Online tutoring provides educational support in an online, virtual environment where the teacher and student work from separate physical spaces. During the pandemic, this practice became widely popular as a way to maintain academic progress during remote learning.
Tutoring services may be provided through an external website or a learning management system (LMS). Academic online tutors can help students answer questions, write papers, and study-specific academic disciplines in a virtual learning environment.
This article discusses many reasons to start an online tutoring business, including its profitability and consumer demand, as well as some essential steps to create a successful online tutoring business.
Are Online Tutoring Businesses Profitable?
Depending on how you charge for tutoring services with your online business, tutoring can generate a very comfortable income. It has minimal overhead and high demand for online tutors across various disciplines.
As a subject expert with solid teaching skills, you could generate as much as $10,000 monthly in earnings. While there are no specific requirements or credentials to start an online tutoring business, you should at least have a high school diploma or GED.
According to Forbes, the online tutoring market is estimated to reach $325 billion by 2025. As the technology around online teaching apps continues to evolve, now is a great time to jump into tutoring in a virtual space.
The top subject areas in demand for online tutors include the following:
- Test Prep (SAT, ACT, AP, etc.)
- English tutors
- High-level math courses (calculus, trigonometry, college algebra)
- Coding
- Languages (Mandarin, Spanish, and English)
If you are a subject matter expert in any of these, you already have many critical skills to start tutoring pupils within your target audience. Below, let’s look at some benefits of starting your business.
Key Benefits of Starting an Online Tutoring Business
Remote work significantly increased in popularity during the Covid-19 pandemic, and many professionals are seeking a job that offers the ability to work remotely. In addition to remote work opportunities, there are several significant perks when running an online tutoring business.
The first is flexibility. Not teaching in a brick-and-mortar school allows you the freedom to reach a larger audience and the power to set your hours. With this level of freedom, you can determine your priorities and have more energy to create a meaningful impact on the students you help.
Online tutoring is also a rapidly growing industry. While social distancing measures brought on by the pandemic significantly increased the demand for tutoring platforms, the need for online tutors isn’t going anywhere. Even after restrictions began to subside, the market for online tutors grew from $8.36 billion in 2022 to $9.68 billion in 2023, with a compound annual growth rate of 15.8%.
Additionally, you can reach communities needing your services when you tutor online. Rural communities have more difficulty recruiting and maintaining highly qualified teaching staff. Online tutoring platforms offer more opportunities to close achievement gaps with the help of highly skilled subject matter tutors through tutoring websites. E-learning and video conferencing make it easier than ever for students in underserved communities to connect with subject matter experts through online tutoring sessions.
The last benefit of starting an online tutoring business is that it is relatively cheap. You just need to have a solid marketing strategy and business plan in place. While these require a lot of time, you can do it with minimal overhead.
You can follow the steps below to help you hit the ground running and build a quality online tutoring business.
Steps to Start Your Tutoring Business
The majority of people seeking online tutors are middle school and high school students because they are starting to prepare for college entrance exams and workforce readiness.
They need help in specific academic disciplines, writing skills, interview skills, and soft skills like study habits and organization skills. This means you need to know what you will teach and who your target audience is before you start your online tutoring business. Follow these steps to help you get started.
1. Determine what academic areas you want to teach
Take stock of your experience, education, and previous jobs. Use this to structure the services you will provide and build around that. Depending on your qualifications, you will decide which areas to focus on. You need the following details.
- Do you prefer elementary, secondary, university, or a combination of levels?
- What subject matter (English, math, languages, test prep, or other) you excel at.
- How far you want to reach (domestic or international).
2. Decide on the business model that suits you best
You can run your business as a sole proprietor (DBA) because the paperwork is less cumbersome and easier to file, or as an LLC if you want the liability protection to keep your personal assets safe in a lawsuit. Both business models have their benefits, but you must understand which works best for you.
Once you have decided on the best option, you will register your business.
3. Determine what technology and software are needed to provide your services
Some essentials include the following:
- A reliable computer and high-speed internet access.
- Doc cam, webcam, or a digital whiteboard.
- Membership to applicable teaching apps and online platforms (Google Classroom, Quizlet, Google Hangouts, etc.).
- A CRM platform for easy client communications and payment scheduling.
- A tablet or digital drawing pad (if applicable).
4. Decide on your pricing
Online tutors can make anywhere from $20/hour to $100/hour, depending on their level of expertise and the subject matter they teach.
Business owners should decide on an hourly rate that brings the following things into consideration:
- The income you need to meet your basic needs (rent/mortgage, utilities, food, gas, insurance, number of dependents, medical care, etc.)
- Your level of education and expertise
- How much vacation time you plan on taking (remember, you won’t make money on your days off, so you need to plan accordingly)
5. Decide a marketing strategy for your business
Whether you are running a full-time business or a side hustle, you need to figure out how to reach potential clients and convince them to use your service. Some marketing practices that may help you increase awareness of your online tutoring business include the following.
- Social Media accounts for your business (TikTok, Facebook, Twitter, LinkedIn, etc.).
- A business website that uses SEO best practices
- In-person events sponsored by schools and other educational institutions (parent nights, education fairs, college nights, etc.)
- Start getting word-of-mouth referrals through online parenting groups.
- Ask for testimonials once you start gaining clients.
6. Create and use a tutoring contract template
This contract should outline the scope of your services, responsibilities, and payment details. No body likes to do the legal work, but it's an important part of protecting your business.
Tutoring License and Other Requirements
If you want to start an online tutoring business, you must meet some educational requirements. First, you must have a minimum of a high school diploma or a GED to become an online tutor. If you want to tutor a higher grade level or a specific topic like test prep for college entrance exams, you should have a bachelor’s degree or higher from an accredited college or university.
A tutoring certification is another credential that will be useful as it increases your credibility and professionalism in the eyes of the parents and students who will use your service. These certification programs will require a few hours of training and background checks. Their price varies depending on the type of certification you are going for, but you can typically expect it to be around $250.
You should also highlight any areas of specialization and work experience that align with the subject you are tutoring on your website and other marketing material.
How to Create a Tutoring Business Plan
Your business plan acts as a road map for your business by laying out your brand identity and how you will organize each aspect of your business. This is an essential step and shouldn’t be glossed over. As part of your due diligence, you will write a plan that assesses each business category and how you plan to address it.
Your business plan should include the following:
- A company description - Who are you? Who do you serve? What service are you providing, and how will you deliver it? What is your mission and vision statement?
- Market research - Analyze your competition and learn what others charge and earn within your niche.
- Your marketing strategy - How are people going to know you exist?
- An operating plan - This is the blueprint for how you will turn your dream into a reality.
- Team description and responsibilities - Even if you are solo, describe the role and responsibilities you will handle within the business. If you plan on outsourcing any of your duties, explain who they will go to and their function.
- Your financials - Answer all of your money questions. How much will it cost to start? How will you fund it? What monthly expenses do you expect, and what system will you use to track it all?
Discover Practice and Level-Up Your Online Business
Running an online business requires a lot of moving parts. Practice was created to help small business owners navigate some of these pieces more easily. If you want to level up your online tutoring business and streamline how you operate it, from scheduling to managing your services, Practice can help!
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