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Tutoring tips

8 Important Tips and Tricks For Tutoring Companies

TABLE OF CONTENTS

Here's a list of the last 8 important tips for managing a tutoring company.

  • Tip 23: The seasonal aspects of tutoring
  • Tip 24: Most common subjects and grades in demand
  • Tip 25: Easiest grades to cater to, but hardest to fulfill
  • Tip 26: Always show your lowest possible price
  • Tip 27: Premium tutoring services do not work
  • Tip 28: Stay away from specialty subjects if you don't specialize in them
  • Tip 29: Always get money up front (or expect losses)
  • Tip 30: Canadian tax collection debunked
  • Comments

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This is part 6 of a mini-series originally entitled: 30 tips and tricks for managing a tutoring company. Throughout the previous five parts we exposed a number of very important do's and don'ts in order to build a successful tutoring business. While these are the last 8 points, they are certainly not the least important. These 8 important tips and tricks for tutoring companies covers areas of interest that should not be overlooked prior to starting your tutoring business.

THE SEASONAL ASPECTS OF TUTORING

A tutoring business has an on-season and an off-season. You must prepare for the seasonal aspect of this business. The busiest season for K-8 tutoring is September. High school tutoring has a busy season in November and March.

Depending on the grades you tend to service, the busy seasons will be at different times which means you have to prepare your marketing and service availabilities at different times. Moreover, it will affect the tutors you need to hire in advance.

You may not know early on what the demand will be for specific grades so you're going to have to play it by ear, at least initially. Once you have a better handle on your client-base, you need to adjust the times you start marketing to potential clients and managing your supply of tutors.

Marketing management refers to online advertising, calling of prospective clients, calling and emailing past clients, and holding community events. If you mainly cater to K-8, you will want to do these things by late July through the month of August. In this case, you need to be ready for the September demand when parents of younger children begin to reach out.

If you cater to high school students, those parents will routinely trickle in after Halloween (End of October). This is when mid terms are sent home and conscientious parents react to less than stellar grades.

The elephant in the room is always Summer Break. The summer can be a killer to your revenue stream. If you want the time off to recharge, by all means, don't prepare for the summer. The demand for tutoring services during this time is extremely low. On the other hand, if you still have bills to pay and the regular school year doesn't generate enough income you will have to be innovative to achieve sustainability.

During the summer months you will want to devise a type of Summer Camp for students. This can be in person or virtual. The emphasis should be on strengthening core skills learned the year before, preventing knowledge loss during the summer, and preparing the student for the upcoming year.

Parents who ACT rather than REACT to their child's education needs will likely consider a summer program. Don't get me wrong, you're going to have to show how a summer program is worth the money, but you know who these parents are and they aren't afraid of spending money if it will help their child.

To get the most out of the summer months make sure you have an alternative like a summer program for your clients. It's money that will be left on the table if you decide not to pursue this service offering.

MOST COMMON SUBJECTS AND GRADES IN DEMAND

This is not a surprise to anyone. At least it shouldn't be. Subject in high demand for K-8 are reading and mathematics. Subjects in high demand for High School are STEM; science, technology, engineering and mathematics.

As mentioned in the previous point, you need to know who your clients are likely to be and take appropriate actions when devising your service offerings and hiring tutors.

Take note, science and mathematics tutors are generally harder to find and they demand more money. If you do not pay them well they will not be reliable and will likely steal your clients. I recommend having close relationships with these tutors. Build rapport with them. Make them feel extra special. If you don't they could seriously erode your customer satisfaction and overall service quality.

You have been warned.

EASIEST GRADES TO CATER TO BUT HARDEST TO FILL

You are going to have a lot of High School students and their parents inquiring about your tutoring services. That's why they represent the lowest margin cost per client acquisition.

But there is a catch.

There's always a catch.

These clients require in-demand subjects and tutors which brings us back to STEM (the previous point) and all its difficulties. So while they are the cheapest group to acquire, they are simultaneously the most expensive group to find tutors for.

This brings us to the wonderful nuances of managing a tutoring company. You have two sets of clients. Yep, you heard that right. You have two sets of clients: one is the parent or student and the other is the tutor.

If you have access to a lot of good STEM tutors, you may know them in some way, and you have a good relationship with them, you are going to love running a tutoring company.

If you were like me, and you have to go on the open market to find STEM tutors, you need to do some calculations and determine what it's going to cost to hire and pay these tutors. If you do not pay them enough your business will suffer. If you do not charge enough for these subjects you might find yourself working for free.

I'm going to contradict myself now. Sorry.

No matter what you pay your tutors they won't be happy. Tutors will always expect more from you. That being said, pay your tutors well but not too well. If you pay them above the market average, for their subject competency, they will be more demanding.

Pay them fairly and not more!

