How to Start a Private Tutor Business
Do Business the Right Way
If you have a passion for a specific subject and expert knowledge to back it up, then starting a private tutor business might be a great profession for you. In addition to providing academic support for K-12 and college students, private tutors are often hired by businesses and individuals seeking to strengthen their English or other language skills. Whether you’re seeking supplemental income OR wanting to start a full-time company, you can soon own a private tutor business.
Below, we’ve done the legwork for you to provide a free guide to starting a home-based private tutor business today.
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Visit our generic Start A Business Guide.
What Does a Private Tutor Business Do?
A private tutor provides specialized instruction to clients outside a traditional classroom—meeting individually or in small groups. Lessons can be given at the tutor’s home, the client’s home, or another meeting place such as an office, library or coffee shop. Some will also teach online using programs like Skype or Zoom. Aside from teaching, tutors will also prepare lesson plans, study materials, or create handouts on a weekly or monthly basis. In addition, they regularly develop or implement intervention strategies and communicate with students, parents, or teachers regarding learning progress. Private tutors often specialize in a variety of subject areas which may include math, science, history, English, ESL (English as a Second Language), or special needs (e.g. dyslexia or ADHD).
Although most people tend to think of tutoring solely as an additional service provided for school age kids, private tutors are often hired by businesses with diverse clients and/or employees as well as college students. No matter the client or subject, tutors provide focused lessons, innovative teaching, and tailor-made solutions for areas of struggle.
Steps to Starting a Private Tutor Business
Create a Business Plan for Your Private Tutor Business
Before you get started, you’ll need an idea of what resources you’ll need—and how to monetize your business in a practical way. We’ve answered the biggest questions about clients, costs, and profits below.
Who is the target audience?
Your target audience will greatly depend on your specific area of expertise and personal preferences. Do you have experience teaching high school history? Are you more comfortable working with adults, middle school students, or elementary kids? Have you completed a TESL (Teaching English as a Second Language) certification program? Advertise to those who will benefit the most from your skill set. Show parents/guardians how you would make an excellent support system and overall fit for their student. Tell businesses that your background in their industry will be an incredible asset as you strengthen an employee’s language skills.
How do I get clients?
Getting clients for your private tutor business will rely heavily on word of mouth and building a solid network. Here’s a quick list of actions you can take to help grow your business.
- Use social media: Facebook and Twitter have quickly become key ways for parents and individuals to seek private tutors—whether through family/friend recommendations OR by joining specific online groups. Set up a profile that highlights your area of expertise, certifications/degrees, prices, and preferred grade level. Regularly update your platforms with interesting content (i.e.: cool lesson plans, insightful articles, and other learning tools) to keep followers engaged.
- Teach online: As virtual learning continues to grow, connecting with students through Skype and Zoom will allow you to reach an audience beyond your own community. It’s also a great way to teach while socially distancing.
- Sign up with an agency: Sites such as Wyzant and TutorMe are specifically geared towards connecting individuals with private tutors. On your profile, you can list your resume, work schedule, and contact information. Satisfied customers can also leave reviews.
- Advertise locally: Through companies such as Vistaprint or Moo you can create business cards or flyers for local schools, colleges, and businesses.
How does a private tutor business make money?
A private tutor typically accepts work on a case-by-case basis and charges an hourly rate. Although some tutors will charge a flat rate, it’s extremely rare—especially since your work time will often be easy for clients to track.
Clients will typically request specific days and times for meetings such as 30 minutes twice a week or an hour three times a week.
How much money will it take to get started?
The start up costs for a private tutor business are typically very low. If you need to invest in a new computer ($1000 min.), then your initial costs will go up. In addition, you may want to purchase different student workbooks or teaching books to help keep yourself current with best practices. You may also need a reliable vehicle or bus pass if you plan on traveling to student homes, libraries, or other meeting spots.
Although it’s not required, some private tutors will choose to become a certified tutor through organizations such as the National Tutoring Association OR College Reading & Learning Association. You may also want to check with local colleges to see if they offer certification courses.
