRS if your business qualifies as a separate legal entity. Again, speak with your tax or accounting professional about this.
- Have a system for handling your tutoring business transactions. Quicken is a popular choice, but there are several accounting options on the market. Wave Accounting is a decent option, and it’s free for a basic account. You may want to test it out. You can always upgrade to a more robust accounting software as your business grows.
- Congregate with like-minded individuals. Join Facebook groups, local business groups…whatever you need to do in order to connect with others trying to build a small business. Not only do you learn new strategies and marketing techniques, you network with others in your community. This is a fabulous way to grow your tutoring business over time while at the same time supporting other business owners.
Wrapping Up: 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 strategic plan.
Follow these actionable steps, and you’ll be on your way to growing a profitable tutoring business.
Wishing you all the best in your business ventures!