How to Start a Tutoring Business

Students today face growing pressure to excel, and the skyrocketing demand for extra help is driving the tutoring industry to new heights. Currently valued at over USD 55 billion, the global tutoring market is projected to grow to a staggering 100 billion by 2030. Now that’s some serious extra credit!

If you've ever dreamed of turning your passion for education into a thriving small business, tutoring might be the golden opportunity you've been looking for. Unleash your teaching prowess with this step-by-step guide, and you could find yourself coaching your way to success!

What Is a Tutor?

The dictionary defines “tutor” as a private teacher, typically one who teaches a single student or small group. Tutors help build confidence, learning skills, and knowledge and can profoundly impact their communities by guiding students toward educational success.

How to Become a Freelance Tutor

With few upfront costs and a flexible work schedule, tutoring can be a low-risk venture with many potential rewards. Here are a few tips to improve your learning curve:

1. Test the waters: If you’re curious about becoming a tutor, why not jump in? Tap into your trusted network of friends, family, and neighbors to see if they might need tutoring help. This is a great way to hone your skills and build confidence.

2. Target your client base: If tutoring feels like a good fit, your next step is to decide who you want to tutor and what subjects you want to cover. Here are some questions that may help you identify your ideal clients:

• What subjects are you passionate about? Do you love languages? Crazy about chemistry? Enthralled by equations? Think carefully about the subjects you plan to teach. You are far more likely to succeed if you enjoy the process.
• What subjects are you most skilled at? Are you a math, science, or tech whiz? STEM subjects - science, technology, engineering, and math - are in high demand. Hablas Espanol? The demand for foreign language education is also on the rise. Pick a branch of study you excel at and enjoy. Specializing in a subject will highlight your expertise and differentiate you from the competition.
• What age group do you enjoy mentoring? Your area of expertise also may influence your target age group and how much you can charge. For example, teaching elementary and middle school subjects may be easier and more rewarding, but tutoring college students and adults can potentially be more lucrative.
• Do you want to tutor for a specific test? You may also want to consider a sub-specialty in standardized testing, such as the SAT (for college admission) or LSAT (for law school). Clients may be willing to pay top dollar for help with specialized tests like the CPA exam, especially if you’ve obtained an advanced degree or are highly skilled in that field.
• Do you prefer tutoring groups or one-on-one? One-on-one sessions allow students to focus on the task with personalized instruction and pacing. While small-group tutoring may be more lucrative, this approach may ultimately be more work and less effective.

3. Hone your expertise: After identifying your ideal client and subject matter, your next step is to assess and sharpen your skills. Here's how to get started:

• Test yourself: The old maxim, “know thyself,” will be critical to your success. Before you launch, carefully evaluate your skills and identify knowledge gaps. Take a practice test to get up to speed on the latest educational standards and information in your chosen field. If you decide to specialize in standardized testing, you’ll want to take a number of practice tests to improve your performance and understand how they work.
• Bone up: After targeting your weaknesses, it’s time to hone those skills. Ask accomplished teachers in your social network to recommend coursework and curriculum guides. Set goals and put yourself on a study schedule. Maintaining these standards will serve as inspiration when coaching students through their practice sessions.
• Learn how to teach effectively: Obtaining knowledge isn’t enough. Effective listening, collaboration, adaptability, empathy, and patience are all essential qualities of a successful teacher. Reach out to trusted members of your social network or take online courses to help strengthen your interpersonal skills.
• Create an engaging curriculum: Learning should be fun! Start by determining your student's needs and goals; set clear learning objectives and timelines. Next, develop an engaging curriculum to reach those goals. Go online to research current best practices in teaching methods or the latest in innovative educational technology. And check out this link for free teaching tools to take your tutoring business to the next level.

4. Choose Your Business Model: Next, it’s time to consider the type of tutoring business you prefer. You can choose from the following models — or a hybrid — when starting your tutoring business:

• Franchise: A tutoring company allows you to start a company branch in your area.
• In-person: Meet with students in a home, office, school, library, or coffee shop.
• Remote tutoring: Engage with students through online video.

