A Guide to Starting an Online Tutoring Business

Kelly Hernandez
A person waves to a child they are tutoring on their laptop.

Whether you’re a teacher looking for a second job or an entrepreneur seeking full-time income, online tutoring may be a lucrative choice. With the COVID-19 pandemic, many students are completing their education online. These students are facing many obstacles and may need help staying on track.

Online tutoring is a convenient and effective way to ensure students maintain good grades, even with virtual schooling. Therefore, many parents are enlisting professional tutoring help for their children. The global private tutoring market value is expected to grow to $279.3 billion by 2027, according to Research and Markets.

There are many profitable online businesses and the online tutoring industry is thriving. Review this guide to learn more about becoming an online tutor and what you should consider before launching your business.

Requirements to Become an Online Tutor

As an online tutor, you’re establishing yourself as a subject-matter expert and qualified instructor so it’s likely that your clients will ask to see your credentials. Most potential customers will want to know you have certain degrees, certifications, or other official documents, before doing business with you.

Before launching your online tutoring business, you may want to consider obtaining one or more of the following:

  • Teaching certification or experience: If you’re a certified teacher and have experience teaching, it shows you know how to handle students and assist them with school materials. With a teaching certification, your options are open for tutoring and depending on your experience, you may be qualified to tutor elementary, middle, or high school students.
  • Higher education degree: With a bachelor’s degree, you’re also qualified to tutor elementary, middle, and high school students. With a master’s degree or higher, you may also be able to tutor college students with their coursework. In addition to this degree, specializing in teaching or having some experience in instruction will also help you create an effective tutoring plan.
  • Subject-specific certification: If you feel you have advanced experience in one subject, such as Spanish or geography, earning a subject-specific certification in the field will boost your credibility. If a student is looking for a tutor in a certain subject, your certification will allow you to stand out from other online tutors.

Make a Business Plan

You may assume that as a freelance worker, you don’t need to make a business plan before you launch your company. However, it’s important for every e-commerce store to have a business plan, including online tutoring.

Your plan will help you create a realistic budget for your business and consider your goals for the future. When creating a business plan, be sure to include the following:

  • Company overview: Your company overview outlines your tutoring business, including the services you’ll provide and how you’ll offer them.
  • Market analysis: Do some market research to learn more about the type of students you’re targeting. A market analysis will help you narrow down the scope of your marketing efforts.
  • Financial projections: With an online tutoring business, you won’t need to worry about obtaining a retail space or paying rent. However, there are other costs to consider, such as advertising, software, and employees.

Register Your Online Tutoring Business

If you’re operating as a sole proprietorship or partnership, it may not be necessary to register your online tutoring business. However, if you’ve chosen a different business type, such as a limited liability company (LLC), registration may be required in the state you’re doing business.

If you need to register, contact your state government to complete the registration process. You may need to file articles of incorporation and pay a filing fee. When you register your business, you have the ability to file taxes for your business separately from your personal return.

Configure Your Computer Software and the Tools You’ll Need in Order to Tutor

As an online tutor, the computer software and online tools you use will determine your efficiency and ability to communicate with your students. Consider the tutoring and accounting software you’ll need before you launch your online business.

Tutoring Software

Video and tutoring software are key components in communicating with your students. Tutoring software can help you see your student’s screen and vice versa, making it easier to explain complex concepts.

Consider your teaching style and the subjects you specialize in when choosing your tutoring software. The online tools you choose should become crucial teaching aids that help you show your work, speak directly with students, and collaborate on documents.

Accounting Software 

As a small business owner, accounting software is also crucial to ensuring your business is successful. With computerized accounting software, your expenses and profits are automatically recorded when you sync the system with your bank accounts.

With an online accounting system, you may be able to submit electronic checks and take online payments from clients. Most accounting software solutions can be accessed online and offer data and graphs that allow you to better understand your financial projections at a glance.

Set Rates

The rates you set determine your bottom line and whether you’ll make a profit. Therefore, it’s important to analyze your operating costs and the time you’ll need to dedicate to a specific project before setting your rates.

If you have vast experience in a subject, you may be able to set higher rates than if you have more general knowledge. You may also want to consider providing tutoring packages that offer small discounts to clients who commit to several tutoring sessions with you.

Market Your Business

With so many online businesses in the market, it’s easy to get lost in the crowd. To ensure success, you’ll need to develop an aggressive marketing strategy that builds your online presence and shows off your expertise.

There are many ways to promote your business online and in person. When launching your online tutoring business, it may be beneficial to do the following:

  • Create a website that highlights your specialties.
  • Implement a social media strategy that focuses on your effective tutoring strategies.
  • Start an informative blog that provides tips and information on what you do.
  • Ensure your business listing is available through search engines, such as Yelp and Google.

An effective marketing strategy ensures potential clients can find your business, learn about what you do, and reach out for additional information. With a thorough marketing plan, you’ll increase online brand exposure and grow your customer base.

Tutoring is in demand and if you develop a solid business plan and set rates properly, you may find success with an online tutoring business. With an in-depth marketing plan and expertise or certification in specific subjects, you’re likely to attract clients and continue to experience growth.

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