a woman at a computer learning how to start a tutoring business online

How to Start A Tutoring Business Online

Wondering how to start a profitable tutoring business online? The number of users of online educational platforms has increased unprecedentedly in the past year. Better yet, the trend continues. According to analysts, the segment of online courses will grow to $300 billion by 2025. Starting your online training course is a great way to monetize talent if you have any industry expertise or practical skills.

We will see some challenges you might face and steps and strategies designed specifically for people who want to start their online tutoring businesses from scratch. Along the way, we’ll also touch upon topics like finding potential students and managing a profitable business. Let’s get started!

Prepare a Business Plan For Online/Offline Business

A BP is a detailed description of your project with calculations and prospects for the next few years. You will need it to attract potential investors or get a loan in the bank.

It is usually written two to six years in advance. You can make it a year as well, as economic conditions are changing rapidly. The most optimal case is when you make a business plan for three years: it is enough to show the perspective to your investors and consider market changes. The five-year plan seems a bit overwhelming – technologies are evolving day by day, and you have to use them to be competitive.


A business plan should include:

  • A description of a product or service. You have to make a detailed description, highlighting all the small details about your service;
  • A market analysis. It is a crucial part – a lot of start-ups avoid this one and close in a year;
  • A production plan. You have to describe what tools and technologies you will use when working with students;
  • Your company’s organizational structure. Investors have to know what kind of company this is going to be. Will they be shareholders or not?;
  • A marketing strategy for promoting services. As a business owner, you have to know how to promote the services you are selling;
  • A financial plan that resumes all the numbers. It is the most exciting part for investors. Can you not do that on your own? Ask a specialist for help.

A BP must answer these questions: how much money is required to launch a project, and how long will it pay off?

Summary Of The Business

The resume or summary is placed at the beginning of the business plan, but you will write it at the very end. It summarizes the whole document – the conclusions you can make based on the calculations. Investors might think about whether to spend time and money on your project or not after reading it.

The summary includes a description of the project and its competitive advantages, information about potential customers and partners. Please tell the investors how you will sell your services and your plans for the marketing part. Calculate what kind of start-up capital you need and where you plan to get it. Describe the critical stages in the project’s development and be sure to provide the payback period and projected profitability.

Let’s see how to draw up a business plan using the example of an online tutoring business. Unlike analogs, in these services, the students will choose the teachers, language, etc. You have to use a particular website builder to fulfill it.

Services Description

You need to describe the service you offer and analyze its future here. You can make a comparison chart with other similar services, highlighting the sales points.


Do Market Research

From the already developed business strategy, transfer the market analysis into the business plan. Competitors’ proposals are worth considering in detail. 

Focus on your target market once you understand the problem and the solution. Who will you sell your service to? How much detail you describe your target market depends on the nature of your business and the type of your business plan. It would help if you had a fit picture of ​​who your potential buyers are and their approximate number in any case. It calls into question the feasibility of your project if the number of potential clients is small. The market analysis should be preceded by a bit of research: you need to determine the target market segments and the size of each of them. 

We want to warn you against a common mistake: your target market is not “all customers.” Take a tutoring company as an example. In theory, such a company could claim that its target market is all people who speak. But in real life, to survive in the market, a company must focus on a specific segment of the market – students, businessmen, families with children, etc.

Analyze Your Competitors

Move on to describe your competitive environment after describing your target market. What other companies offer their products or services in an attempt to solve customer problems? What are your advantages over your competitors?

Business plans often present this information in the form of a “competition matrix” that compares competitor solutions to yours. A simple competitive matrix is ​​a table in which competitors are listed vertically and with horizontal comparison criteria. A mark is placed at the corresponding row and column intersection if a competitor’s solution meets a specific standard. Your main goal is to show that your solution is different or superior to other companies’ offerings. Investors will be interested to know what competitive advantages you have and how you plan to differentiate your solution.


Many entrepreneurs make the severe mistake of claiming that they have no competitors. Remember that every business has competitors. It is not necessarily “direct competition” where another company offers a solution similar to yours. Often we are talking about “indirect competition” when consumers find entirely different solutions to their problems. For example, when H. Ford first started selling his cars, he had almost no direct competitors in the face of other automakers. However, Ford had to compete with different modes of transportation (horses, bicycles, trains, and walking). These were all alternative ways of solving the problem of moving from one point to another.