A franchise model such as Kumon or Sylvan Learning may require a significant initial investment, but it also can be the most profitable. For example, startup costs for a Sylvan franchise are approximately $100,000 - $200,000 USD , but for the top 35% of territories by gross revenue, those businesses can generate an AUV of over $840,000 .

The in-person model requires much less investment, both upfront and over time. Aside from basic learning supplies like paper, pencils, and dry-erase boards, you’ll typically only need a computer to get started. You can even save on commuting expenses with a separate home office for sessions. If you’re uncomfortable sharing your address, you can travel to a client's home or meet at a local school, library, or café. Bonus — your mileage and other travel expenses may now also be tax deductions!

Remote tutoring may involve the lowest overall cost. You generally shouldn’t need more than a web presence, internet service, and a computer to launch. This option is best for tutors who want to run an online business with the opportunity to connect with students.

Since the early days of COVID-19, remote tutoring has exploded. So let’s take a closer look at this fast-growing sector of the tutoring market.

How to start a tutoring business online.

The global remote tutoring market was valued at over 7.5 billion USD in 2022,with an expected annual growth rate of approximately 15% through 2030.

Tutoring entrepreneurs should view these market predictions as an opportunity to expand their reach and revenue. Here are some tips on how to cash in on online tutoring jobs from home.

1. Set the scene: Setting the right atmosphere for a productive remote tutoring session is key. Let’s face it — online video can sometimes look grim. Find a quiet place in your home with plenty of light and a clean, neutral background.

2. Get hardware ready: Along with your physical classroom, make sure your computing hardware is ready for prime time. You’ll need a computer with a strong internet connection, webcam, and microphone for remote tutoring sessions. You also may want to consider lighting and other audio/video equipment.

3. Get software ready: Be sure to look for a video conferencing service that allows you to schedule sessions, send meeting links, and share your screen. Zoom, Google Hangout, and Skype are some of the top-rated free services you may want to consider.

Google Docs is a powerful tool for sharing documents, editing, and making comments. Google Classroom is an all-in-one teaching and learning platform that provides a central hub for resources, assignments, and grading.

You also may want to consider purchasing virtual whiteboard software to illustrate and share concepts with your remote tutoring students.

4. Join an online tutoring website: What’s one of the fastest ways to start tutoring online? Consider joining an existing tutoring platform. Often, it’s as simple as filling in your basic credentials, a bio, and tutoring preferences. Tutoring services such as Chegg, Preply, and Skooli will connect you to students and provide high-tech booking, scheduling, and payment options.

What Do I Need to Start a Tutoring Business?

It’s never easy to start a business, but tutoring is one of the least complicated.

Here are some essential steps to launch your tutoring venture:

1. Choose your business structure: Some tutors who are just starting out might not consider their side hustle a legit business. But Uncle Sam and your state may beg to differ. So to properly comply with both, start by choosing a business structure. This critical decision will likely determine your tax rate, among other implications.

For most tutors, a sole proprietorship is the most common business structure. But don’t panic — a sole proprietorship is easy to form. If you begin conducting business and don’t pick another entity type, the IRS automatically considers your business a sole proprietorship. There may come a time when you’ll want to consider a more complex business structure such as an LLC (Limited Liability Company). For more information on the differences between an LLC and sole proprietorship, go here.

2. Pick a name: First impressions matter; this is your chance to define your brand and distinguish yourself from competitors. When you start a sole proprietorship, your legal name is, by default, your business name. But you have the option to create a separate business name, referred to as Doing Business As (DBA).

Check out the U.S. Patent and Trademark Office website to ensure your business name isn’t already taken. And sites like GoDaddy can tell you if your chosen website domain name is available.

3. Register your name: No further action is required if you opt to use your full legal name for your business. However, if you plan to use another name, you may need to register a DBA. Check with your secretary of state or county clerk’s office to ensure you’re completing the process correctly. Requirements to file vary from state to state.

4. Separate your business and personal finances: Even if you’re a sole proprietor, maintaining this divide will help you track and simplify your finances. And you will thank yourself when income tax season rolls around!

5. Create a business plan: All startups — large or small — need a road map. Sounds intimidating, right? Don’t panic, we’ve got you! Check out this helpful step-by-step guide that includes a free business plan template.