ALWAYS SHOW YOUR LOWEST POSSIBLE PRICE

At first I didn't like this gimmick. I thought it was best to advertise the likely outcomes. I could not have been more wrong. For the most part parents and students are price takers; meaning they will inquire first with those companies that appear to be competitively priced.

What showing your lowest possible price does for you is get them in the "door." Once you have a chance to speak with them, build rapport, and introduce them to your unique service offerings, then you'll have a chance of closing the sale.

When you do not appear competitive, next to your competition, you risk never getting that phone call or drop in, and that's a shame. In addition, your competition will be ruthless. All industries have competitors that routinely push the envelope of the ridiculous. Many parents will pick up on this but you want to at least appear to be similar priced without making claims that are out of this world.

A way to show your lowest price is to break down the cost per day.

It may look something like this:

A+ Package Option 1:

  • 1 hour / week
  • runs for 4 months
  • after session reporting
  • final in-person report
  • $60 per week

This is better than;

A+ Package Option 2:

  • 1 hour / week
  • runs for 4 months
  • after session reporting
  • final in-person report
  • $960.00 semester cost

How does that look?

What would you gravitate towards?

To me, option 1 looks a lot better. $960.00 is a scary number. $60.00 is a much more manageable amount. Wouldn't you agree?

I rest my case.

PREMIUM TUTORING SERVICES DO NOT WORK

I know. This statement is controversial. Premium tutoring services can work, but not for 90% of you out there. You have to have the perfect storm.

To have a successful premium tutoring business you must have the following:

  • high socio-economic client base
  • access to high value clients (through networking most likely)
  • above average operating budget
  • unique 'stressor' leading these client to access alternative education services (COVID-19 was a precursor for some premium tutoring businesses that had these types of parents within their sphere of influence. What happens when the 'stressor' is gone?)

Since many of these factors are out of your control I would caution anyone who does not answer YES to 3 of 4 of the points above from starting a premium tutoring business. That does not mean you can't try to move towards this type of business, but it shouldn't occupy the majority of your time and energy.

While it is nice knowing you are charging 100% more than most of your competition, these high value clients are much more demanding. You will be expected to show a significant value added when charging a premium price.

You might not be prepared for the demanding nature of high value clients.

STAY AWAY FROM SPECIALTY SUBJECTS IF YOU DON'T SPECIALIZE IN THEM

Self-explanatory right?

You would be surprised.

When you first start out, you will want to say YES to every client that calls. Your inclination will be to accept the client and do whatever it takes to make good on your service claims. This could work sometimes, but not always.

Specialty subjects like language tutoring, and post-secondary tutoring are tricky to predict demand for and will result in frantic efforts to find adequate tutors. As mentioned earlier, this will cost you money and time to recruit under these conditions and you will be negotiating with tutors that are high priced and demanding.

If you aren't careful you might find yourself spending more money servicing these clients than you bring in. This can lead to "Black Hole" scenarios and you want to stay far away from them. Trust me.

I would only recommend you pursue this type of client if they are willing to pay a premium price for your service. This means you should be compensated an additional 100% in fees/costs and that money, or at least some of it, be paid up front.

Otherwise, specialty subjects are not worth your while.

ALWAYS GET MONEY UP FRONT (OR EXPECT LOSSES)

That's as succinctly as I can put it. If you don't get the money up front you are going to lose money. The only reason for you to invoice after the fact is if you have determined you can make more money through closing deals and accepting some loss than you would if you turned them away.

You would only know this relationship after operating your tutoring business for at least a year. If you are new to the tutoring industry, I highly recommend you start with a pay in advance policy. After you have some experience you can re-access your position.

In my communications with our tutoring software clients, medium-sized companies are moving towards payment in advance.

I said what I had to say.

CANADIAN TAX COLLECTION DEBUNKED

If you operate a business in Canada you may already know this, but I have talked to a number of tutoring business owners and they rarely have the facts entirely correct. This is just a quick tip for my Canadian tutoring owners regarding HST and GST tax rates.

Tutoring K-12: no taxes need to be collected regardless of the $30k threshold.

Tutoring University/College or Business Clients: no taxes if you make less than $30k gross revenue per year, if you collect more than $30K gross revenue per year, you will need to collect HST.

Here's another tip when dealing with the CRA.

You will be asked if you want to report HST monthly, quarterly or yearly. If you choose quarterly or yearly, you MUST still make monthly HST payments to the CRA!

Sound counter intuitive doesn't it?

If you do not pay your HST payments every month and wait for the end of the year, even if you choose yearly reporting, you will be fined by the CRA and they will collect a hefty interest on the amount you accumulated throughout the year.

Make sure you pay your monthly HST payments if you are required to collect taxes.


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COMMENTS
This is the final article for 30 tips for managing a tutoring company. It was a long time in coming but we got here. What are your thoughts on the last 8 tips? In some ways I saved the best for last. Let's hear your opinion.