Define Your Target Audience

You have to describe in detail the ICP of your customer. Answer: “Everyone” is wrong. It’s like firing a cannon at sparrows. You had to define your target audience at the stage of drawing up a business strategy.

Suppose you have selected some portraits of the people who might be interested in your online tutoring services. These might be students or adults who want to boost their career opportunities. These are two different target audiences, and you have to choose which one you will be targeting in the first place and which one will be a complimentary one.

Prepare Development Plan

All entrepreneurs make plans for how their business will develop if successful. Try not to get carried away while any entrepreneur is happy to dream of expanding their business. Share your plans for the future in a paragraph or two to show investors where you want to go. Refrain from describing long-term goals in detail because now no one can guarantee that they will be implemented. It would be effective if you focused on your current product or service.

How To Start Marketing For Tutoring Business Online

A marketing and sales plan describes how you will bring a product or service to your target markets, how you plan to sell your product to those target markets, what pricing scheme you will use, and what activities and collaborations will be required to be successful. You must clearly define your target markets and outline a portrait of your ideal customers before writing your marketing plan. Your marketing plan will be useless without a clear idea of ​​who you will be selling your product to.


Branding And Positioning

The first part of your marketing plan is positioning your company and service. Positioning is how you will present your company to potential clients. For example, are you offering a budget solution, or are you a premium brand? Are you offering a product that none of your competitors have?

Analyze the current market situation and answer the following questions before starting to develop a positioning strategy:

  • Do you offer any benefits or advantages that your competitors do not have? If so, which ones?
  • What are the primary needs of your customers?
  • How are your competitors positioning themselves?
  • How do you plan to stand out from the competition? Why should buyers choose your product?
  • What place do you assign to your company in the current competitive environment?

You can start thinking about your positioning strategy after answering these questions. Your positioning strategy doesn’t have to be voluminous or very detailed. You need to explain where your company is positioned in a competitive market and how your value proposition differs from what your competitors offer customers.

Price Formation

You can begin to consider pricing issues when deciding on a positioning strategy. Your positioning strategy will be the main factor in pricing your services in most cases. As a medium, the price can tell customers how you are positioning your product. Clients will instantly know it for the price if you are offering a premium service.

The pricing process is more akin to art than science. However, it obeys some universal rules:


  • Coverage of costs. There are exceptions to this rule, but you have to charge more for the product than you had to spend to produce it in most cases.
  • You have to determine primary and secondary sources of income. The base price may not be your primary source of income. You might sell a product at cost (or even cheaper) but charge a lot more for further contract service.
  • Compliance with the market situation. Your prices should match the demand and expectations of potential customers. You may not find buyers for your product if you set a price too high, and if your price is too low, your offer risks being underestimated.

Approaches to Price Formation

  • Cost-plus. You can form prices based on several factors. The cost-plus approach means that you determine the level of your costs and set a price that exceeds that level. This approach is popular in manufacturing, where upfront cost recovery is critical to a company’s success.
  • Market pricing. A different view of the competitive environment and pricing is based on market expectations. Depending on how you position your product, you can work in a particular market’s high or low price segment.
  • Value pricing. Using this approach, you determine the price based on how much value you offer your customers. You provide tutoring services for busy people who don’t have time to do it. If you save them 1 hour per week and their hours of work cost $50, you can estimate your services at $30 per hour.

Promotion

Having dealt with positioning and pricing, you can move on to a promotion strategy. The promotion strategy describes how you are going to interact with your potential and existing customers. It would help if you determined the cost of promotion and the volume of sales that it can generate simultaneously. Maintaining ineffective promotion strategies becomes highly unprofitable in the long term.

Advertising

Your business plan should describe what types of advertising you are going to spend your budget on. Are you planning to run ads on the Internet or traditional media platforms? Particular attention to your advertising strategy should be paid to assessing the effectiveness of your advertising.

PR

Media coverage of your product is a great way to reach your target audience. Solid media coverage of your product or service will provide you with the broad audience reach you need to grow your business. Be sure to devote a few notes to the topic if public relations is part of your promotion strategy.

Content Marketing

One of the famous promotion strategies is content marketing. It should be understood that your goal here is not to tell the target market about your products or services. The primary purpose of this kind of marketing is to give potential clients exciting and helpful information on topics of interest.