6. Report your income: As a self-employed individual, you must file an income tax return if your annual net earnings are $400 or more. Don’t stress, though! Starting a tutoring business means you can now deduct business expenses from your taxable income!

Does starting a tutoring business require a college degree?

Good news! Tutors don’t need any specific qualifications or degrees to start a business. While not required, a college diploma or advanced degree may give you a leg up. The career-planning site Zippia estimates that more than 65% of tutors hold bachelor’s degrees and 13% hold associate degrees.

Do you need a license to start a tutoring business?

Although you don’t need a teaching degree or tutoring license, if you tutor for a school or at a tutoring center, you may need certification from the National Tutoring Association. Certification can enhance your credibility with potential clients and employers, even if not required.

Another industry pro tip — consider getting a self-background check that you can share with potential clients, especially if you plan to tutor minors. This process can build trust and provide peace of mind for parents who aren’t able to supervise your session. You can request a background check at GoodHire for $29.99 and up.

What are the legal requirements for starting a tutoring business?

The requirements vary from state to state, but most small businesses need a combination of licenses and permits from both federal and state agencies. Sound overwhelming? We've done the research for you. Simply go here and choose the state where you operate to learn more about your licensing process.

Do Private Tutors Need Insurance?

As a successful tutor, you know the importance of dotting every “I” and crossing every “T.” But even when you pay close attention to every detail, accidents can still happen. And one disgruntled student or parent who thinks you were negligent can sue you.

Simply Business® offers insurance for tutors that protects your business when the unexpected happens. And there’s no need to study up — we’ve got you covered with info and resources to understand the types of tutor insurance you’ll need. And check out these insightful articles – and all the information in our Resource Center – that can help your business succeed:

• How to Start a Small Business: Our Easy-to-Use Guide
• Do’s and Don’ts of a Small Business Website
• How to Become Self-Employed Without Risking It All

What are the Start-Up Costs for a Tutoring Business?

If you don’t use an office, the start-up costs for a tutoring business might range from about $2,000 to 5,000. Stick to remote tutoring with a basic website and your costs could be even lower. If you plan to rent space and employ other tutors, you should have between $5,000 and $10,000 available.

How Much Should I Charge for Tutoring?

When you’re just starting out, you may want to offer a below-average hourly rate until you build your reputation. To determine the average cost for a tutor, research tutoring businesses in your area.

According to Glassdoor, a private tutor with one to two years of experience can earn between $14,000 and $42,000 annually. Tutors.com says the price for a one-hour tutoring session ranges from $25-$80, with an average of $52.50. But location can make a huge difference. For example, private tutor rates in New York might range between $120-$200 per hour, according to New York City Tutoring.

Is a tutoring business profitable?

Whether your business will turn a profit will depend on how many regular sessions you can book, times your hourly rate, minus expenses. Let’s take a look at an example:

If you can book five one-hour sessions per week at $52.50 per hour, you’ll make $13,650 per year in revenue. Assuming insurance and marketing may run you roughly $300 per month, you’ll realize a profit of approximately $10,000, as long as you don’t have any other expenses. Any additional expenses would be deducted from your revenue.

How to Advertise Your Tutoring Business

1. Word-of-mouth referrals: Let your community know about the launch of your new tutoring business with a kick-off email or text to fellow educators, friends, and family. You also can ask local schools to refer clients or post a flier on their bulletin boards.

2. Join an online marketplace: Create a tutoring profile on an online marketplace such as TutorOcean, Wyzant, or Varsity Tutors. These platforms match you with clients, and you can share your profile like a website.

3. Spread the word on Social Media: Establish your online presence with a website linked to a Facebook and Instagram page. And don’t forget to post your services on hyperlocal sites like Nextdoor.

Looking for more information on marketing your brand-new tutoring business? Check out these helpful guides:

• Word of Mouth Marketing: How to Grow Your Business
• What are the Do’s and Don’ts of a Small Business Website?
• Creating Consistent Facebook Content for Your Business Page

Be the Change!

If you have a passion for helping others reach their educational goals, you’re in luck. The data shows that demand for private tutoring isn’t slowing down any time soon. And there’s never been a better time to start your tutoring business. So let’s get you teaching!