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When starting a tutoring business, you may be wondering: do you need a business plan? First things first, having a business plan makes running a business easier. It helps you understand your value proposition, reach potential customers, and can even help with financing.
In fact, businesses intending to secure a loan and those intending to secure investment capital using a business plan are positively correlated with success rates. And, while some decisions are based on risk, you cannot depend on this for the success of your business. This is where a tutoring business plan comes in handy.
So keep reading, as we'll cover everything, step by step, from marketing your services to setting prices, and more in this post.
What Makes a Good Tutoring Business Model?
The type of business plan you create will depend largely on your specific tutoring business. However, in general, a business plan is a document that clearly defines your milestones and how you plan to achieve them. Having a hard copy of all important details and goals to show potential investors and employees makes it easier to be held accountable while keeping track of these details and improving upon them.
A good business plan will help you to:
- Organize your thoughts in a professional and easy-to-understand way
- Make sound and informed business decisions with solid financial projections to reach realistic targets
- Communicate your plans to banks, your partners, and even your employees.
The biggest benefit of starting your own tutoring business is that this business can be started on any scale. You can even start it from your home with little to no investment. However, if you want to start a proper tutoring center where students with different age groups and educational backgrounds will be helped with their education, you will first have to prepare a comprehensive tutoring business plan. The business plan will not only establish the basis of your company's future operations and decisions but will also help you with funding your startup.
- Read More: Write a business plan from Gov.uk
How to Create an Effective Tutoring Business Plan
Before you start writing your business plan for your new tutoring business, spend a bit of time doing research and reading through some sample business plans written for the education and training industry. This will give you a good idea of what you're aiming for and will also show you the various sections that different entrepreneurs include, the language they use to write about themselves, and their business goals.
Sample Tutoring Business Plan
We have created the following sample outline for your tutoring business plan from some popular examples to give you a better idea of how to structure the perfect tutoring business plan. Remember that not all of these need to be included! Pick out the key elements for your tutoring business:
Executive Summary
- Include a business summary, market research summary, marketing summary, financial situation summary, and net income.
Business Profile
- Include business overview, business description, compelling value, product/service description, company history, management, location, legal structure, vision and mission, professional advisor (optional), goals, and objectives.
Market Research
- Include industry profile and outlook, local market, key competitors/SWOT analysis, TOP tutors, ABC tutoring, target market, keys to success, and customer survey summary.
Sales & Marketing
- Include pricing strategy, marketing strategy, marketing activities, marketing objectives, positioning statement, sales process, and strategic alliances.
Operations
- Include physical/virtual location, legal considerations, insurance considerations, human resources, process/production, and risk assessment.
Financials
- Include past purchases, start-up costs sheet, sales forecast assumptions, a cash flow statement, projected profit and loss and, projected balance sheet.
Appendix
- Include any relevant documentation to support your business plan.
What to Include in a Good Tutoring Business Plan
As we’ve just shown you, there are a few sections you’ll need to include in your tutoring business plan to show investors or financial institutions what gives your company a competitive advantage. This includes the following:
1. Executive Summary
The executive summary consists of your entire business plan summary. It always appears at the beginning of the plan but should always be done last. It is crucial to note that the executive summary is of utmost importance, as it will be one of the first parts of your plan that anyone reads and should be a maximum of one or two pages.
One of the best pieces of advice we can give is to not oversell your business. Usually, everyone wants to find out what you are focusing on and how you are solving the problems in your industry. Therefore, start by:
- A brief description of your entire business plan.
- Try to summarize each of the sections you're covering.
- Keep it straight to the point.
- Improve it often.
2. Business Profile
The business profile should cover what your tutoring business does, your unique selling point (USP), competitive value, vision, mission, and so on. What you need to remember is that as long as you outline your objectives and what you're hoping to achieve, your profile will look well-polished.
Don't forget to choose and highlight your tutoring method, be it online, in person, or both. If you decide to go the online teaching route, there is great tutoring software that can make life easier.
To write your business profile, follow these steps:
- Start with an elevator pitch – Describe your business in the easiest way possible, so any reader would understand.
- Stay away from smart words – They might make you sound good, but in reality, they complicate the context.
- Be straight to the point – The more clear and concise you are, the better the reader will understand your business model. A paragraph should be enough.
3. Market Research
When you present your market research, you have to demonstrate your understanding of the tutoring industry. You have to mention factors that have an influence on the industry such as local market area, key competitors, target market, and your strategy for success. An easy approach would be to start broad and then go towards more specific things that apply to your services.
Start your market research with:
- Conduct industry-related interviews with key people.
- Speak to parents and students and record what they feel it's missing.
- Identify key competitors and analyze their business offerings.
- Determine the cost of tutoring services in your area and check if your costs are competitive.
- Create buyer personas based on your target demographic and the type of students you are hoping to attract.
4. Sales & Marketing
When your offering is defined, it is time for it to be promoted with the goal of selling it. Your sales and marketing section should contain your strategy of how you are planning to market and sell your tutoring services. It is not an easy job to attract the customers you want, so it is crucial to have a thorough think about how you'll do it and plan ahead.
To attract your ideal customers, focus on promoting your tutoring services in places where they are active. Start by identifying the right platforms or channels where students, parents, and teachers seek tutoring services. Once you’ve pinpointed these spaces, craft a clear and genuine message that highlights your services without sounding overly "salesy."
Here are key steps:
- Research your target audience's preferred platforms and market there.
- Build a strong brand presence filled with valuable information that addresses their needs.
- Foster relationships with potential tutoring clients by being helpful, responsive, and informative.
- Over time, as you gain loyal customers, your brand's reputation will naturally grow through word-of-mouth, reducing the need for aggressive marketing.
5. Operations
Your operation portion of your tutoring business plan contains essential information about general operational details that help investors understand the physical details of your vision. Information such as the location of your business, assets, legal matters, insurance, and resources. If you're just started your tutoring business, the operations plan can also serve as a checklist for startups as it includes a list of everything that must be done to start turning a profit. To put it simply, you explain how your business operates from all points of view.
6. Financials
And the most stressful part of a business plan, as some may say, it's your finances and how you keep track of them and maximize revenue for your tutoring business. This is where a tutoring service business plan comes in handy, as you need to forecast spending and make sure you have the necessary resources to succeed.
Predictions are not always certain, but what you have to do is do as much research as possible in order to be as accurate as you can. Your startup tutoring business will grow over time, therefore the forecasting and budgeting will get more complex. That's why it is important that not only essential but also relevant financial data is meticulously recorded in your books.
Invoicing
Invoicing plays a key role in managing your tutoring business's financial health. It tracks charges for lessons and any additional fees. With TutorCruncher, invoices are generated automatically, featuring your business’s address, logo, and email. Clients can view and pay invoices through their accounts or receive them via email as attachments.
Some of our key features for business analytics include:
- Auto-generated invoices for easy financial tracking.
- Clients can view and pay invoices through their account, or via email attachments.
- Customizable PDF invoices, allowing companies to add personalized text, or reminders.
Our invoicing system streamlines payment processes, ensuring clear communication between tutoring businesses, tutors, and clients. Stay organized and professional with our default invoice templates and customization options.
Wrapping Up
Putting together a business plan for your tutoring company is a long but worthwhile endeavor. If you follow the template above, by the time you are done, you will truly be an expert. You will really understand the tutoring industry, your competition, and your customers.
You will have developed a marketing plan and will really understand what it takes to launch and grow a successful tutoring business. If you have any questions on getting started or setting up your tutoring business, get in touch with us at TutorCruncher, we're here to help!
