Contents(click to expand)
- What is a tutoring business plan and do I need one?
- What Makes a Good Tutoring Business plan?
- How to create an effective tutoring business plan
- Sample Outline
- Executive Summary
- Business Profile
- Market Research
- Sales & Marketing
- Executive summary
- Business Profile
- Market Research
- Sales & Marketing
- Tutoring Business plan tips and tricks
- When is it good to create a tutoring business plan?
- When you are just starting
- When bringing in partners
- When you are embarking on joint ventures
- When you need to secure financing
- 5 mistakes you should avoid when making a tutoring business plan
- Wrap Up & Conclusion
Do you have a knack for helping others learn? Are you looking for a way to make some extra money or simply want to be your own boss?
If so, starting your own tutoring business may be the perfect solution for you! In this blog post, we'll discuss how to create a successful tutoring business plan.
We'll cover everything, step by step, from marketing your services to setting prices and more. So, whether you're just getting started or you're looking to take your business to the next level, keep reading for some helpful tips and advice!
What is a tutoring business plan and do I need one?
If you have stumbled upon this blog then you are likely wondering, do you need a business plan? Does having a business plan come with benefits? Does my already established tutoring business require a business plan? We have compiled all these answers into this article that will help you create your very own tutoring business plan with clear actionable steps and examples.
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 business plan comes in handy.
Here we will provide you with a comprehensive guide on how to create a business plan for your tutoring business from scratch. Here’s what’s to come:
- What makes a good tutoring business plan?
- How to create an effective tutoring business plan?
- Tutoring business plan tips and tricks
- Tutoring business plan FAQs
Read More: Write a business plan from Gov.uk
What Makes a Good Tutoring Business plan?
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:
- Organise your thoughts in a professional and easy-to-understand way
- Make sound and informed business decisions with solid 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 centre 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.
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.
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:
- Include a business summary, market research summary, marketing summary, financial situation summary and net income.
- 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.
- 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.
- Include physical/virtual location, legal considerations, insurance considerations, human resources, process/production and risk assessment.
- Include past purchases, start-up costs sheet, sales forecast assumptions, cash flow, projected profit and loss and projected balance sheet.
- Include any relevant documentation to support your business plan.
Let's dive a little deeper into each of these categories…
The executive summary consists of your entire business plan summary. It always appears at the beginning of the plan but should be always 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. It should contain a summary of everything your tutoring business is focused on in 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 summarise each of the sections you’re covering.
- Keep it straight to the point.
- Improve it often.
This section should cover what your tutoring business does, your unique selling point (USP), competitive value, vision, mission and so on. It is important to have clearly defined points, which might be difficult if you’re still in your inception phase. 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 are a lot of tools and services that can help make scheduling and conducting classes 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. Explain what you do, your service description and your USP. A paragraph should be enough. Later on, move along with your value proposition, mission, vision and your goals and objectives. These points help elevate your business plan and set you apart from the competition.
- Be straight to the point: The more clear and concise you are, the better the reader will understand your business model.
- Keep your points short: Short sentences are key here, but make sure not every sentence is short as it disturbs the reading pace and it might make it quite monotonous. The important thing here is to keep all the essential information short and explain what requires explanation a bit longer.
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 that applies 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 analyse 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 hoping to attract.
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 are you 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.
You won’t be able to attract the customer you want by marketing where your target market isn’t present. You need to focus on making noise and push out your offering through public relations and other relevant marketing channels. This is a good exercise to demonstrate your persuasive skills and think about how can you attract students, parents and teachers to your services. Remember to be genuine and avoid ‘salesy’ language.
Here’s what you need to consider:
- Choose the platform or means of selling your tutoring services, but keep in mind that your target customer has to be on there. Do some research and find out where your target audience can be found and market there.
- Build your brand presence on your platform of choice and fill it with information that a student, parent or teacher in need of tutoring would go to.
- Once all that’s been set in stone, form a relationship with your audience and be as helpful as you can. This will help increase your brand authority and spread the word about it to other platforms.
