There’ll never be a shortage of students who require help. According to the Australian Financial Review, tutoring is an industry worth billions that continues to grow every year.
Are you thinking about starting your own tutoring business to potentially receive a share of that revenue? Or maybe you would like to start tutoring due to it being a flexible and enjoyable job?
If you do decide to start a tutoring business, you must ensure that you’re providing a high-quality service. Furthermore, you’ll have to deal with a list of back-room logistics such as generating tax invoices and submitting tax reports.
Starting a tutoring business can be overwhelming. However, we’re here to help guide you to success. In this article, we have outlined everything you need to start a tutoring business and how to purchase an existing franchise.
Read along!
How To Start A Tutoring Business
4 Key Steps Before Launching Your Tutoring Business
1: Determine the viability of your idea
In order to determine whether your tutoring business will be successful, you need to determine the following:
- Whether there is a market for the subject matter you intend to teach
- Whether you can afford to pay the startup costs
- How much you’re willing to invest in the business
- Whether you can afford to hire employees
2: Identify your clients
One of the most important steps is determining who you will be providing your services to and the subject matter of the services provided. These two factors will have a significant impact on your business plan. Key considerations you should think about include the following:
- Which subjects do you plan to teach? For example, will you be teaching Maths, English or Science etc.?
- What grades are you interested in tutoring? For example, will you be providing tutoring services to primary school, high school or university students?
- Will you be tutoring students to prepare for a particular assessment? For example, the UCAT exam or HSC exams
3: Update your skillsets
Before you begin providing your tutoring services, you need to ensure that your knowledge of the subject matter you’re teaching is strong and up to date. In the end, students will be paying you for your expertise and assistance in the subject matter. You should consider the following factors:
- You should identify subject matters you have the most knowledge about, as this will allow you to provide a high-quality service
- You should familiarise yourself with subjects that are in high demand if you would like to provide a generalised tutoring service, for example, English, Mathematics and Science
- Determine if you want to narrow the subject matter of the tutoring services your business will provide, for example, if you would like to focus on teaching algebra
- You should undertake practice assessments to determine your strengths and weaknesses in relation to the subjects you plan to teach. This will allow you to determine where your knowledge is lacking
- You should become familiar with the latest syllabus of the subject you plan to teach if there is a syllabus existing for the subject
- You should practice teaching your subject as having knowledge of your subject matter alone is not enough if you can’t effectively share your knowledge
- Familiarise yourself with different teaching methods as every student will be different in regards to how they like to learn
4: Choosing the right business model
There are multiple business models you can choose from. These include the following:
- Home Tutoring: You can start your own tutoring business where you provide private tutoring in-person at your own home
- Online Tutoring: If you don’t feel comfortable with students travelling to your home or if you don’t want to travel to the homes of students, you can provide your tutoring sessions online using services such as Zoom or Skype
- Private tutoring: You can choose to provide private tutoring to your students
- Group tutoring: You can choose to provide tutoring to groups of students at a time
- Franchisee: You can choose to join a tutoring franchise that already exists to use their business model
- Hybrid: You can choose to offer in-person or online tutoring through a hybrid service
Step 1: Choosing your business structure
Choosing your business structure is crucial as this decision will have a major impact on your tax, liability, and reporting obligations.
If you’re creating your tutoring small business on your own, starting off as a sole trader is the most convenient option as you won’t have to worry about annual or registration fees. Furthermore, you can lodge a tax return using your own personal tax file number (TFN). However, your taxable income includes your earnings from your tutoring business.
Partnerships are a good option if you want to run your business with someone else. Running your tutoring business as a partnership will provide you with similar rights and duties as sole traders. Furthermore, you’ll enjoy the benefit of having access to more funds.
You can also register a company for your tutoring business. Operating your tutoring business as a company will provide you with the following benefits:
- Greater legal protection
- Tax minimisation
- Enhanced brand image
- You will avoid co-founder conflict
- The ability to raise significant capital
Incorporation is only suggested when you’re serious about your business.
Step 2: Get an ABN
No matter how you’re running your business, you’ll need to register an Australian Business Number (ABN) for your tutoring business to comply with the law.
