10 Decisions You Should Make Before You Create Your Own Tutoring Business

Should you start an LLC right now?

If you’re hoping to earn extra income on the side, whether to supplement your existing salary or to completely replace your full-time earnings, creating a tutoring business may be appealing.

On the surface, it seems incredibly easy to start!

You make a flyer.

Post it.

Voila!

If you build it, they will come.

If you’re thinking of turning your part-time passion project into a full-fledged entrepreneurial endeavor, make these 10 decisions first.

ONE: Will you require prospective students to attend an introductory consultation before any sessions start?

Will it be free, and what will you go over?  

As uncomfortable as it may be, you need to decide whether you’ll take on anyone who wants to work with you, or whether you’ll screen prospective students based on your pre-determined criteria.

Which students will most benefit from your skill-set and current level of expertise?

If you encounter a family with unrealistic expectations, will you still take them on as students?

Or will you let them know, upfront, that it won’t be a good fit?

I’ve tutored off-and-on, on a part-time basis for almost 20 years.

I’ve worked mostly for schools, small companies, friends and family, and Wyzant, but very rarely have I sought out students completely on my own.

When I’ve worked for companies, I haven’t always been able to meet the families first.

Learn their goals, expectations, and prior experiences. Develop common ground and build rapport. 

Over the course of your tutoring relationship, there may be plenty of time to earn trust. But sometimes, and I can only say this BECAUSE it’s been 20 years, every student isn’t meant to be YOURS.

There may be a skill-set mismatch. There may be too much family pressure. There may be a particular learning disability, for which you have no best practices.

Whatever the case may be, an introductory consultation can at least set the tempo for a long-lasting union.

You can learn each other’s communication styles, fears, and discuss rules and expectations.

A friend (and professional tutor) recommended creating a contract with terms of agreement.

During the initial consultation you should do the following:

  1. Review the contract with both the parent and students.
  2. Discuss the payment schedule, along with the tutoring location and times.
  3. Talk about the cancellation policy and your process for late payments, cancelled sessions, or make-up sessions. If you require notice—such as a 24 hr. cancellation policy—let them know upfront.
  4. Discuss rules and expectations for behavior.
  5. If you’ll offer small group classes in addition to individual sessions, determine the family’s preference. Some parents only want one-on-one support.
  6. Discuss your grading policy, your policy on assessments, how you’ll maintain regular communication with the parent, and whether or not you’ll communicate with the child’s teacher.
  7. Discuss curriculum. Show it to the family and let them review it.
  8. Decide whether you’ll also give an assessment as part of the initial screening process. (If so, what test will you use?)

TWO: What Will You Teach & When Will You Teach It?

I know what you’re thinking. I can see it on your face.

“Why would I start a tutoring company without knowing what I’m going to teach and when I’ll teach it? That’s absolutely ridiculous.”

Hear me out.

If your students and—by extension—their families enjoy you, they’ll want to use you for everything.

Why wouldn’t they? You’ve built up a track record for success.

You’re comfortable, knowledgeable, engaging, consistent, and effective. They trust you.

You’re exactly what they wanted—and didn’t find—in their previous tutoring search.

For the first time since pre-K their son LOVES school! He’s excited about it. He can’t stop talking about it. He’s more confident, more engaged, and—his grades have even improved!

He may even have a shot at those AP classes! He may actually go to COLLEGE!

Hallelu-yer!

There’s only one problem. Your specialty is Language Arts. But can you teach Chemistry too? He’s struggling in Calculus too. Can you teach that? Oh, and he’s failing art history too. Can you teach that? Oh, and….

Decide what you will teach before you start.

The same holds true of schedules.

Families are busy and their scheduling needs may change. If you’re tutoring in the evenings after your full-time job, can you always be on time?

Will your full-time load ever get in the way?

On a similar vein, you should also identify your niche.

Are you especially skilled at Test Prep? ACT or SAT? GRE, GMAT, or LSAT?

IELTS or TOEFL?

GED?

Decide what you’ll teach and when you will teach it.

THREE: How will you accept payment and when is it due?

There are so many options for small business owners, but make sure you research to find limitations and discover all associated fees.

Will you use Paypal, Square, Stripe, or Dwolla? Do you recommend Paystand, Take-A-Payment, Merchant Website, or Flint? Have you tried Intuit Quickbook Payments, PaySimple, or Braintree? Google Wallet’s popularity is increasing now too. What will you use?

If you choose not to create an LLC, will payments go directly to you?

FOUR: What is your cancellation policy, and what’s your policy for tardies and absences?

And speaking of cancelled sessions, how many is too many? When, if ever, will you choose to let a student or class go?

FIVE: Where will you tutor? 

