How to start a tutoring business

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Did you know that your passion for education can help you earn extra income? Tutoring is a rewarding and worthwhile venture for those who love to teach. This guide will take you through all the steps of setting up your very own tutoring business, including all the equipment and legal admin you'll need to get sorted.

What is a tutoring business?

A tutoring business supports students academically. A tutor is knowledgeable or has defined expertise in a particular subject or set of subjects. They do not have to be teachers, as many tutors are undergraduate students or professionals in other industries. They assist students who struggle in their school subjects or want to improve their results.

How to start a tutoring business

Here's what you need to do to get your tutoring business up and running:

  1. Write a business plan. Work on a robust business plan that indicates the competitive market, the estimated costs, the pricing for your services and your potential business location.
  2. Choose a business name and logo. Creating a name and logo is essential to your business's marketing. A business name should be easy to remember and memorable for your clients. You will also need to register your business name with the Australian Securities and Investment Commission (ASIC). You can engage the services of a graphic designer to create a logo promoting your business, or use tools like Canva to create your own.
  3. Fulfil your legal requirements. Before opening up shop, register your business, decide on a business structure and get the necessary legal documents sorted (we cover these steps in more detail below).
  4. Consider loan options. Unless you're a home-based or mobile tutor, you might need to invest in a business location. Additionally, your tutoring will require some equipment similar to that of a classroom. A loan could help with these expenses.
  5. Set up your classroom. Make a list of all the equipment, and computer hardware and software you will need to conduct tutoring lessons.
  6. Market your business. Being smart with marketing will help your business thrive. Consider advertisements, list your services in forums and online job sites, and reach out to your friends and family.

woman tutoring online

Skills needed to start a tutoring business

A good tutor improves a student's knowledge and teaches them how to study and prepare for examinations effectively. Hence, a tutor should be able to listen, as well as communicate strategies and encouragement to their students. Often, a student will not grasp a certain concept on the first or second try. This requires patience and a creative streak to adapt concepts to a student's learning style.

Tutors should also teach students time management techniques and help develop a revision plan and exam tactics. A tutor will facilitate independent and critical thinking, which students can use to understand and utilise their individual learning styles. Tutors generally do not keep the standard 9 to 5 working hours. Many tutors are hired to work with students after school hours, which might mean late-night tutoring sessions or weekends.

Courses or qualifications to start a tutoring business

There is no required qualification to become a tutor. However, experienced tutors are highly sought after. This doesn't necessarily mean you should have a teaching degree, but you should at least have a Senior Secondary Certificate of Education (SSCE) from completing high school.

A tutor should also be familiar with teaching techniques and know how to pass on knowledge to a wide range of students. Usually, tutors are hired to teach math, English and science from primary school through to high school.

If you are looking to get a formal degree, consider a Bachelor of Educational Studies, which takes three years to complete when studying full-time. Another option is to apply for certification from the Australian Tutoring Association or Accredited Tutor.

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    Equipment and software needed to start a tutoring business

    If you intend to start a home-based tutoring business, you will need to invest in bulk supplies of pens, pencils, markers, rulers, papers, notebooks and folders. You will need some workbooks and notebooks for record-keeping.

    Other equipment to invest in is a reliable computer set-up with a good webcam and microphone, and a strong Internet connection. You can choose between purchasing a whiteboard, or using a tablet or digital drawing pad and stylus as a virtual whiteboard.

    On top of these, you should consider downloading or investing in some tutoring software such as:

    Video calling software

    • Google Hangouts
    • Skype
    • Zoom

    Whiteboard software

    • AWW
    • Drawp for School
    • Educreations

    Document sharing software

    • Google Docs
    • OneDrive
    • Dropbox

    Online tutoring software

    • TutorBird
    • Acuity Scheduling
    • LearnCube

    Loan options for a tutoring business

    Once you have decided on a tutoring niche and your business location, the next step is to calculate your starting costs. This will help you determine how much starting capital you will need, and if you'll need to consider a loan. If you're open to joining a franchise, it can sometimes be cheaper to join a tutoring franchise that provides you with ongoing support and branding, with the initial investment as low as $1,000. However, if you want to control your business, you can choose to opt for a small business loan or a personal loan.

