How to start a tutoring business in 10 steps
If you love seeing others succeed and have a knack for teaching, there are plenty of opportunities to help students, from preschoolers to college students, excel in their education. Starting a tutoring business can be a great way to earn an income on your terms.
But before you begin, you need to hit the books. Did you know that 50% of small businesses fail in the first 5 years? Yikes. That’s why it’s important to have a plan. In this guide, you’ll learn how to start a tutoring business on the right foot.
1) Choose the type of tutoring services you’ll provide
First things first. Before you can create a business plan, you’ll need to think through the type of tutoring services you’ll provide. There are three main types to consider:
- In-home or in-person tutoring where tutors travel to clients
- Online tutoring via a virtual meeting platform
- Center-based tutoring where clients travel to you
Ultimately, you can offer your tutoring services through several methods, depending on your business model and how big you’d like to grow your tutoring business. But choosing the type of tutoring services you’ll provide is an important first step. This will help determine the type of transportation, equipment, and even business insurances you’ll need to succeed (more on that later).
|Type of Tutoring||What It Is||Pros||Cons|
|In-home or in-person tutoring||Tutoring students in your own home, meeting them at theirs, or meeting in a public place such as a library||Saves time for clients; You may be able to charge more per hour; No office rental expenses; You may be able to write off your travel expenses at tax time||Increased travel time and wear and tear on your vehicle; Not everyone is comfortable meeting in someone else’s home|
|Online tutoring business or virtual tutoring||Tutoring students virtually from an online meeting platform (such as Zoom) from your own workspace||No additional travel time; Greater flexibility to take on more clients; Bigger market due to no required travel; Convenient, no matter your location; No office rental expenses||Increased technology-related expenses; Some students don’t feel comfortable learning via video conferencing; You may not be able to charge premium rates; Greater market saturation|
|Center-based tutoring||Tutoring students in-person from a learning center space that you rent or own, usually offering multiple tutors to choose from||A professional environment that fosters learning; You’ll have a central place your clients can meet you, reducing your travel time; Centers could allow for faster growth, as you have multiple tutors you’re supervising; Some clients may feel more comfortable meeting in an office instead of a home||The most recognizable tutoring centers are franchises, which can have high franchise fees and limited flexibility; Added costs of renting a space for your business|
Online Tutor vs. Traditional Tutor: What’s Best for Your Tutoring Business?
Some students prefer to learn in person, while others find online tutoring helps them focus. Whether or not you choose to offer online or in-person tutoring depends on your ideal clients.
If you’re still deciding whether or not to offer online vs. traditional tutoring, start small. If you don’t have a lot of tutoring or teaching experience, begin tutoring in person to get a feel for how to translate your tutoring style online.
However, if you’re limited by your transportation or travel time, don’t let that stop you. You can still get started by offering online tutoring through a trusted digital platform that caters to your ideal clients.
Once you’ve decided the type of tutoring services you’ll offer, the next step is to make a business plan.
2) Create a tutoring business plan
“It takes as much energy to wish as it does to plan.”
Eleanor Roosevelt’s famous quote on planning is inspiring, but it’s also just plain true.
You’d want your students to do their homework, so you should, too. Here are key sections to tackle when formulating a business plan for your tutoring business:
- Executive Summary: How would you describe your business? And how will you measure its success?
- Overview: What's the legal structure and background of your tutoring business? What are the key things others should know?
- Industry Analysis: What does your research reveal about the tutoring industry or educational services in your area?
- Competitive Analysis: Who are you competing with for tutoring clients? What are their strengths and weaknesses?
- Marketing: How do you plan to reach potential clients? What is your marketing strategy?
- Management: What unique skills, experiences, or certifications do you bring to the business?
- Operations Plan: How will you manage the day-to-day tasks of your tutoring business?
- Financials: What do you expect to earn in revenue? What will your expenses be?
3) Find your tutoring business niche
Think back to a favorite teacher you’ve had. They probably had found their niche—which is why they were so good at their job.
To set your business apart from your competition, you need to find your niche. Essentially, your niche is made up of the areas you will specialize in—the grade levels or ages you tutor, what subject areas you cover, if you provide part-time or full-time services, and more.
Brainstorm your own subject areas of interest, the ones you excel in, and decide what tutoring services you’d like to offer. Common tutoring business niches could include any of the following:
- Grade levels: What age groups or grade levels will you be tutoring? Will you tutor those who are in college-level courses?
- English as a second language (ESL) or foreign languages: Are you bilingual, do you have a knack for studying languages, or do you have an ESL certification?