When you’re first starting out, it may be more feasible not to rent a space, room, or office. You want to limit your start up fees, and there’s obviously plenty of places to work out of. Right?

Tutoring in your home might be the most convenient option for you, but are there legal implications? What are the risks? What are the liabilities?

If you live with a spouse, children, pet, or significant other, will your students be comfortable working there? Your first preference should be a space that’s comfortable, safe, and distraction-free—for your students and for you.

  • Should you tutor at your home?
  • Your student’s home?
  • The school or university where your student attends?
  • A library?
  • A church?
  • A coffee shop?
  • The conference room at the office that no one uses after 5pm?

Always think through the location, first. Have a back-up plan in case your first option falls through.

Consider everything from parking, to lighting, to heat and A/C, to gate or access keys for apartments or offices, to mileage and gas, to convenience, to proximity to the freeway, to public transportation, to lighting after hours.

If a space will be provided for you for free, is any special documentation involved? Will you need to create a contract or waiver?

If you decide to rent a space, have you negotiated the best rate? Have you determined a reasonable, sustainable budget? Have you factored in the long-terms costs of repairs and maintenance?

SIX: Will you tutor online?

The prospect of online tutoring is so alluring! Blazer on top, PJs and slippers on the bottom. What a perfect life?!

If you choose to tutor online, what curriculum will you use?
If you will develop it yourself, is it ready-to-go now, or will you need time to put it together before you advertise and recruit new students?

Are your tech skills good enough, and is your equipment functioning properly?

If you’ll use a new software, have you worked out all the kinks?

SEVEN: What is your rate?  

When you’re first starting out, even if you are certified teacher, it can be tempting to undersell. You want to be helpful, and you want to attract motivated students who’ll be engaged and committed. You may even be a little worried that if you charge what you really think you’re worth, no one will come.

Think long and hard about what you will offer and how your service distinguishes itself from all the other tutoring programs that exist.

Will you offer the same rate for individuals that you offer groups?

Will you cap your sessions at a certain number of students? Will this be based on the family’s preference or simply your availability?

EIGHT: What curriculum will you use?

If you’re an experienced or knowledgeable educator, you may already have a detailed, polished resource at your disposal. Perhaps you’ve used it in other programs, classes, or sessions.

Perhaps you created it yourself throughout the years.

Some families are more comfortable reviewing and examining the curriculum before the program starts. It may help them determine if your program is best for their child.

Is your curriculum in its polished, final state?

Or will you just supplement whatever material is used in the student’s school? If so, how will you get access to it?

If not, what resources are you comfortable sharing with families, upfront?

NINE: When are you ready to start?

Marketing and advertising can be unpredictable, but unbelievably effective.

When I thought I was ready to start my own tutoring business, I planned to continue working full-time, but tutor part-time until it was more financially sustainable. Since I was actually already tutoring for a company, I wasn’t quite ready to recruit my own students.

But just to test the waters, I made a simple flyer (in Microsoft Word, mind you!) and posted it on Craigslist.

Yep. Craigslist.

Less than a week later I had my very first student.

Yay! Yikes!

Shoot. I had plans that weekend and off-and-on for the next few Saturdays.

When are you READY to start?

TEN: Will you create an LLC? If so, should you do it before you even recruit your first student?   

I don’t have a good answer to this question. It’s one that I’ve debated myself.

On the one hand, an LLC status might provide a sense of legitimacy for you and for your families. They may be more comfortable paying an LLC than depositing small, consistent sums of money into your PayPal account.

On the other hand, JUST having an LLC doesn’t mean that your business is now, magically, legitimate.

There are tax implications to consider. Accounting and book-keeping implications.

Not to mention that actual EXPENSE of establishing your LLC, the time it takes to put the paperwork together and secure appropriate licenses and certifications, etc.

You may even determine that an LLC isn’t actually the best business structure for your long-term goals. Figure out what’s right for you.

Conclusion

For current and former educators alike, creating a tutoring company is an attractive undertaking.

You get all the benefits of teaching without the less-than-desirable parts.

As a freelance tutor, independent consultant, or business owner, you’re able to connect with students in meaningful, significant ways.

You can create the curriculum that works best for their needs. You can better assess their immediate growth and development. Additionally, you’re better positioned to help them progress and help families reach their academic goals.

Before you decide to create your own tutoring company, make these 10 decisions first.

If you currently own your own tutoring company, feel free to share the tricks of the trade. What wisdom can you share, and what resources can you recommend?

Author: Anj.

Hi! I'm Anj. Thanks for visiting my page. I'm an aspiring writer, former teacher, and Houston native. I've worked in education for more than 15 years. This blog was inspired by (1) my first year teaching experiences and (2) my lovely student loan debt. Feel free to connect if you'd like to guest post about personal finance.

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