The Tutoring Business

is pleased to present

Starting a Tutoring Business:
Seven Important Lessons

By Tony Aitken, President
The Wealthy Tutor,

Specializing in Tutoring Business
Startup Sytems and Resources

After working in the telecom industry for 15 years as a marketing consultant, I started looking around for new challenges. As consulting opportunities in the telecom industry were starting to dry up by 2000, I decided to look at different growth industries where I might get a new start. After a friend of mine told me he was considering buying a tutoring franchise, I started to research this industry, and soon learned this was huge and rapidly growing industry.

Although exact numbers are hard to come by, I would estimate the current tutoring industry in North America to be upwards of $10 billion annually and growing at a healthy pace. This growth is being fuelled by such things as declining funding for public education, increasing competition to get into many college & university programs, and the Bush administrations `No Child Left Behind' initiative.

In September, 2003, I started a tutoring business by hiring university students on contract and sending them to people's homes to tutor their children in Math, Science & English. Although I had absolutely no experience tutoring whatsoever, I generated over $80,000 in revenues in my first year and over $125,000 in my second - and this was still just a part-time business! If I can do it - you can too. Here are some of the important lessons I have learned along the way (sometimes painfully!) - I hope they are of some use to you.

Seven Important Lessons I Have Learned Starting My Own Tutoring Business

Do a Self-Assessment

Ask yourself why you want to start a tutoring business. If the answer is "Because I can't find a job and want to make a lot of money fast", then perhaps you should think about it some more. If the answer is "Because I want to work for myself and I'm really excited about starting my own business", then that's a good reason. If you want to start a successful business, it really helps if you have a lot of passion for going it on your own. This passion will energize you for all the hard work ahead and will help you get over the minor setbacks along the way. I can't think of anything more exciting (well, almost anything) than starting a successful business, and if you are like me then please read on.

Write a Business Plan

If you don't know where you're going then you will probably get there! Although this may sound like an old clich‚ it is absolutely true and most relevant when applied to starting a new business. Writing a business plan will force you to define your new business by answering the following questions:

I have seen may companies, large and small, get hopelessly sidetracked because they failed to develop a coherent business plan. What's even more amazing is how big some companies can get before they are forced to sit down and write a business plan.

Implement Your Plan

Once the business plan is completed and you're ready to implement, you should proceed as per your plan without delay. Taking that first tangible step can often be the hardest. The best thing to do at this stage is to itemize all the tasks you need to get done before your business is up and running and put a date beside each task. Now you know what needs to get done so you can get started without delay. Below is a sample implementation plan.

Don't Sell Yourself Short

One of the biggest mistakes you can make as a tutor is to undervalue your services. Last year I was speaking with a friend who had a Bachelor of Science Degree and an MBA and was tutoring Math to high school students during his spare time. When he told me he was charging only twenty dollars per hour, I was very surprised. Most of the large tutoring academies were charging $40 to $50 per hour (and some as high as $75) and required students to buy large blocks of hours up front. Even then, they weren't providing the one-to-one level of service that my friend was providing, and I doubt if the average tutor was as educated as he. Even after I pointed this out to him and said that he should be charging at least $40 per hour, he was still skeptical.

The reason for this kind of thinking is that he, as well as most people, has been programmed to undervalue their services. He has set an arbitrary hourly wage in his mind, that he thinks he's worth, and simply cannot conceive of anybody willing to pay him a cent more. This is faulty logic, and it's costing him a lot of lost revenue. When deciding upon your hourly rate, first you must do your research. Call around and ask how much your local tutoring academies are charging, and what services they provide for this cost.

Get It Up Front

I cannot overstress the importance of getting the money up front. If you have to collect money every time you tutor a student, this is going to a major, time-consuming nuisance, especially if you have employees. Once a new customer has made the decision to hire you, they will usually not object to paying you for at least 5-10 hours up front. When I started my tutoring company, our smallest package was 20 hours for $800 and we rarely had problem collecting this up front. To make it fairer for the customer, you could accept post-dated checks and even offer refunds with a modest cancellation fee. If customers outright refuse to pay anything up front, they may not be serious about the tutoring so you might not want to take them on as a customer.

Don't Waste Money

People who are starting up their own tutoring academy, or any other business for that matter, are often tempted to spend a lot of money on stuff they don't really need. Excited and impatient to get started, many first-time entrepreneurs can get carried away with acquiring the trappings of a successful business before they've generated even one dollar in revenue!

A good general rule of thumb is to buy only what you need right now. This could mean setting up a tutoring room in your house instead of renting expensive office or store-front space, at least for the first 6-12 months or so. Perhaps you don't really need an expensive new computer - your old one will do just fine for composing invoices, account statements and student assessments. Instead of purchasing a large ad in your local telephone directory, try a smaller two-color ad that will cost less and stand out more.

Don't Get Discouraged One of the biggest causes of business failures, aside from poor planning and management, is discouragement. Most new businesses have slow periods and setbacks in the early stages, and the successful business people are the ones who can keep this in perspective and still maintain a positive attitude when things aren't going so well. One of the best tools I have found for keeping the business in perspective is a realistic and achievable revenue plan with monthly revenue targets. At the end of the first month of tutoring, instead of saying:"I only made $275 for whole month - my business is a failure!" I would say: "I made $275 even though I only planned to make $250 - I beat my revenue plan by ten per cent!"

This is just a very brief overview of the top seven lessons I've learned in starting my own tutoring business. I invite you to visit my website, for more information on starting a tutoring business where I offer a variety of complete Tutoring Business Startup Systems for any size business.

© Copyright Tony Aitken. All Rights Reserved.

Tony Aitken is the President and co-founder of The Wealthy Tutor, a tutoring business that provides complete tutoring business startup systems for anyone who wants to start a tutoring business. Complete Forms, Tutoring guides, templates, Business guides, Tutoring Assessment Test Package, billing system, tutor certification, and more are available from The Wealthy Tutor.


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