1. Decide if a Tutoring Business Is Right for You
2. Pinpoint Your Niche
3. Plan Your Budget
4. Do Research
5. Scope Out the Competition
6. Choose a Name
7. Deal With Financial and Legal Issues
8. Create a Marketing Plan

Decide if a Tutoring Business Is Right for You

If you're wondering how to start a tutoring company, it's not necessary to have a college degree. Some clients may be willing to use your service based on your experience, talent, skill, and knowledge in the subject you're tutoring. Before starting your tutoring business, consider whether you are a natural entrepreneur. Even if you're a great tutor, you'll also need to manage your own company. This includes skills like employee management and development, bookkeeping and finances, advertising and marketing, and customer service. 

Pinpoint Your Niche

The tutoring industry offers many potential paths. You can focus on elementary-aged children, reading instruction, SAT and test preparation, specific subjects, or working with special needs students. Younger students may be easier to teach, but tutoring older students is typically more profitable. 

Next, think about your audience; this is the parents if you plan to work with younger children and the students themselves for college age and older. Your marketing materials should list the subjects you tutor and your credentials in each. 

Plan Your Budget

Before starting your business, save up between three and six months of living expenses. This will allow you to quit your day job and focus on your business until it becomes profitable. Because word of mouth and reputation are important in the tutoring industry, expect your client base to grow slowly. You could also keep working full or part-time while you launch your tutoring business on the side. The income from the business can be saved so you can eventually strike out on your own. Install simple finance software that can help you keep track of the money your business brings in and your business expenses. 

Do Research

Answer the following questions through careful market research to analyze whether your tutoring business will succeed:

  • Is there a need for this business in my area? Is there an open niche I can fill?
  • Can I afford the start-up costs?
  • How much will I need to charge to be profitable? Can my local market bear this cost?
  • Can I get the materials and supplies I need?
  • Should I hire tutors to manage, or can I handle all the students myself? Where will I find qualified tutors to hire?
  • Do I need a business location or can I work from home?

Think about the sales territory you will cover. It should be big enough that it has plenty of potential students. Consider how far you are willing to travel and how far students will travel to come to you.

Scope Out the Competition

You should also learn about the other tutoring businesses that exist in your area, how they are managed, and what specialty areas they cover. This can give you a clue about how to distinguish yourself from the competition.

Choose a Name

When you have a name you like, search it online to make sure it's not already used by another tutoring company. Pick a name that stands out. Consult with trusted family and friends to get their opinions.

Consult with an accountant to determine the best business structure for you. A small business lawyer can advise about the legal aspects of business ownership, including state and local regulations, you must follow. Talk to an insurance agent to find out if you need business insurance, liability insurance, or both. Your local county clerk or department of licensing and inspections can tell you if you need a business license

Create a Marketing Plan

You will likely get most of your tutoring business through word of mouth. Seek referrals and recommendations from your students and their parents, their friends and classmates, neighbors and coworkers, administrators at local public and private schools, coaches, and your own friends and colleagues. 

Tell your area schools, libraries, and community organizations about your new business, and give them cards and brochures to pass along to parents. You could also try direct mail, and many tutors have had success by creating a blog and social media presence. Through these channels, provide tips and information that helps show clients your knowledge, and build their confidence in your services.

If you need help with starting a tutoring company, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.