How to Start an Online Tutoring Business and Find Customers: A Complete Guide
Ever since the emergence of COVID-19, the online tutoring market growth has only accelerated massively.
The US private tutoring market is now expected to grow by a whopping $7.37 billion by 2023.
This has created immense new opportunities for tutors. Practically, there has never been a better time to start an online tutoring business.
If you are a tutor looking to switch to online tutoring, or someone who is planning to start a tutoring business online from scratch, start with this blog series!
This series is divided into three different sections, each of which talks about one important aspect of starting your online tutoring business:
- Setting up your online tutoring business
This is part 1 of the series and it talks about how to start tutoring online.
If you are interested in part 2 or part 3 of the series, just leave your email address below, and we’ll send them straight to your inbox!
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In this blog, we will cover everything that you need to think about before you actually start tutoring online. Consider this step 1 in your ‘How to start an online tutoring business’ crash course!
- Choose your tutoring niche
- Understand what makes your audience tick
- Analyze your competition and your USP
- Determine your payment model
- Finalize the tools that you’ll need – Put online tutoring business on autopilot
You can click on any section to jump to it directly.
1) Choose your tutoring niche
A. Why is choosing a niche important?
To make your business stand out in a competitive industry like online teaching, you need to know your niche before you start your online tutoring company.
Once you know which niche you want to target, it will help you set a direction for everything from designing the right website for your target audience, to getting more relevant leads, or even shortlisting online directories to list your business in.
It also helps you avoid directly competing with well-established brands in the market and maximize profits for your business in the initial stages.
A few examples of niches in the tutoring industry:
- English as a second language (ESL)
- SATs, GRE, GMAT
- Basic & elementary math
- Specialist tutor, qualified to teach children or students with dyslexia and other SpLD
B. How to choose a niche for your online tutoring business?
One advantage of online tutoring over in-person tutoring is the fact that your audience is no more limited to the local community. You can tutor any student in any part of the world – which means you have a lot of niches to explore.
While choosing a niche for your online tutoring business, select the one where you have the highest chance of success.
This depends on two factors:
- Your area of specialization/interest
- The profit potential or the supply/demand ratio for a niche
Now, you likely know your area of interest and expertise, but to find which segments have the most demand, here are a few things you can do:
- Understand the competitive landscape in your area. Research the kind of services that other tutoring companies offer, identify the one which is the most popular, and the ones that are offered by a handful of businesses.
- Analyze the ticket price or cost for different services. Initially, you might want to focus on quality instead of quantity. Find a customer segment that has relatively higher-paid potential.
- Look for the demographics that have potential. Take a pulse on the market demand and tutoring agencies fulfilling these demands using online directories, school enrollment, and surveys in various communities.
2) Understand what makes your audience tick
One of the ways you can become a successful tutor (online or otherwise) is to cultivate a strong interest in and understanding of some of the developmental issues faced by your students and parents.
And not just that, you need to understand their pain points, idea of success, and who in their opinions is a perfect tutor as well.
Find out why they are not happy with some of the existing tutoring businesses, and what they are actually seeking out while choosing an online tutor. Here are a few things to get you started on what your customers want:
A. What do your customers value?
You might be surprised by what parents really want in a tutoring company. It goes beyond the traditional belief that all that is required from tutors is better results for kids.
The parents of today are smart about choosing the right tutor for their kids. They are not hesitant about asking for your credentials, and they want a constant tab on their kids’ progress to ensure they are getting the worth of the money they are spending.
