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How to Create a Profitable Tutoring Business Plan

One of the reasons people fail in business is because they don’t follow a profitable plan. Your tutoring business will experience the same result if you do not have a solid road map.

Let’s create a profitable tutoring business plan so that you can start generating cash flow. This requires two distinct steps: 1) creating a profitable plan, and 2) following that plan.

Table of Contents

Why it Must be Quick

You need to generate your business plan quickly so you can begin making profits quickly. After all, that is the goal of your business venture, right? To make a profit.

You will not benefit from creating a tutoring business plan over the next three months or years. If it takes that long to research your market and the opportunity you will lose interest and never get started. You need a business plan now!

Why it Must be Profitable

By definition, a business must make profits for its owners. That is the goal of all businesses. Otherwise, all you have is a hobby. This is as true in basic terms as it is in legal terms for defining a business by the IRAS.

By following the steps in this article you will be taking the time to ensure that your balance sheet stays positive and you have a much higher chance of getting the financial reward that you desire.

Of course, not all rewards are monetary.

You are motivated by two things: Challenge and reward. You may not think of it in these terms, but it is true. What is the challenge you are facing right now? Why do you want to start a tutoring business? Are you struggling to pay your bills? Have you lost a job? Are you a stay-at-home-mum that wants to add to the family income? Do you want to go on vacation this year?

These challenges cause us to look for solutions.

Finding a solution is often what allows us to obtain the reward. Maybe your reward is paying the grocery bills or paying an extra payment each month on your mortgage. The confidence you receive from running a small business might itself be enough of a reward for you. Or you may have the goal to earn enough for a trip to Paris, New Zealand, or to send your children to college.

Basics of a Normal Business Plan Process

The best framework I have used for generating a tutoring business plan is to start with the basic goals of typical business plans and adapt them to the specifics of tutoring.

You can do this quite simply by following the steps in this article.

A simple way to organize the information about your business is to define the following categories:

  • Executive summary
  • Information about the company
  • The vision of the company
  • Company’s mission
  • Goals
  • Business model
  • Strategies and action plans

Adapting them to your tutoring business will take a little work. This article will help you take the five basic categories above and focus like a laser on specific, detailed questions about how you will operate your tutoring business.

What is your company name?

Deciding how to name your business is an important decision. I recommend you at least think about choosing something that is very descriptive of the tutoring services that you offer. This will help in your advertising efforts, especially when you begin using the power of the internet to market your business online.

Do not limit yourself to obscure mascots or references, and think about how geographical boundaries can limit you as well. This limits your opportunities to add other services later. (Think about the possibility of adding other locations, online tutoring services, etc.)

It is certainly OK to use a less descriptive name. But regardless of what you choose, it is well worth taking the time to think about this in the beginning and match your name with your goals. Of course, you can always change your name later as needed as well. But that can be a bit of a daunting task. My best advice is to take the time right from the start to do it right.

How will your business be organized?

This includes deciding whether you will operate as a Sole Proprietor, Private Limited Company, or other business entity, as well as other organization options.

Will you be the only one working on your business? Will you have a partner? A team?

What will be the source of funding for your tutoring business? Your savings, small business loan, or a credit card?

What is your method of record keeping and accounting? How will you handle taxes? Start with a system that works for you. Do not worry about how other people do it.

Vision and Mission of the Business

Companies will spend thousands of dollars and hours of meetings trying to come up with the perfect vision and mission statements for their business. They make it way more difficult than it is.

To determine the vision and mission for your company you must ask yourself just one question: How does my business put value in people’s lives?

People will exchange money for something of value. You may be the best tutor in your county, but if you cannot show someone why your products or services are valuable to them you will never sell your services.

Your company’s mission is to provide products and services that provide that value to your students. Of course, depending on your skills, talents, and resources, those products and services will vary. But the focus is always the same: provide value for people’s lives.

Your Goals

No business plan is complete without setting some goals for your business. You need to start with a larger overall goal, but then focus down until you get to small manageable chunks. This becomes your business startup checklist.