    $
    Name Product Interest Rate (p.a.) Comparison Rate (p.a.) Min Loan Amount Loan Term Application Fee Monthly Service Fee Monthly Repayment
    Plenti Personal Loan

    From 6.39% (fixed)
    6.39%
    $5,000
    3 to 7 years
    $0 to $649
    $0
    You'll receive a fixed rate between 6.39% p.a. and 17.89% p.a. based on your risk profile.
    A flexible loan with amounts from $5,000 and terms starting from 3 years. Interest and comparison rates calculated for a loan term of 5 years.
    Alex Bank Personal Loan

    From 4.99% (fixed)
    4.99%
    $2,100
    6 months to 5 years
    $0 (Waived $295 establishment fee)
    $0
    You'll receive a fixed interest rate from 4.99% p.a. to 19.99% p.a. based on your risk profile
    Borrow between $2,100 and $30,000 from 6 months to 5 years. Note: The $295 establishment fee will be waived for loan applications submitted by 3 November 2021.
    OurMoneyMarket Personal Loan

    From 5.45% (fixed)
    6.07%
    $2,001
    1 to 7 years
    From $250
    $0
    You'll receive a fixed rate from 5.45% p.a. to 20.99% p.a. based on your risk profile.
    A personalised loan from $2,001 to $75,000 that varies based on your credit history and financial situation.

    ⭐ Finder Exclusive: Apply before 31 October 2021 to secure a discounted rate of 5.45% p.a. (comparison rate: 6.07% p.a.) for the first 12 months on loans over $35,000. T&Cs apply.
    NOW Finance No Fee Unsecured Personal Loan

    From 5.95% (fixed)
    5.95%
    $5,000
    18 months to 7 years
    No Establishment Fee
    $0
    You'll receive a fixed rate between 5.95% p.a. and 17.95% p.a. based on your risk profile
    Borrow from $5,000 to $7,999 with loan terms between 18 months and 3 years or borrow $8,000 to $50,000 with loan terms between 18 months and 7 years.

    ⭐ Finder Exclusive: Apply and settle a NOW Finance No Fee Unsecured Personal Loan for home improvement by 31 Dec for a chance to win a $2,000 Bunnings gift card.
    Harmoney Unsecured Personal Loan

    From 5.35% (fixed)
    6.14%
    $2,000
    3 to 5 years
    $575 ($275 for loans of below $5,000)
    $0
    You'll receive a fixed rate between 5.35% p.a. and 19.09% p.a. based on your risk profile.
    Apply for a loan up to $50,000 and repay your loan over 3 or 5 years terms.
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      How to structure a tutoring business

      There are three general types of business structures to consider when starting a business in Australia.

      If you want to start your tutoring business as an individual, you can register as a Sole Trader. You will have full control of the business and its assets.

      If you're looking to start the tutoring business with a friend or a partner, you might consider a Partnership business as it allows shared decision making and financial liabilities. A Partnership can include up to 20 people.

      Setting up as a Company enables you to expand your business and contains a possible tax deduction. Though a Company entails more paperwork and up-front costs, it limits your personal liability.

      • Working With Children Check. It is vital to apply for a Working With Children Check (WWCC), a requirement for anyone working or volunteering in child-related services. This check will either give you a clearance to work with children for five years or bar you from work.
      • Insurance. Investing in insurance can be a good precautionary measure for your business. This insurance should cover potential property damage, accidental injury, erroneous advice the tutor may provide and customer dissatisfaction with your tutoring service. The insurances you should consider are Professional Indemnity Insurance, Public Liability Insurance, Business Insurance, Equipment Insurance and Employer's Liability Insurance.
      • Tutoring Agreement. To ensure your service is adequately compensated, it is important to have a Tutoring Agreement in place. An agreement outlines the relationship between the tutor and the student, and the details of the tutoring services. Additionally, the agreement can include clauses on limitation of liability, intellectual property protection, termination and governing law. Usually, the Tutoring Agreement will require signatures from the student's parents or guardian.
      • Employment Contract. If your tutoring business employs other tutors, you will need to have an Employment Contract outlining the terms of employment, and the employee and employer's obligations.