Here are a few things that matter to your clients as they choose your services:
i) Professional tutoring
Parents and students today don’t expect tutors to be just subject experts. They also look for skills like the ability to connect in the classroom, communicate well with students in 1:1 sessions, and create thoughtful lesson plans.
ii) Personalized attention
A major reason why parents seek supplementary education from tutors is due to the fact that classroom teaching is often not enough for their kids. Some kids require that additional attention to develop subject understanding and as their tutors, parents expect a completely personalized lesson plan and teaching method for their kids.
iii) Ease of scheduling
Online tutoring is still a novel concept for many parents and students. Hence, they are acquainted with the process as much as they are to physical tutoring. But one thing that stays common among both models is the fact that parents and students would still need to schedule time with tutors. A fast and easy online scheduling process reduces the chances of clients dropping out mid-booking.
iv) Regular feedback
What really gives both parents and students a sense of direction is constant monitoring and discussion about the student’s progress. Your clients are no longer okay with the final results not being good. They want you to analyze the frequency and let them know if something can be improved in their kid’s results so that they can work with you to make it happen.
v) Top support
Whether it’s a lost payment receipt or session rescheduling, clients can seek support for anything at any time of the day. And being able to solve their problem fast definitely earns you brownie points for their experience with your business.
Additionally, there are different things that might be important for your target audience based on demographics, niche, special needs, etc. For example: In a work-from-home scenario, parents of primary school kids might need tutoring especially during work hours so that it can double up as a babysitting measure.
Once you know all these things, you can move forward and design a sales pitch, pricing model, and offerings in a way that will appeal to them. It will also help you enhance the value of your offer and help you ensure that you do not undersell your tutoring courses.
3) Analyze the competition and define your USP
That sounds like a lot of marketing speak, but it really isn’t.
It’s the basic fundamental that business owners everywhere define their practice and make their important business decisions according to it. – Your Unique Selling Proposition or USP.
It’s the differentiating factor for your business that makes you stand out from the competition. It’s the answer to the questions clients often ask:
“Why should I choose your tutoring business over others?”
What can be your USPs?
Your USP can be based on anything ranging from your business’s offerings to your teaching style, or even your service prices – anything that communicates that you do something differently from your competitors.
Think of it like this, if you are the only tutor in a city that can help students in STEM verticals, that’s your USP. Or maybe you teach using fun games and connect personally with students, then that’s your USP.
Once you define your USP, it can be used in your taglines, sales pitches, meetings with parents, or even your websites and brochures.
How to find out your USPs?
- Figure out what your direct competitors are already offering. Find gaps in the system or existing practices that you can give a more creative spin to. For example: For most established tutoring businesses, the number of students is high and hence they are not able to allocate personalized resources to these high-paying customers. You can take advantage of this and play on exclusivity and hyper-personalization of services for these segments.
- Understand your unique expertise. Is there something that you can add to the existing system or processes? Evolve the existing process and make it easier, more fun, or faster for your clients.
Once you do this, you should be able to clearly outline the differentiating factors as you understood from your research and draft a tagline for your business.
A few examples of how USPs of tutoring businesses look:
“Making learning fun”
“Catering to special learning needs for special children”
“Fast-tracking results for high-achievers”
4) Determine your payment model
The tutoring industry has a wide range of price points for similar services, which might leave you all the more confused about how to charge for your online tutoring business.
Here are a few pricing models you can consider:
Pricing models for tutoring business:
- Fixed hourly fee
- Price per lesson
- Fixed fee packages for a specific duration (like a month), or a program (like SAT coaching)
- Sliding scale for students who need help with specific topics
- Custom fee for large groups or certain segments
How to choose your pricing model?
Factors to consider when defining your baseline pricing:
- Your location: Understand the local demographics to have a competitive advantage over large tutoring companies that cater to global markets. What is the paying capacity of your average audience? What is their willingness to pay for upgrades?
- Your subject expertise and qualification: If you are catering to higher grade levels or advanced tutoring courses, you can charge more for your sessions
- Competitor price point: Find tutors similar to your experience in your chosen niche using online directories and analyze what they are charging for their services. Initially, you can choose to begin with competitive pricing to beat market standards and then slowly increase your prices.
Additional variables to keep in mind while defining your pricing:
- Overhead expenses like educational material, costs of tools, and setup
- Marketing costs
- Demand in your area
5) Finalize the tools you’ll need
To truly succeed at your online teaching business, you need to put it on autopilot.
Once you cut out all the admin work and automate your processes, only then you’ll be able to spend enough time doing what makes you money – tutoring!
