This guide will break down everything you need to know about how to start a tutoring business. From identifying your niche to setting up your finances, get your new tutoring business set up for success.

The benefits of starting a tutoring business

Tutoring can be a lucrative business with lots of opportunities and advantages. If you’re passionate about helping students reach their academic goals, consider starting your own tutoring business. Here are some of the benefits to keep in mind.

Opportunities to specialize

One of the biggest challenges for a new business owner is setting yourself apart from others in the market. There’s no shortage of tutoring companies out there, but choosing to specialize in underserved areas could help you stand out. Some ideas include:

  • By age group: Some tutors cater to grades K-12, others K-6, 6-8, or 9-12. Understand where your skills lie and where there’s a demand and hone in on your niche from there.
  • By subject: In addition to tutoring students within a specific age group, you can also focus on a specific subject matter. For example, if you were an English major, you may be well suited to tutor students in reading and writing.
  • College admissions tutoring: Alternatively, you can focus specifically on helping high school students with their college applications and admissions essays.

Constant stream of potential customers

Every year, a new cohort of students enter the school system. That means you’ll always have an incoming stream of customers who need your services.

Great potential for referrals

Parents trust other parents to recommend solutions for their kids’ challenges. If you help one student pass their test or get into their first choice of college, their parents could be your best salespeople.

Low startup costs

There’s no limit to where you can run a tutoring business. You can keep costs low by meeting your students at the library, in their home, at a coffee shop, and more! If having a brick-and-mortar location suits you, that’s always an option, too. You can also be the employee and avoid payroll costs or you can hire a few other tutors to lend a hand as the business grows.

  • Technology opens a wider marketplace: These days, a lot of tutoring is done completely online. This means you don’t necessarily have to serve kids only in your local area. They can be across the country or even across the globe.
  • Be a part of your community: If you do choose to stay local, you’ll have the opportunity to play a part in the lives of the kids in your area. As your business grows, you’ll develop great relationships with schools, teachers, and other local businesses.
  • Scalability: One of the great things about tutoring is that it’s possible to start very small. You can begin by taking on a handful of clients yourself to see if you like it. As you become more comfortable, you can invest more time and money to grow.

How much money can you make with a tutoring business?

Depending on the region you serve and the specialization you offer, tutors can charge anywhere from $15 to $80 per hour. That nets out to about $40–160,000 per year before expenses and taxes with eight hours of tutoring per day. You could charge more if you have a higher level of qualification and expertise.

One of the great things about starting a tutoring business is the potential for very low overhead. If you don’t have a retail location, your expenses would generally be limited to things like gas, mileage, and internet. If your business is online, you could cut those expenses down ever further!

The 6 steps to start a tutoring business

1. Assess the marketplace for tutoring services in your location.

Take the time to network with the local parent community. This may be especially easy if you are a school parent yourself. You can provide free seminars on study skills, curriculum changes and more. This can be a great way to meet parents and find out what their needs are.

See if your market supports tutoring. Some areas have parents that spend lavishly on tutoring and other enrichment. If it seems like this isn’t a priority in your area, you may want to look into starting an online-only business.

2. Figure out your niche: set yourself apart from the rest of the field.

Take your passion and use that as your guide to decide what your specific tutoring niche is. If you have the patience and personality to work with more active kindergarteners and first graders, this may be where you want to specialize. Perhaps your kids have just gone to college and you can relate more to teens. You might enjoy working with a higher level of difficulty that high school kids are working on.

Whatever you choose, make sure your personality and experience are a good fit with the student and parent population you’ll be working with. Parents often have a high level of expectation when it comes to tutoring, so you’ll want to put your best foot forward!

3. Set up your business location, or be fully remote.

Choosing to operate at a retail location can have its upsides. Escaping the distractions of home can be really helpful for some students and a brick-and-mortar location could lead to walk-in business, depending on your location. On the other hand, retail locations can be expensive, which will eat into your business’s profit.

4. Choose a business structure.

You’ll also need to choose a business structure to operate under. Many tutoring businesses are sole proprietorships, which is the simplest option. However, if you have a partner or employees, you may want to consider taking the LLC or S Corp route.

5. Choose your pricing

The price you choose to charge is one of the most important decisions you’ll make. Before settling on a number, consider the value you’ll offer your students and what the market can support, as well as any recurring costs or expenses.

6. Open a bank account

Opening a dedicated business bank account is an important step to starting your own tutoring business. North One is a great choice for tutors. Our products are geared towards today’s small business owner. We know you want low monthly fees, easy 24 hour a day access to all your financial information, and great tools to help you manage your money. We also can accept cash deposits, something not not every bank offers these days. It’s especially important for business owners who want to preserve cash as a payment option.

Once you have your bank account set up, it’s time to set a budget. This is a crucial step for getting started on the right foot. Follow our guide for some helpful tips on how to project costs and create your very first business budget.

7. Get customers

Now that your business is all set from a financial and legal standpoint, you’re ready to advertise. Consider the demand for your specific niche and make a plan that will attract the kind of students you can help. Whether you take out an ad in the local paper or offer free consultations, getting your name out there is the first step to closing your first sale.

Start a tutoring business today!

Tutoring students can be a really rewarding and lucrative business. If you love working with kids and helping them succeed in the classroom, consider starting your own tutoring business by following the simple tips we laid out for you here. Good luck!