How to Start a Tutoring Business from Scratch

Tutoring can be a great way to expand your teaching expertise while also making more profit and having a positive impact on the community.

Tutoring is experiencing a boom, and it’s projected to grow by $8.37 billion from 2021-2025, with a CAGR of approximately 8%. 

You have finally made up your mind to start your own tutoring business! However…

• What is the process of starting a tutoring business?
• Which things are you going to do to attract students to your new venture?
• What makes you different from your competitors?

We have the answers to all your burning questions!

Optional business models for tutoring

1. Consider buying a tutoring franchise. It involves a high initial investment. As a franchisee, you must adhere to certain aspects of the business. The tutoring rates may not be set by you.
2. Work for other tutoring businesses as a contractor or employee. Both employee and contractor tutors have advantages and disadvantages in tutoring businesses. It is unlikely that you will have your own business if you’re a tutor for the company.
3. Own a tutoring business. The business is totally under your control, and you can charge any rate you want.
4. Become a tutor for a reputable and established company. Buying a franchise costs money, whereas starting a business does not.

You must choose what is right for your business based on its uniqueness. Despite the overwhelming look of this list, some of these decisions are actually quite simple. It is important to seek support from an industry body or professional if you are unable to make any of these decisions.

1. Check for trade restraints

When you set up a tutoring business, make sure you do not violate a restraint of trade or non-compete clause if you are a teacher or a tutor at an agency. A tutoring business that competes with your employer may be prohibited by your employment contract. Additionally, some restraint of trade clauses specify a geographic or time limit (e.g. 50 kilometers from a certain location).

It may be stipulated by a restraint of trade clause that your business must be at least 50km away from the school or tutoring agency. Furthermore, your tutoring business might be up and running within three months after you leave your former position.

2. Decide on the business structure of your tutoring business

It is critical to understand what type of business structure you need to establish before you start a tutoring business. Most tutoring businesses begin as small operators (hiring a few tutors) or as independent sole proprietorships. An individual tutoring business should be set up as a sole trader. Business decisions and assets are controlled fully in a sole trader organization. Establishment is also relatively simple. A separate business bank account not required if you use your individual tax file number (TFN) to submit tax returns.

3. Create tutoring contracts

A few large tutoring companies operate, but most tutoring businesses are small and offer one-on-one tutoring. Thus, private tutoring contracts are rare. It is advisable to have a written tutoring agreement where a tutor delivers services to a student. The agreement will clearly outline the relationship between the two parties. All associated fees and services should be disclosed in contracts for tutoring businesses.

Making the right decision for yourself:

• Become familiar with your tutoring skills and the subjects and years you can tutor. It doesn’t mean you’ll get more students if you teach more subjects, so stay with what you know.
• Identify your students. How old are your students? How old are your students? What is their academic background? Is there a learning disability?
• Get to know your students’ addresses. Where do they live and how far do they have to travel? Where will they be tutored?
• Your tutoring options will expand with online tutoring, but what platform will you use, and do you have the right equipment?
• Pricing is the first step. Where do you set your price range? Are there tutors who have the same level of experience as you?
• Terms and conditions of contracts. Should you have Terms and Conditions for clients to sign, or do they need to sign a contract with you? What are the best ways to write contracts and terms? Are you considering public liability insurance?
• Establish your business structure. Within Australia, you have many options, but it is more likely that you will start out as a sole trader.
• Your business structure may have tax implications. Do you have an accountant to advise you? What is the process for charging GST?
• Register your business and give it a name. Register your URL at the same time. Should it be a .com or .com.au?
• Describe all aspects of what you plan to do and how you intend to grow it in a business plan.
• Plan your marketing strategy. Marketing your tutoring services should include a website and social media platforms, a networking strategy, and referrals.

Takeaways

Parents are increasingly seeking to provide their children with a competitive advantage at school by providing tutoring services. Comparatively to traditional face-to-face tutoring, online tutoring business models have become more accessible in the past five years. Whenever you decide to set up a tutoring business, make sure you understand the business structures available to you, and whether you are violating any potential trade restrictions. To protect you and your employees, you should also draft the right legal contracts.

Also Read: A step by step guide to open a school in India