- Standardized testing: Do you offer standardized test prep for the SAT, ACT, LSAT, or GRE?
- Unique learning needs: Are you proficient in sign language? Do you have experience working with students who are differently-abled or have special needs?
- Full-time or part-time tutoring: Are you a full-time tutoring business, or is this your side-gig? Do you offer extensive homeschooling help or stick to short weekly sessions?
4) Uncover the unique selling proposition (USP) for your tutoring business
Your unique selling proposition (USP) is what makes your tutoring business different from others in your market. It’s the thing that sets your business apart.
Your ideal clients have plenty of choices, and your new business should have a sharp focus to compete. For example, instead of offering general tutoring services for high school students, your business might have the USP of “in-home tutoring services with a certified tutor for high school juniors preparing for college exams.”
This immediately separates your tutoring business from others out there, and it speaks to your target clients.
But what if you don’t have enough clients at first? You could offer another specialty or tutor a broader age group. Widen or sharpen your USP—while keeping your niche in mind—to balance the needs of your market.
5) Picking your tutoring business name
Here’s the fun part: Next, you’ll need to select a name for your tutoring business. This is the perfect moment to bring in family and friends for input.
Make sure to choose something that not only represents your USP or tutoring specialty but also makes your clients feel special—and smart.
For the USP mentioned above, a name like “Einstein's SAT Prep” or “Travel-2-U College Test Tutoring” clarifies to clients what services you offer. Get out a notebook and a pen, do some word associations, and see what you can come up with!
Make sure to research to see what names are already taken in your area, including a quick check with the Secretary of State to ensure your chosen business name isn’t already in use.
Ultimately, you need to pick a name that reflects your business and is something that you love. It’s what you’ll build your brand on!
6) Choose your tutoring location and what supplies you’ll need
If you plan to provide in-home or online tutoring services, you won’t need to give too much extra thought to this step. Make sure you have a clutter-free, quiet place that helps both you and your clients concentrate. This can be as simple as a tidy kitchen table.
Not planning to meet at your client’s home? You’ll need to come up with a routine plan. Most public libraries have quiet meeting rooms that you can reserve, and sometimes a coffee shop can work in a pinch.
However, if your tutoring business is growing quickly (good for you!) or if you plan to run a center-based program, you may want to rent a place that’s convenient for your target clients. Consider a location close to nearby schools. Before you sign a lease, research competitors in your area—you don’t want to discover later the competing tutoring center is in the same strip mall.
Once you’ve decided on how and where you’ll offer your services, make sure you have the right supplies—things like:
- Vehicle for travel
- Online video meeting applications (those designed for virtual learning are preferred!)
- Quality webcam
- Scheduling app or calendar
- Digital payment system
- Subject-related tutoring materials and/or textbooks
- Rewards (stickers or small toys used when working with younger students)
7) Figure out your financial plan
While your tutoring business may have low start-up costs, don’t skip the step of making a financial plan—even if math isn’t your favorite subject.
a) What does it cost to start a tutoring business?
Think through all the initial and recurring expenses you might have—not only the cost of supplies you might need. Depending on the type of services you offer, your costs may include:
- Wear and tear on your car
- Office space
- Initial licensing and certification fees
- Self-employment taxes
- Additional professional training
- Marketing costs for a website or online ads
- Business insurance
(Yes—all small businesses need small business insurance, even your tutoring business! More on that below.)
But don’t get overwhelmed. There are some simple ways to finance initial start-up expenses:
- Crowdfund for help from your community
- Use some of your personal savings to get started
- Ask friends or family to help by investing in initial costs
- Use personal or business credit to get startup supplies
- Get a personal or business loan
b) What should you charge for your tutoring services?
What you charge your clients will need to cover your initial and recurring costs and make a profit, which means you’ll need to do some more math to know what exactly you should be charging (either as an hourly rate or per-tutoring session).
Make sure to research what others are charging in your market for their tutoring services, and figure out pricing based on the following:
- Your market research (what competitors are charging, average household income in your area, and more)
- Your experience level, special certifications, and niche
- What it costs to operate your business
c) How should your tutoring business be structured?
Think through how you’d like your tutoring business to be structured for legal and tax purposes.
As you’re getting started, you can start tutoring as a sole proprietorship or a partnership, meaning working for yourself as a tutor or with a partner splitting the earnings with no other employees.
However, to protect your assets, you might consider operating your business under a limited liability company (LLC)—especially if you choose to hire employees or manage freelance tutors in the future.
d) What insurance does a tutoring business need?
