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Tutor Your Way to Profits

With parents wanting the best academic possibilities for their children, the kids' education and tutoring arena is ripe for new businesses.

Colleges keep getting more competitive, and parents want to give their children every possible edge. Add to that the No Child Left Behind Act, which re-quires schools to provide tutoring services if their programs don't meet performance standards, and you have a solid market in education and tutoring. According to data from Eduventures LLC, an educational market research and consulting firm in Boston, revenue in the tutoring, test-preparation services and supplemental content industry for kindergarten through twelfth grade grew 6 percent in the 2004-2005 school year, reaching $21.9 billion.

Online tutoring, a $115 million market, is one of the hottest areas, especially for high school and middle school students, notes Eduventures senior analyst Tim Wiley. Selling tutoring services to schools is also sizzling, though Wiley notes entrepreneurs in this arena should be prepared to meet all the local, regional and state school requirements. For grades three through eight, reading and math tutoring is always in high demand, but look to science tutoring as a growth area in the next few years. Preschool education, too, is expected to grow exponentially, says Steven Barnett, director of the National Institute of Early Education Research at Rutgers University in New Brunswick, New Jersey--especially as more states mandate preschool for all children.

Carving out a niche in this market is Marc Stelzer, 41, co-founder of the Learning Breakthrough Program in Palm Beach Gardens, Florida. His developmental and learning program helps children age 6 and up with academic, cognitive and even motor skills. Marketing the product online as well as through therapists and professional associations, Stelzer expects sales to reach $600,000 in 2006--his first year in business.

Getting Started
Thinking of jumping into a kids" education and tutoring business? Here are some ABCs of starting up:

  • Buy materials sparingly at first. You may be excited about starting a tutoring business, but don't clean out the teacher supply store on your first visit, notes Kim McLapp of CleverApple.com, a tutoring business information resource. You likely already have much of what you need--a computer with internet access and a decent printer. Plus, a variety of free teaching materials and lesson plans can be found cheaply online or at your local library. Wait until you book your first charges to purchase the grade and subject specifics you might need.
  • Organize your policies. Determine your pricing and makeup policies up front, notes McLapp. Make sure your policies are written out and clear to the parents and students. She suggests getting payment up front for the week, and having a "no-show" policy where makeup sessions are available, for example, on only one Saturday of the month. "So you don't have people canceling on you all the time," warns McLapp.
  • Market where the parents are. Try to network with your local school districts, either to sell your tutoring services to them or to have them refer parents to your company. Advertisements in local parent publications or a flier in the local library can also help get the word out about your company, notes McLapp.
  • Start locally. Find out the requirements and regulations of your local community regarding tutoring services, notes Wiley. When providing tutoring services directly to the local school districts, there are a lot of variables to consider--especially as local values and politics determine the direction of this market.
  • Be careful with your money. Schools often pay on a 90-day delay, so make sure you have enough working capital to survive that cash flow crunch.
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