      Your business website should have a Website Terms of Use outlining your copyright notice, a list of prohibited behaviour, limitations of liability and disclaimers. If you are collecting personal information from your clients, you will also need a Privacy Policy.

      Get access to legal services and documents online

      Name Product What's offered? Starting price to become a member Annual Fee from Free legal documents available?
      Lawpath
      Legal documents and templates, Access to lawyers, Legal guides, Legal advice
      $79 per month
      Essentials: $288, legal advice: $828
      You can view samples for free and you can create your first document for free.
      Choose an annual plan from just $288 and get unlimited revisions to your legal or business documents. Plus, unlock exclusive partner offers.
      Sprintlaw
      Legal documents and templates, Access to lawyers, Legal guides, Legal advice
      $599 (with fixed fee services starting at $99)
      $599
      Some documents are free to download. Get access to all documents with a membership.
      Unlimited lawyer phone consultations, free updates to documents, exclusive partner offers & legal discounts.
      LawDepot
      Legal documents and templates, Legal guides
      $4.99 per month
      $59.88
      Free one week trial available which gives access to hundreds of documents.
      Customise and download legal documents in as little as five minutes. Plus, LawDepot offers peace of mind with two service guarantees.
      Legal123
      Legal documents and templates, Legal guides
      Varies per template
      N/A
      No
      Legal123 offers a range of individual templates or document packages for consultants, app developers, personal trainers and more.
      LegalVision
      Legal documents and templates, Legal guides, Legal advice
      $49 + GST per week
      $2,548 + GST
      No
      Your business can take advantage of unlimited lawyer consultations, fast turnaround times and free legal templates with LegalVision.
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      How to find students for your tutoring business

      There are several marketing tools online to help you produce brochures and posters, search engine optimisation (SEO) marketing and social media content.

      An excellent place to start is reaching out to your local community and posting online advertisements via Facebook and Google Ads. Register your business with Google My Business, which allows people in the vicinity to find your services. Offer study materials, study notes or workbooks for free as a huge bonus.

      You will need to continuously work on increasing your chance to be picked by students and their parents. You could start by providing your services at a discount to friends and family, and then ask them to leave testimonials and reviews on your website.

      Students in need of tutors list jobs on websites such as Tutors Fields, Airtasker or the Bored of Studies online forum. These are hassle-free job sites that put you in touch with people in need of your services.

      How much should I charge my customers?

      Generally, tutors charge an hourly rate. This rate can be anywhere from $15 to $80 an hour. Tutors on the lower scale are usually undergraduate students with less experience. If a tutor is hired for "homework help", then the charge can start at $30. A tutor with years of teaching experience and subject matter experience charges from $150 to $200.

      When setting a price, consider the supply and demand in your area. If there are already many tutors in your subject matter, you will need to adjust your price accordingly. You will also need to consider the costs of travelling if you are required to have private sessions in the student's home and whether the sessions are one-on-one or with a group.

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      Frequently asked questions

      Is online tutoring possible?

      Yes, online tutoring is also an option if a student lives in a remote area or doesn't wish to travel. This can be done with the use of video call software in real-time. Workbooks and evaluations can be done using online document sharing.

      How many hours of tutoring are recommended?

      This depends on the abilities of the student and their goals. Generally, one to four hours a week should help. Some students with learning disabilities may require more. When setting a tutoring schedule, it is crucial to consider the student's need for down-time and socialising after school and on weekends.

      Can a teenager start tutoring?

      In Australia, a teenager between 13 to 15 can do part-time work. There are regulations to ensure that teenagers do not get exploited, so it is crucial to look up your state's rules, as this varies. Parent permission is also required for a teenager to engage in part-time work.

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