If you choose to work with kids, you might also consider adding insurance protection, such as Abuse or Molestation Insurance. These types of policies are typically offered separately from professional and commercial general liability coverage and will provide financial assistance if a client were to sue your business. The average cost for $1 million of coverage is $5-10 per child per year.
How much do private tutor businesses make each year?
According to Salary.com, the average private tutor makes $28,270/year. The highest paying states are Alaska, California, New York, and Washington—averaging between $30,000 and $32,000. Arkansas, Montana, and Mississippi are the lowest at less than $26,000.
How much should I charge?
Most private tutors will charge between $25-$80 per hour—depending on experience and frequency of lessons. When determining your rates, you’ll want consider how often you want to be paid and your policy on canceled or missed lessons. For example, if you meet with a student three times a week, you may request payment every Friday. It’s also common for tutors to request a minimum of 24-hour notice for cancellations.
Select a Name for Your Private Tutor Business
Have a great name idea? Before you start marketing and branding your business, you’ll need to ensure your name is available. Most states prohibit or restrict businesses from adopting names that are already in use. Even if it’s legally allowed, a copycat name puts your business at risk of a lawsuit.
See if your business name is available in your state with our Free Business Name Search.
Trademarks and Domain Names
Plan to trademark your business name? You can see if the trademark is available on a website like Trademarkia. It’s also a good idea to see if the domain name is available, which you can do on websites like Network Solutions and GoDaddy. Even if you don’t plan on putting together a website right away, you can buy the domain name to make sure no one takes it in the meantime.
Choose a Business Structure
Should you form an LLC? A sole proprietorship? Your choice of business structure will affect many aspects of your business, from liability to taxes.
Sole Proprietorships & General Partnerships
If you don’t file any paperwork to legally form a different kind of business—you have a sole proprietorship or general partnership. Essentially, these are “default” business structures. A sole proprietorship has one owner, and a partnership has multiple owners.
These structures have a few initial benefits. They’re easy, fast and cheap to start and maintain. However, the limitations and risks of these business structures quickly become more apparent as your business grows. In both of these business types, you are your business, legally speaking. Your company’s legal business name is YOUR name—so you’ll need a DBA to operate under any other name. Any business debt is YOUR personal debt. If anyone sues your business, they are suing YOU personally.
LLCs & Corporations
Limited liability companies (LLCs) and corporations are business entities formed at the state level. The entity is legally separate from its owners, meaning the owners are not personally liable for the debts and obligations of the business. As a separate entity, the business also has multiple tax election options. For example, both LLCs and corporations can choose to be taxed as S-corps if they meet the requirements.
LLCs and corporations are not quite as simple and inexpensive as default structures. LLCs and corporations come with formal requirements like state reports. They also have more fees than default structures, such as formation and annual report fees. However, the benefits of an LLC or corporation—especially liability protection and tax flexibility—are significant.
Legally Form Your Private Tutor Business
If you opt for a sole proprietorship or general partnership, there’s no formal paperwork to file to legally create your entity—you just start selling your product or service. However, you will not have any liability protections or tax flexibility.
LLCs and corporations are formed by filing paperwork with a state agency, typically the Secretary of State. To start an LLC, you file articles of organization. To start a corporation, you file articles of incorporation. In most states, you can file these forms online or download a paper form from the state’s website.
Whether you’re forming an LLC or corporation, your articles will require certain basic information about your business, such as your company’s:
- business address
- registered agent and office
- business purpose
- members/managers or directors/officers’ names and addresses
- number and type of authorized shares (for stock corporations)
You’ll also need the signature of someone authorized to sign on behalf of the business, along with the state’s filing fee. Fees vary by state but are typically between $100 and $200. If you hire Northwest to form your LLC or corporation, we complete and submit your formation paperwork on your behalf for just $100 plus state fees.