Set goals for:

  1. 3 years from now
  2. 1 year from now
  3. The next 90 days

First, define your goal for how you want your business to look 3 years from now. How many students will you have? What will your advertising be? Will you have any other tutors working with you or for you? How much income will you make? Give your grand vision for everything you hope your business will be in 3 years.

Now do the same for 1 year. One year is not very long; it goes fast. Be realistic here, but at the same time set your sights high.

Finally, what is your goal for the next 90 days? It is the most critical goal-setting stage. The decisions you make and actions taken in this short time will greatly impact the long-term success of your business.

Make your goals specific and measurable

For example, do not state “In 90 days I want to have new students.” Instead say, “In 90 days, I will have 10 new students.”

Writing specific and measurable goals will help you track your progress.

Make your goals sequential

Let’s say your goal is to start by offering piano lessons and then have a recital for your students. This is fairly vague.

You might be better off setting your goals in this manner:

  1. Obtain 10 new beginning piano students by the end of September.
  2. Offer advanced courses to retain students starting at the beginning of the second school semester.
  3. Expand to 20 piano students by the start of the 2nd semester (beginners and advanced).
  4. Put on a Spring piano recital program for beginners and advanced students.

Notice how these step-by-step goals seem to flow together quite easily. Otherwise, the jump from piano lessons to recital can seem quite difficult.

As a reminder, make sure your 90-day goals are “just right”: not too ambitious, and not too easy. We’re talking Goldilocks style here.

Challenge yourself, set your goals high, and take action.

Strategies and Action plans

The business strategies and action plans you will use to start and succeed in your business will be determined by the following detailed business questions. These questions will help you fine-tune your market, define your student, and provide solutions that are valuable to your students.

Market analysis

  1. What is your target market?
  2. Who are your students? What problems do they want to solve?
  3. Where and what are they buying already? Where are they buying it? Where are they getting tutored already? Who are your competitors?
  4. What resources do they already read, listen to, and use? Do they go online, use social media or look in books and magazines?
  5. What keywords do they search for when they go online?
  6. Are there any changes in these questions occurring right now? Are there any changing trends?

Your tutoring products and services

Here are some different questions to help you think about the way your business offers services and products:

If you only offer individual tutoring you are not a business. You are a service provider this close to losing all of your income streams (i.e. your only income stream).

  1. Think about ways you can offer more services or different products.
  2. Can you tutor individuals and small groups?
  3. Tutor for daycares (especially foreign language and music)? School or college students?
  4. Tutor for adults or even local businesses? Example: Tutoring in language for management of a company with a lot of foreign language speakers as employees, or training workers in computer applications.
  5. Offer different locations for personal tutoring such as at the student’s home, library, or study hall at school.
  6. Offer online tutoring or solution assistance.
  7. Offer other extras to your clients like Math Parties (play wild and crazy games that have some math connection) or the Spanish Dinner Club ( for example: once a month, cook an authentic Latin American dinner focusing on a different part of the Spanish-speaking world). Invite parents and family. Label utensils and food with appropriate names and let everyone in on the fun.
  8. What are the prices behind these products, and why? Do you know what the going rate is? Why is yours higher or lower?
  9. How can you raise your prices by raising the perceived value of your products?
  10. What makes you different from the competition? (obviously, focus on how your strengths are different here)
  11. What will be your tutoring brand/image?
  12. What schedule will you tutor on? How is this of value to single parents, people who work night shifts, etc?

Advertising and Building Your List

The secret weapon I use for attracting and retaining students is a very specific system for communicating with my students. This allows me to keep my students well informed and shows we are always making progress.

Successful business owners understand that money is in the list. It is much easier to sell your services to a customer that is aware of your products and services than to someone who is not.

Communication is the most critical marketing and customer retention strategy that you can use to build your business.

Imagine if you always had a steady stream of students and hardly ever had to advertise to get more. High numbers of repeat customers are a dream scenario for your business or any business.

To build your communication system, think about these important points.

  1. How will you build and communicate with your list of customers and potential customers?
  2. Your lists are the lifeblood of your business. There are 3 types of lists
    1. Potential clients (leads who might need what you offer)
    2. Current clients (who have found you provide services they need)
    3. Former clients (who you want to come back as soon as they have a need you can fill—provided you met their need last time)
  3. If you own a website, it can be subscribers to your e-mail courses, RSS feeds, blogs, podcasts, or even basic visitors to your site.
  4. It can be a spreadsheet full of names and addresses.
  5. How do you collect names and phone numbers, etc.?
  6. How often do you communicate with them?
  7. How is the content that you send to them created?