We have a guide on how to apply for an ABN if you require further assistance.
Step 3: Resources
This is where you bring your business ideas to life. The type of tutoring services you are providing will determine the resources you require for your business. For example, whether you’re providing an online service or whether you’ll be providing face-to-face in-person tutoring. The resources you may require for your tutoring business can include the following:
- Print outs of syllabuses
- Paper
- Pens
- Textbooks
- Classrooms
- An office
- Internet
- A business website
- Computer tools and software
Step 4: Staffing
If you aren’t going to be providing your tutoring services, it is crucial to hire experienced tutors to ensure that you can educate as many students as possible through your tutoring business.
In order to build up your tutoring team, you’ll need an employment agreement to set out the terms and conditions of their role. Employment agreements are important to limit liability by letting both parties know their rights and obligations.
Step 5: Accreditation
If you’re planning on working with children, you’ll need to apply for a Working With Children Check (WWCC). You may also consider registering for a membership with the Australian Tutoring Association (ATA). The benefits of registering your tutoring business with the ATA include the following:
- Accreditation
- Promotion
- Various financial discounts
- Your business will receive discounts for insurance, including public liability insurance
- Your business will be listed on their website for free, allowing students to find your business and search for your business
- Your business will receive a qualification and endorsement by the ATA
- Your business will be permitted to display the ATA logo on the business website
- Your business will receive discounts in relation to purchasing educational content and printing
- Your business will receive assistance from ATA in relation to any complaints made against it
- Networking and media opportunities
Step 6: Contracts
A written agreement for your clients is recommended if you’re running a public tutoring service. An agreement should outline the following:
- Expectations of your tutoring
- Joining and cancellation fees
- Any other important terms
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Should you buy an existing tutoring franchise?
You can choose to buy an existing tutoring franchise if you would like to utilise an existing pool of resources or if you’ve already found a business you would like to purchase. Through this, you can avoid the hard work that goes into creating a brand new tutoring business. Furthermore, you won’t need to build up your reputation or brand, which will allow you to focus more on your tutoring vision.
However, going down this route may increase your obligations. You may be required to report on the performance of the business, meet specific targets and other potential duties. Here is our full list of ongoing obligations as a franchisee.
How to legally protect your tutoring business:
- Having insurance can protect your business in multiple ways
- You will be legally required to apply for a Working With Children Check (WWCC) if you will be providing services to children
- You should use a services agreement to outline the services you will provide
- You should use an employment agreement for the tutors you hire for your business
- Your business will require a Privacy Policy if you plan to collect personal information from your students
Other key considerations:
Pricing/ Payment methods
You will need to determine what your business will charge for the tutoring services provided and how they must pay for the services. Most tutoring services are charged at an hourly rate. When determining your hourly rate, you should consider the following:
- How much teaching experience you have
- The qualifications you possess, for example, a university degree
- The skills you possess
- The amount of profit you would like to make
- How much money you spend to provide your tutoring services
Insurance:
You should consider getting insurance for your business as your tutoring business will be providing a public service. The types of insurance that could benefit your business include the following:
- Public liability insurance
- Professional indemnity insurance
- Equipment insurance
By obtaining these insurance policies, your business is protected from possible damage to property, personal injury and potentially unsatisfied customers.
Business name:
Selecting the right name for your business is crucial as it’ll help with creating brand recognition. Furthermore, you’re required to register your business name.
Marketing:
You should create a marketing plan for your business to attract students. A proper marketing plan will help you promote your business and will allow you to target your audience. You should also utilise social media channels such as Instagram and Facebook to reach a larger audience.
Furthermore, you could create a website for your business. This will allow your business to be easily discoverable to students who are searching for tutoring services. Additionally, you can provide detail regarding the services you provide, and students could leave testimonials.
Availability of services
It’s important to decide whether the services provided by your business are available on a part-time or full-time basis.
Conclusion
Due to tutoring being a highly competitive market, you need to ensure that what your tutoring company is offering is unique and a high-quality service.
If you’re still unsure about how to start a tutoring business, you should hire a lawyer for further legal advice.