Create Internal Policies and Procedures
It’s important to put your company’s internal policies and procedures in a written document, especially if you’re starting your business with others. Partnerships have partnership agreements. LLCs have operating agreements. Corporations have bylaws.
These documents look a bit different for each kind of business, but they serve the same general purpose. They ensure there’s a clear path forward for any major issue that may arise, from changes in ownership to closing the business. LLCs and corporations also typically need an operating agreement or bylaws in order to open a bank account.
Get an EIN and Register for Taxes
Nearly all LLCs and corporations will need to request a federal employer identification number (EIN) from the IRS. If you file corporate income taxes, have employees, or file certain franchise taxes, you must have an EIN. An EIN is also a common requirement for opening a business bank account. Most businesses can request an EIN by filling out the IRS’s online form.
Your EIN is for federal taxes—but you’ll likely have state and local tax obligations as well. You will most likely need to set up an account with the state’s Department of Revenue, and you may need to apply for a state tax ID or a sales tax license as well.
Learn more about how to Get an EIN for your business.
Open a Bank Account
A business bank account keeps your personal finances separate from your business finances. For LLCs and corporations, keeping separate finances is essential for maintaining liability protection. To open an account, LLCs and corporations typically need to bring to the bank a copy of their articles, their operating agreement or bylaws, and their EIN.
Obtain Required Licenses and Permits
Many businesses will need a business license to operate. Licensing information—as well as any zoning requirements or other permits—can usually be found on the city or county website.
If your home is part of a homeowner’s association, you’ll also be subject to any of their restrictions for home-based businesses. Some areas may also require home-based businesses to obtain a Certificate of Occupancy (a document certifying the property owner has given the business permission to operate).
Next Steps for Your Private Tutor Business
After your business is up and running, there are a few additional steps you may want to take as you grow:
- Get online: With your domain name, you can create a business website. You can hire a professional or use a website-builder like Wix or WordPress. You may also want to invest in online ads through a program like Google Ads.
- Hire employees: Hiring employees requires quite a few steps. You’ll need to collect W-4s and I-9s from employees, report the new hires to the state, set up withholding, pay for unemployment insurance, distribute any required documents and notices to employees, and display wage and safety info in the workplace. Employer.gov is a good place to start, followed by your state’s tax or labor office.
- Get business insurance: While LLCs and corporations protect you from personal liability, you don’t want your business to go bankrupt in the face of an accident, injury or other disaster. At minimum, it’s a good idea to look into general liability insurance. Home-based businesses can sometimes add insurance onto their homeowner’s policy.
- Get an Abuse or Molestation policy: This type of policy will offer financial protection if a parent or guardian were to sue your business. You can get $1 million coverage for $5-10 per child.
How Do I Know if a Private Tutor Business is for Me?
What’s it really like to work in a private tutor business?
Private tutors typically work 30-35 hours a week—meeting with clients one on one to provide academic, occupational, or language support. In addition, you may need to communicate regularly with parents, guardians, and/or teachers.
Keep in mind that clients may not always be eager to work with you—especially K-12 students who might feel forced by parents/guardians. But, no matter what, you’ll be making an important impact on their lives and learning journey. Private tutors can be critical members of school and adult learning communities.
What does it take to succeed in the world of private tutoring?
A successful private tutor must enjoy teaching—if you don’t enjoy the process of interacting with students and helping them through the learning process, it will be very hard to compartmentalize and hide that. Having an outgoing and patient personality will be key to your overall success.
You should also be very organized, able to keep client information private, and prompt—show up on time for your meetings! In addition, you need to be adaptable, engaging, and consistently willing to listen. Maintaining a calm, approachable demeanor will ensure your students always know you care—even when you feel resistance.
Ready to Form an LLC or Corporation?
Northwest Registered Agent is here to help with all of your small business ideas and needs. Answer a few simple questions about your business, and we’ll prepare and submit your formation paperwork to the state. We also provide your new business registered agent service, free business forms and guides, and much more.