Accidents can happen, which is why it’s important to have the right business insurance coverage in place.
The type of insurance coverage you’ll need depends on the type of services you offer, where you do your work, if you have employees, and more.
Below are important coverages to consider for your tutoring business:
- Workers’ compensation: This coverage protects your employees if they are injured or get sick while working for you. Every state in the U.S. requires workers’ comp, and there are serious consequences (including having to close your business) if you don’t have it. Get a quick estimate with our 60-second workers’ compensation calculator to see what you’d pay.
- Business Owner’s Policy (BOP): A BOP is a packaged policy that can protect your tutoring business from multiple kinds of liability or damages. It’s a bundle of insurance coverages and can include general liability insurance and property insurance coverage (mentioned below).
- General liability insurance: This can protect your tutoring business if you’re sued for an injury or property damage claim. Don’t let your tutoring service go out of business by not having this in place!
- Property insurance: This policy protects all equipment needed for your tutoring business, including any computers, webcams, and more, if you provide online tutoring, and this coverage could potentially be included as part of a BOP.
8) Get your paperwork in order
For your students, practice makes perfect, and it’s the same for you as you move through the order of operations for starting a tutoring business.
Once you’ve got the concepts down and understand how you’d like to set up your tutoring services, it’s time to put your business to paper.
a) Register your tutoring business name with your state
Protect all that hard work you put into finding the perfect name. Register your business with your state and pick your business structure (whether that’s a sole proprietorship, partnership, or LLC).
b) Apply for your EIN
This step is simpler than you think. Getting your employer identification number (EIN) identifies your business for tax purposes, and it’s quick and easy. (Really!) You can do so here.
c) Obtain any permits or licenses required
In most cases, tutors don’t need teaching licenses. However, this might allow you to charge more for your services. In addition, research to determine what permits or licenses, if any, are required to operate a tutoring business in your area. This is especially important if you’re running a center-based tutoring program that is franchised or if you plan to scale quickly.
9) Hire your first employees (if you need them!)
Class is about to be in session, and you might need an extra pair of hands.
If you plan on hiring help, once you’re filed all the required paperwork and have all the proper insurance coverages in place (including required workers’ comp coverage), you’re ready to post your job.
Here are some key positions that will help you run your tutoring business smoothly as your business grows:
- Administrative assistant. Someone to help you schedule, confirm appointments, manage paperwork, answer emails and calls, and more.
- Tutors. You can’t be in two places at once. As you grow your client base, you’ll need more tutoring help.
- Teachers/Instructors. As your business grows, you might discover a need for certified, licensed educators, especially if you provide homeschooling services.
- General manager. If you’d like help with managing employees, their benefits, and their schedules, hiring a GM for your business can help you focus on business growth.
10) Spread the word about your tutoring business with a marketing plan
Now it’s time to spread the word about your tutoring business. Don’t be shy about your academic success—this is the place to shout about your strengths from the rooftops.
- Build your website. Purchase the URL for your business name, even if you’re not quite ready to build a website yet. Use user-friendly website services like Weebly or Squarespace to create your own.
- Create your social media profiles. You’ll need a business social account on the platforms where your target clients are (but remember, your target client might be your students’ parents, as they’re footing the bill). Don’t forget to update your LinkedIn profile, too.
- Create a business listing on Google and Yelp. Build out your Yelp and Google My Business profiles to make sure local people can find you when searching online.
- Place brochures, flyers, and business cards at key locations. Not only should you provide these to schools in your area, but if many of your potential students also take swim lessons, you should market there, too.
- Build word-of-mouth buzz. Start telling friends, family, and local parent Facebook groups about your tutoring business. Ask happy clients to provide reviews and testimonials that you can use in your marketing.
- Offer discounts. If you’re looking to grow your client base and you already have satisfied clients, provide them loyalty or referral discounts to thank them for spreading the word.
Start your tutoring business with the right support
That was a lot of information, but ultimately, studying, planning, and preparing is key to making sure your students (and your business) don’t fail. Your business can get to the head of the class with a solid business plan and the right business insurance in place. (With Huckleberry, it takes less than 5 minutes to get the business insurance coverage you need.)
Overall, a tutoring business is a venture you can grow to the size you’re comfortable with. You can keep it as your side-hustle or scale it into a full-fledged tutoring company with multiple employees and locations. That’s one of the key benefits to starting your own small business, and at Huckleberry, we’re rooting for you! Get a quote for the business insurance you need today—it’s fast, easy, and free.