Legal considerations when starting a tutoring business

 Elle Hosie
Legal Small Business Tutoring Business Tutoring Startup

The core of a successful tutoring business is in the quality of your tutors and the success of your marketing efforts. However, in an industry where high quality word of mouth recommendations are worth their weight in gold, managing your reputation as a professional outfit and having the documentation to back this up is crucial. So, whilst you may be focusing your energies (and budget) in the early stages of starting out on marketing and recruitment, you should spare some time to make sure your business administration affairs are a slick operation. Where possible, if you can simplify your business administration processes by getting all the important legal documentation ready from the outset, in addition to using a software such as TutorCruncher, you will free up your time to focus on getting clients and tutors and building the business.

This post focuses on some legal considerations to take into account when starting a tutoring business and some recommended documents and procedures to implement. It generally focuses on agencies setting up with multiple tutors, however if you are just starting out as an independent tutor, the same considerations should be taken into account.

Read the legal implications of opening a tutoring business.

The first thing to consider when starting a business is what legal structure your business should adopt. This has tax and other implications, so you should seek some advice about the best legal structure for your proposed business, be it a limited company, as a sole trader or a partnership. It’s best to start with something that you are going to be happy with for a while, because to change it will mean creating new contracts and processes.

Tutor recruitment:

Tutor recruitment

DBS (disclosure and barring service) checks and referencing: Because your tutors will most likely have contact with school-age children, you should complete a criminal record check for every tutor that you bring on board, get a copy of their passport and proof of their legal right to work in the UK and any educational qualifications, and obtain at least two references. You can then immediately recommend your tutors to clients in the full knowledge that they are who they say they are, that they are qualified to tutor in the relevant subjects, and safe to be around their children.

Confidentiality: You should get every new tutor to sign a confidentiality agreement, sometimes called a non-disclosure agreement (NDA), particularly if you are targeting high net worth indIvidual clients, which adds an additional layer of confidentiality and professionalism to reassure your clients. Tutors will often be teaching in the home environment and may come across personal information private to the family during visits to the house. An NDA states that the tutor will not disclose any confidential information that the tutor receives in the course of tutoring or performing services with your agency. The NDA will be between you and the tutor, so some clients may want the tutor to sign one directly between them and the client too, but at least you have notified the tutor of their confidentiality obligations from the outset.

Terms of engagement: It’s important to have a service agreement in place for tutors to sign either when they join your agency, or at the very latest when they are assigned to their first client. Are your tutors going to be independent contractors of your business or employees? Are you going to pay them weekly or monthly? Do you require that your tutors are going to work exclusively or non-exclusively with your agency? Will they be responsible for paying their own tax? How much notice must they give you if they cannot attend a session etc? The answers to all of these questions should be set out in an agreement signed by you (on behalf of your agency) and the tutor. You should get your draft service agreement reviewed by a solicitor to ensure you have all bases covered. This doesn’t have to be expensive and will be a long term investment if you use multiple tutors.

Tutor management:

Social Media policy: It might sound a bit odd to have a social media policy for a small business, when you are most probably not going to be the next Facebook of tutoring! However, returning to the issue of your reputation, it’s important to let tutors know that their social media posts are visible to the general public and therefore may be accessed by clients - and a seemingly harmless post to friends on Facebook or Twitter may damage their own and your reputation if wrongly interpreted by a client. A social media policy doesn’t have to be a load of draconian rules on social media posting, but it’s worth thinking about conveying a message to your tutors about what you expect from them in preserving both of your reputations so that they think twice before posting a naked/ drunken photograph that could get into the wrong hands.

Syllabuses: Get a copy of all the latest syllabuses so that you can easily access them. When you get a new client, you can then find out from the child’s school which syllabus they are studying for each subject and direct your tutors to the correct curriculum. This takes the work out of the tutor's and the parent's hands in having to research the correct syllabus, and removes scope for mistakes or potential liability falling upon you or your tutors for teaching the wrong content.

Client relationship management:

Clients: have a ‘welcome pack' ready for clients when they come on board for tutoring. Even if it is just one trial lesson, you should get them to agree to your Terms and Conditions so enclose a copy of these in your pack. Your terms and conditions will set out payment terms e.g 30 days/ before the session, costs, confidentiality, cancellation periods etc. Depending on your market, have a ‘pack’ for schools and one for parents. You can get someone to review or prepare some Terms of Business for a couple of hundred pounds and you will be able to reuse them for each client, so it is a long term investment to get them right from the outset. There are some document generators online where you can produce a terms and conditions of business, though it is strongly recommended that you have them reviewed by someone qualified to do so so that you can ensure that terms specific to your company and the nature of your business are included. You can also include a copy of your NDA to illustrate to clients the fact that you take their confidentiality seriously.

Advertising and marketing: Those who have experience of the advertising and marketing industries will know that there are many rules and regulations about advertising, but particularly where children are involved. Your marketing efforts should emulate your values as a professional tutoring company. This point is connected to the above post about social media - how you portray yourself on social media is just as important as managing your business social media accounts. Be careful about contacting prospective clients or schools via social media. Try and build your own profile as an influencer, commenting on relevant content and creating interesting content, rather than just using it to hunt down prospectives and be particularly careful about how you deal with schools. Think creatively about how to market your business to stand out from others- perhaps by creating partnerships with other (non-tutoring) activity providers or running an offer. And definitely don’t go hanging around school play grounds to flyer to parents - if you want to advertise through a school contact them with a polite email enclosing your advert and let them make the decision on whether they use it. There are also rules on misleading advertising and sending direct marketing emails, so you should refer to the Advertising Standards Authority if you are unsure whether your marketing is appropriate and legal.

Data protection:

Data Protection

If you hold or use personal information (any data that can identify an individual) about your clients, employees or other people, you are legally obliged to protect that information. This includes databases and any documents containing personal information e.g. passport copies. In summary, you should be very careful about how you store client and tutor personal data, and have a data retention policy for deleting data of tutors and clients who you have not worked with for over, say, 12 months. Set reminders to contact tutors on your books after 12 months of inactivity and ask if they still want to have their details on file with your agency. CRB checks and bank details are classed as sensitive personal data under UK data protection laws, so you have a higher burden of responsibility to store this type of data securely, ensure it is up to date, and relevant. And whatever you do, do not sell or give away data to third parties without serious consideration of whether this is legal. Direct marketing (e.g. via email drops) is also regulated by data protection law so you may need to obtain express consent to using data for marketing purposes. If you are unsure about your obligations under data protection law, seek advice and look at the ICO website where you can do an assessment about your data protection compliance.

Of course legal issues are important to avoid doing something illegal or getting into disputes, however, equally important is the reputational value in taking good care of your business affairs. Although you are acting as an intermediary or referral between client and tutor, the more professional you are, the more your clients will trust you and you will stand out against other tutoring businesses.

Elle Hosie, Startup Consultant

Elle Hosie is a consultant for startups and SMEs, providing practical and relevant advice on getting the business up and running and operating within the law. Elle has substantial experience of working with clients in the education and ed-tech sector. For more guidance and a free initial consultation contact her via email: elle@elletrepreneur.com

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