How to Start a Tutoring Business

Written by Dave Lavinsky

How to Start a Tutoring Business


How to Start a Tutoring Business

If you’re looking to start a Tutoring Business, you’ve come to the right place. Since we’re going to show you exactly how to do it.

We’ll start with key tutoring industry fundamentals like how big the market is, what the key segments are, and how revenues and profits are generated.

Then we’ll discuss keys to not only starting a Tutoring Business, but succeeding in it!

How Big is the Tutoring Industry?

According to IbisWorld, there are 155,758 tutoring businesses in the U.S.that generated $9.6 billion in revenue last year. This represents an annual growth rate of 1.9% over the past 5 years.

What are the Key Segments of the Tutoring Industry?

The Tutoring industry provides a wide variety of educational instruction. In addition to exam preparation, tutoring and driving schools, other classes, such as yoga and self-defense, are also included in this industry.

The key segments of the industry are as follows Test preparation and Tutoring

What External Factors Affect the Tutoring Industry?

A number of factors affect the performance of the tutoring industry. These drivers include:

Per capita disposable income: Most of the training provided by this industry can be classified as a discretionary purchase, which is highly influenced by household income.

Government funding for primary and secondary education: The federal government’s No Child Left Behind (NCLB) program provides funding for after-school tutoring services that this industry provides. While overall government funding for primary and secondary education is expected to increase in the recent years.

Number of college students: Growth in the number of college students also results in stronger demand for tutoring in other college fields and licensing examinations.

Number of K-12 students: An increase in the number of K-12 students will consequently boost competition for college admission, a growing trend in the past five years.

This movement stimulates demand for exam preparation and tutoring services, as students try to gain an edge on the competition.

Number of employees: An increase in workforce participation in the United States has caused families to increasingly seek out tutors and other supplementary education providers for homework supervision and other educational activities.

Therefore, an increase in the number of individuals participating in the workforce will lead to greater demand for these services.

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What are the Key Customer Segments in the Tutoring Industry?

The key customer segment for the tutoring industry are those under the age of 21.

What are the Key Costs in the Tutoring Industry?

Wages: Labor costs for this industry are high. As most training in this industry is done on a face-to-face basis.

Purchases: Purchases include the cost of teaching materials and associated equipment (e.g. software and supplies).

Rent and utilities: The cost of utilities has risen over the past five years. The price of electricity has increased steadily, growing at an annualized 1.8% over the past six years.

Marketing: IBISWorld estimates that advertising, marketing and franchise costs represent a modest 2.8% of industry revenue.

Other: Industry operators incur a variety of other costs. These include administrative expenses, licensing fees, insurance, maintenance and other costs associated with running an office on a daily basis.

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What are the Keys to Launching a New Tutoring Business?

1. Decide on a location – Though you won’t necessarily need an office, you will need to decide what your catchment area will be. How far would you be willing to drive to tutor a student? Will you go to students’ homes? The school? The library? Or do you want to offer your services online?

2. Decide on your subject matter – Consider which subjects you are qualified to tutor and the age groups of your desired students, and find out if there is demand for tutoring in your niche.

3. Decide how much to charge – this can be tricky, since pricing can vary widely based on your location, and the subject(s) you’re teaching. It’s important to do your research on what the market will bear.

4. Financial and legal considerations – find out the requirements and regulations for tutors in your area. If you plan to tutor in schools, there are typically more requirements for this market. Then decide what kind of business structure is best for your business, and register with the appropriate government offices.

5. Advertise – Once you have all these things in order, you will need to get the word out. Be sure to advertise where parents can see it – schools, libraries, social media, and the like are great places to start.

Helpful Videos

Advertising Strategies for Your Tutoring Business


Additional resources in the tutoring industry

For additional information on the tutoring industry, consider these industry resources:


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