The biggest waste of time in your tutoring business will be going through the work of getting a new client (or even a client lead) and failing to continue communicating with them in some meaningful way.

A system for communicating with your students and leads will be the difference maker and will make you stand out from the competition.

Your Basic Marketing Plan in 7 Sentences

I came across a terrific book the other day and knew I had to add this great tip to this report. Jay Conrad Levinson, the author of the acclaimed “Guerrilla Marketing” series, writes in his book, “Guerrilla Marketing For Free” that you should come up with a basic marketing plan before you begin advertising and marketing your business.

Here is a summary of Jay Conrad Levinson’s approach to creating and refining a marketing plan in seven simple sentences. (I highly recommend any of Levinson’s books—just two or three ideas could make all the difference for your business)

Write one sentence to answer each of the following:

  1. Describe the purpose of your marketing.
  2. Emphasize the largest benefit that will entice people to choose your tutoring services.
  3. Describe your target audience. (remember, you have two – parents and students!)
  4. Describe all of the marketing tactics you will use (hopefully, this is a long sentence!)
  5. Identify your niche—or what you stand for. Is it quality, success rates, average grade improvement, online tutoring, advanced courses, or others?
  6. State your identity—your company personality and who you are. (remember, your business should be a reflection of your personality, talents, and gifts.
  7. Estimate the marketing budget for the year. Give a startup monthly amount and then a percentage of monthly revenue. (how will you decide how much to spend?)

Assets

One of the biggest benefits of starting a tutoring business is the low start-up costs; there are very few resources needed compared to other small business ventures.

You can start and grow your tutoring business without spending a lot of money.

That being said, every business has some expenses. Here is a list of the basic materials you will find helpful in starting your business. I am sure you can work with a lot less and could just as easily come up with more.

  1. A computer and internet access – not necessarily required, but extremely helpful these days, and most households have them (or at least access to one)
  2. Advertising materials ideas:
    1. Business cards
    2. Flyers
    3. Website
    4. Social media profiles
  3. Basic office supplies

Develop Your Action Plan

Once you are satisfied with your overall business plan strategy it is time to develop your Action Plan.

An action plan is a set of tasks and strategies you will implement in a specific timeframe to reach your immediate and future business goals.

I have two recommendations when creating your action plan.

  1. Make a plan for your first month and put special emphasis on the first week.
  2. Break tasks into smaller, easy-to-complete steps.

Here is the logic behind this. To start, if you make a plan for more than 30 days you will most likely get behind, procrastinate, or even worse, get frustrated and forget the tasks altogether. It is more important to give yourself some goals to complete fast to help you focus and be successful.

You will always need to set aside some time for strategic planning.

Initially, I recommend every 30 days. After you are successful for a while and have your business up and running, you will be able to move strategic planning to every 90 days. I do not recommend any longer periods than that. You may find you work better planning every 30 days. Do what works best for you.

Secondly, by focusing on the first week you can make sure you get off to a great start. You will have boundless energy in the first weeks of a new business venture. Make sure to challenge yourself and set yourself a set of goals that are all vital to the growth of your business.

In other words, do not decide you will spend an afternoon choosing the letterhead for your stationery. That is not critical.

Putting it All Together

After thinking about each of these areas of the business plan take action!

Write out your plan. There is no wrong answer to start. “Let your gut guide you” so to speak.

I then recommend you “sit on it” for another day or so. Keep thinking about your business venture and how you will accomplish the tasks in your tutoring business plan.

It might be a good time to share your plan with someone else and get their ideas; the classic “two heads are better than one” strategy.

The person you choose is very important here. Do not choose someone who is negative and always has the assumption that things will not work out. Instead, find a positive goal-setting individual (maybe another successful small business owner) and get their input. This is called networking and can be a tremendous source of inspiration and valuable ideas as you are building your business.

So what are you waiting for? Get started on your business plan and take the first step to growing your business.