Since you are planning to start an online tutoring service, you don’t have to necessarily think about a physical office, or furniture right now, but that doesn’t mean that you don’t have to set up infrastructure at all.
For online tutors, the infrastructure is essentially the technology that you use to facilitate your sessions. Here are some basic tools you’ll need:
- Video conferencing platform: The videoconferencing platform that you use should be reliable, comply with legal requirements for tutoring and data security. We recommend that you choose one of the popular platforms like Zoom, Google Meetings, etc. to deliver smooth online tutoring sessions.
- Tutor scheduling software: Most online tutoring sessions work hand in hand with online scheduling. With many students to be tutored, you need to manage your time during the day efficiently. While you might have time slots fixed for your lessons, managing the booking and filling of these slots can be a burden for you. An online scheduling tool can make it easier for you to take bookings for these slots. It will also make the booking process easier and more convenient for the students and their parents as well.
- Client database system: It’s very important for your online tutoring business to have a database that contains all details of parents and students that book with you. Your database should contain details like appointment history, past payments, session notes, etc. This will help you target specific clients, deliver better sessions, and provide comprehensive assessment reports to parents.
- Email service: Emails will help you in transactional communication like booking notifications, reminders, etc., and also in marketing emails like sending discounts, offers, e-gift cards to your clients.
- Business analytics: A comprehensive reporting system will help you monitor key performance indicators to measure business growth like appointments booked, tutor productivity, payments, etc.
- Payments processing system: Having a good and reliable payment processing system will ensure that you never lose money. Use a payment processing system that customers can trust, and has features like prepayment support, different payment options, discounts, payment with gift cards, etc.
That might look like a lot of new tools to play around with and finalize, but it doesn’t have to be that way. Given the increasing popularity of online tutoring in recent years, there have been many tools in the market that have a combination of these features.
In fact, Appointy (tutor scheduling software) lets you do all of this with just one single tool!
Here’s how it works:
- Step 1: You can just set up a schedule for your tutors, and share your booking link on the website/social media/ads.
- Step 2: Parents or students can then self-schedule their sessions with you at their convenience.
- Step 3: Every time someone new books an appointment, they are added to your client database automatically. All their booking history is saved automatically in this cloud database. You can also manually add further information to this.
- Step 4: Clients can also pay for their appointments online while booking their appointments using popular payment methods like Stripe, Square, Paypal, etc.
- Step 5: Every time an appointment is scheduled with Appointy, a video conferencing meeting in Zoom is automatically created and its details are sent to all participants.
- Step 6: Automated booking notifications and email reminders are sent to parents so that students never miss their appointments.
That sounds pretty much on autopilot, doesn’t it?
That’s because Appointy’s tutor management software is designed to keep in mind all of your business’s needs.
In fact, during the past few months, we have onboarded hundreds of tutors and tutoring businesses to Appointy to help them switch to or set up online tutoring businesses. (This includes big names like Mathnasium, Kumon, etc.).
Look what they have to say about Appointy:
Ready to start online tutoring with Appointy?
Being an easy-to-use, cloud-based online tutor scheduling software, Appointy can help you simplify online tutor scheduling, get a steady inflow of clients, and manage your business efficiently.
We are also providing 24×7 priority assistance to tutoring businesses in order to get them started in less than 15 minutes.
Setting up an online tutoring business requires you to really think about what you are going to sell and how you are going to do this.
These steps might look like a lot to take in, but trust us, once you get your basics right, you can then focus on growing your business. Managing it going forward will be a piece of cake.
Whether you are an in-person tutor or you’re going to start tutoring for the first time, online tutoring is a great way to both expand your existing business and get a headstart in this industry. With a growing comfort with technology, students today are preferring online learning, and hence this trend will continue to grow.
So get started now!
We at Appointy, help business owners grow and run their businesses with our online scheduling software. This blog was a part of our ‘Manage your Business’ category, where we provide expert tips, resources, or simply talk about the challenges that small and medium businesses face every day.
If you have any thoughts on this blog, or would like to chat about your business struggles and achievements, let us know in the comments below.
We love a good talk!