Social Media

SMM is a vital part of selling online today. It does not mean at all that you need to create accounts on all social platforms. You need to be present on those online sites that are popular among your target audience. An increasing number of buyers begin their acquaintance with companies precisely from social networks. Moreover, social media can easily assess how quickly and competently companies are responding to the requests of their potential customers.


Partnership

You can establish cooperation with other companies to improve the effectiveness of promoting your services. Thanks to such a partnership, you can gain access to the target market, and your partner will have the opportunity to offer their customers a new product or service. Be sure to pay attention to this aspect in your business plan if you have already established cooperation with several partners.

How to Find Clients For Your Tutoring Business

Create Free Content

Free articles, videos, podcasts, newsletters, meetings, and other events showcase your expertise. They start the dating process, from which the love and trust of customers begins. Free products add value to paid courses and help sell them.

Top customers will appreciate the effort you put into creating accessible content. Keep it inspiring and practical, and include strategies and tactics that competitors aren’t willing to share for free. Do so even if you have to hire freelancers to produce valuable content. Because high-quality content will attract top customers and not just anyone

Make Your Price Worth It

Price is a sensitive issue for many entrepreneurs. It depends not so much on the purchasing power of customers as on the mentality of the seller. A top customer will leave if they see a low price. They will understand that you do not value your services enough and notice your limiting beliefs, which will scare them away.

Don’t worry about who can pay how much. The price should be based on the value you give. Take training and get additional education if you feel that you do not know about a particular issue. Do not charge a low price in any case. The best option is to create products in different price ranges, but they must be expensive. It is what top clients need.


Get a Sales Manager And Ask Clients For Reviews

One of the benefits of a modern business is hiring a salesperson who works for a commission. You can create a sales funnel that will lead customers to your sales force (or a salesperson) who will close the deal. Engaging a top customer and getting money from him are different skills.

Don’t hold on to customers who are late payments, begging for discounts, and not completing assignments. There are over three billion Internet users globally and many opportunities to attract top customers who will appreciate your product and help grow your business.

Some can collect and post text reviews on the site. They are effective, but video evidence is more powerful. Top clients prefer to see and hear real people in person. Give them that opportunity, and you can close five to six-figure deals.

Equipment Needed For Students and a Tutor

Teachers must be certified appropriately so that you have a 100% guarantee that your students will learn in a way that enhances their learning, depending on the course they choose. It would help if you considered installing an online management system in your virtual tutoring.

The system should be able to monitor the progress of each of your students closely. It will let you know if the teachers you have hired are genuinely effective in teaching your students. The system must also create complex and data-driven decisions that help you determine what you can do to make learning easier for your students.


Tutors

  • ​​Stable Internet connection: incoming connection should not be less than 2 Mbps, outgoing – not less than 1 Mbps. The lesson can run smoothly using a Wi-Fi connection, but we recommend using a cable Internet connection;
  • Teachers usually use software for tutoring;
  • Headphones and microphone;
  • Webcam.

Students

Students also need special software, but they can access it online. For example, in Preply, students enter their accounts at the website. They also need:

  • Stable internet connection;
  • Personal computer with mic and camera.

It is enough to have daily lessons with online tutors and do all the homework.

Bonus Tip: How to Sell Developed Online Tutoring Business

  • The private sale of a home is an opportunity for both buyer and seller to negotiate their price. It can be one way buyers save money by avoiding brokerage fees when buying from individuals directly instead of having them take care of the whole process. Rentals or commercial properties use someone who knows what they’re doing on-site.
  • Using a broker. An online business broker is a great way to help people buy and sell their businesses, especially if you’re looking for someone else’s consent. The biggest reason so many choose this route rather than going through all of that hassle themselves? It just takes one phone call with the relevant information once they have bought your services! Private sales can take much more time, but there will only need to be one party involved when it comes down to negotiations over price points, etc.

Summary

There are some things to consider if you are considering starting an online tutoring business. One is competition. Many people are opening up their trades in this industry, and it can be hard to stand out from the rest of them. 

However, if you follow our advice on becoming successful in your new venture, you will have a much better chance of finding success! We hope you learned more about what it takes to open your own internet-based teaching company successfully while also getting an idea of what steps may need improvement before taking off with its full force into the world. Luckily, we’ve helped give someone who would like to get started with an online tutoring program just one less thing.

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