- Top tip, if you follow most of these steps above, your brand will start getting its own voice and sell itself through loyal customers, which means you won’t have to invest much in marketing.
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 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.
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 maximise revenue for your tutoring business. This is where a tutoring 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 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 is an extremely important part of tracking finances for your tutoring business. Invoices collect the charges that have been placed on your clients from lessons and ad hoc charges. When a company generates invoices, it can review each one before sending them to its clients. Clients that have received lessons will be able to see any sent invoices and pay for them from their accounts. They can be viewed from their own login, or they can be sent to their email address as well as an attachment.
At TutorCruncher, we create and generate those by default. We pretty much already have those templates created based on the company's address, logo and email etc. Here’s an example of a basic layout of the invoices that we generate
Companies can decide if they want to add additional text to those Invoice PDFs that get sent out as well. Sometimes they might want to have their own description of what’s included on the Invoice or to remind clients to double-check them etc. Here is where it’s displayed on the INV (Default Text)
Tutoring Business plan tips and tricks
- ### Be concise
It’s really important that potential investors can understand what your business is all about from a quick glance at your plan. Make sure you include a summary of your business, and how it will make money right from the start using simple language throughout.
- ### Be specific
Being specific is just as important as being concise. The details will help you dive deeper into how you will actually deliver on your plan and promises.
- ### Know your market
A big part of knowing whether your business will be successful is understanding your audience. Make sure your plan is clear about your target market and that you have chosen them based on solid evidence.
- ### Know your finances
If your business isn’t going to make any money, it won’t be successful so you need to be very clear on how you will make a profit. Your tutoring business plan will be incredibly useful when it comes to securing loans and investments if needed.
When is it good to create a tutoring business plan?
When you are just starting
While starting, a business plan can serve as a plan of action. It is unlikely that you immediately want to secure loans or funding when starting, but creating a business plan can significantly clarify your next steps. Having guesstimates in your forecast can be risky in the long run, which means having experience in predicting your financial future might make forecasting more dependable. To get that experience, you can start with a business plan. Here's more information on setting up a business to check out.
When bringing in partners
Asking someone to commit to your tutoring business and sharing your passion before knowing the ins and outs is like asking them to buy a house without checking it out in person first. The spontaneity might seem fun at first but it is a huge commitment that needs a thorough evaluation. Using a business plan will help you convey your vision succinctly and show every relevant point to a potential partner.
When you are embarking on joint ventures
A joint venture is an agreement between companies to share the work and the profit and have the same or similar goals. As a tutoring business, you could have this agreement with non-profit organisations or aided educational institutions. A business plan is a handy tool in this case to relay not just the vision of your business, but also all required information, like your projected profit and loss, your sales tactics, and anything else you might feel is relevant.
When you need to secure financing
A good and well-written business plan will summarise your business’s history and background, which you will need to successfully communicate to banks and investors and secure financing. It is your opportunity to convince investors that your business will be a high-yield investment for their money. Lenders will want to see the actual potential in your business. Every detail from your marketing strategy to financial projection has to be presented to them to showcase that potential. This will be best done with a business plan.
5 mistakes you should avoid when making a tutoring business plan
Now that you have some in-depth knowledge about crafting a tuition business plan, here are 5 mistakes you should avoid to make your business plan foolproof:
- Every statistic and detail in your plan should be based on realistic data. Your plan should not have unrealistic financial projections.
- Do not be inconsistent, your plan should quote consistent stats and have solid, unidirectional strategies.
- Be clear about what your business plan is. A business plan is not a detailed and defined budget. While a budget is part of it, the business plan is more than just your income and expenses.
- Do not include too much information. The purpose of your plan is to be concise and to focus on the key elements of your tutoring business.
- Make sure your plan is proofread multiple times. Include your team in the process.
Wrap Up & Conclusion
Putting together a business plan for your tutoring company is a long but worthwhile endeavour. 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 here at TutorCruncher, we’re here to help!