Best Small Business to Start: Tutor

Tutor

The entrepreneurial impulse often comes when a fledgling businessperson sees a problem in society and says, "Things aren't working here. Wouldn't people pay me to help change things?" In the instance of education, there are many opportunities to ask that question. "People are not happy with conventional solutions" for education, says Michael Morris, professor of entrepreneurship at Syracuse University. That's why parents pay for their kids to get additional academic help at places like Sylvan Learning and why those looking to take standardized tests pay Kaplan and other companies top dollar for test prep. Can independent businesspeople compete with national and well-funded corporations? Well, maybe not—but they don't need to. "They're not really competitors," says Ralph Perrino, who has run Northern Virginia Tutoring Service since 1995. "Parents will say they sent their kid to [a major tutoring company] and that they put them in front of a notebook or computer and it just wasn't working. There's a portion of the market that wants what we offer."

What does it pay?
According to the Bureau of Labor Statistics, in May 2007, the median annual wage of remedial education teachers was $47,830. But that number includes many who are not doing anything like independent tutoring. Depending on how much they charge an hour and how much they work, some independent tutors make six-figure incomes.

What kind of background do you need?
The keys are a love of teaching and having an expertise that you can cite in marketing yourself. Scott Rosen, a graduate of George Mason University Law School, found that he had both when he worked for a major national test-prep company as an LSAT tutor. But he got sick of the red tape—his bosses required him to get to work 15 minutes early but wouldn't pay him for that time. So, he designed his own teaching program and started teaching students one-on-one. Six years later, he still teaches in the Washington, D.C., area and has students fly in from as far away as Ghana to work with him. Rosen not only loves to teach, but his law degree gives him added credibility with prospective clients. Perrino, who has a doctorate in education leadership from George Mason University, worked as a tutor part time while getting his advanced degree but says he noticed a big boost in his business after he got the doctorate: "The day after, when I answered my phone, the reaction was very different."

A background in managing people could also prepare you for some aspects of the job that may come up. Perrino himself has not actively tutored since 1997. Instead, he directs a business that sends out tutors to work individually with students of various grade levels.

How do you get started?
No fancy office is required—you can work with students in their homes, your own home, or where they go to school. But one start-up cost to keep in mind is curriculum. If you're tutoring elementary or middle- or high-school students with their daily work, you can just help them with their own textbooks. But if you're teaching standardized tests, copyright laws will prevent you from using others' teaching materials. Luckily, the associations that run the tests often provide practice tests free to download. In terms of marketing and growing your business, emphasize the individual attention you can offer that bigger companies often can't. For Rosen, that means prepping his students not just for the LSAT but for the entire process of applying and getting into law school. "I go for the full-service approach," he says.

Learn more

• Northern Virginia Tutoring Service newsletter
• Tutoring as a Successful Business