When I was a college student, I used to tutor a few kids in Japanese as a way of earning a bit of extra money. After about the third lesson, I realized that I had no idea what I was doing. I could handle the teaching part just fine. It was the business side of things that was a mess. I wanted to add a few more students and make a bit more cash, but I felt disorganized. I needed a plan.
Where to begin? Many of us begin our self-employed teaching and tutoring careers accidentally. You are asked to teach the neighbor kid or you start helping someone that asks for help. It is a great part-time job. If things progress, before long you are juggling a handful of students, tracking progress, recommending materials, making materials of your own, managing scheduling, etc. The simple tutoring business can blossom into a lucrative but chaotic and stressful venture quite quickly.
Turning a set of ad hoc lessons into an organized and profitable business is easier than you think. You just need to spend 30 minutes writing a business plan.
WAIT! Don’t leave! It is much, much easier than you think. You see, business plans are just like other plans: house plans, vacation plans, and–most importantly for us–lesson plans. They are simply the outline of how to get something done and what it will look like when it’s finished.
Here’s how to create your self-employed teacher/tutor/trainer/coach business plan in two easy steps:
- Get some paper.
- Answer the questions below.
I have used a simple dance instruction business as an example:
Describe your business in one sentence.
Example: I teach swing dancing to college students and adults.
Describe the problem you are solving. (Who are your students? Why do they need you?)
Example: Many adults in my community are looking for opportunities to get a little exercise and meet new people. Swing dancing is a fun and active way to meet new people and learn a new skill.
Describe the solution you are providing. (Describe your lessons and how they help these students.)
Example: I teach two swing dancing classes every week at the ABC community center. The first class is a beginner class that runs from 6:00 – 7:00 PM. The second class is an intermediate class that runs from 7:15 PM – 8:15 PM. I provide instruction in the the dance steps, guided practice, and personal support. For students that need more help, I provide one-to-one lessons. Every month, I provide a social dance where past participants from my classes and members of the public can dance and socialize. The dance is from 7-10 PM.
Describe how you will make money. (What do you charge? How do you charge, for example per hour, per group of hours, per class, etc.?)
Example: The beginner and intermediate classes are open to up to 30 people per class. Each class is 6 weeks. I charge $100 for each 6-week class. I offer each class 6 times per year (once every 2 months). For the monthly dance, I charge $10/person. We can accommodate up to 100 people.
Beginner class: 30 people x $100 = $3000 potential revenue x 6 classes per year = $18,000/year
Intermediate class: 30 people x $100 = $3000 potential revenue x 6 classes per year = $18,000/year
Monthly dance: $10 x 100 people = $1000 x 12 dances per year = $12,000
So, my total potential revenue is $48,000 per year. However, classes and dances rarely fill up. We average approximately 50% of capacity. So, my actual anticipated revenue is $24,000.
We take all payments in cash on the first day of class.
Describe your expenses. (What does it cost you to provide your lessons? Are there any other expenses such as accounting, software, travel, coffee for students/clients, etc.?)
Here are my anticipated costs:
Room rental fees: $50/hour
General liability insurance: $500/year
Staff: No cost. I provide all instruction and DJ services. For the dances and lessons, I have a volunteer help with taking money in exchange for free admission to the dance/class.
Other fees: business license ($100), printing of fliers ($200/year), new dance shoes ($100), refreshments for dances such as juice/cookies (12 dances x $30 = $360).
Compare your income to your expenses to make sure you can make money:
Beginner classes for the year: $18,000 x 50% capacity = $9000
Intermediate classes for the year: $18,000 x 50% capacity = $9000
Dances for the year: $12,000 x 50% capacity = $6000
Total Revenue: $24,000
Room rental fees: $50/hour x 108 hours/year = -$5400
General liability insurance: -$500
Business license -$100
Printing of fliers -$200
Dance shoes -$100
Refreshments for dances such as juice/cookies -$360
Total Expenses: -$6660
Profit (Income – Expenses): $17,340
Taxes (40%)* -$6936
Profit after taxes: $10,404
*(Income tax [depends on your bracket, etc., but let’s estimate about 25%] + Self-employment tax [15.3%]. We will discuss taxes in a future post, but please remember that we are not accountants and this is not meant to be financial advice; it is always important to check with a professional about taxes. )
Describe what materials you will use with your students.
Example: I have been dancing for years and have over 50 dance steps I can teach without using reference materials. Since we review every week, I do not need to distribute any materials.
Describe how you will find new students/clients.
Example: I have a website that lists the class schedule. It is linked to a registration page where potential students can sign up. I considered using a registration site like Eventbrite, but it takes additional fees. Currently we only take cash.
I have an email list to remind people of upcoming classes. I post fliers at the community center and at the library and coffee shops in the community. I also post on my Facebook page and on Instagram. The community center has a newsletter and email list. They include my classes in their newsletter for free.
Business plans do not need to be complicated. All you need to do is write down the answers to a few simple questions. Once you have these answers, you can begin to think more carefully about your business.
Post your business planning questions below!