Make a Fortune Being a Tutor

Here's a comment left on my post titled 26 Ways to Make More Money:

I am a student and a tutor. I teach economics, mostly for law and business students. They tend to have the most money.

The rate per student per hour has been 25 euro for years, bur recently went up to 30 euro ($47 at the time of this writing). There also is a entry fee of around 170 euro ($265 at the time of this writing), although this is often used as a first degree price differentiator. (So we have a first talk with the parents, look at their clothes, car, manners, negotiation skills etcetera and give a discount on the entry fee if necessary, but never on the hourly rate.)

I receive half of the revenue, the other half is for the company that recruits the students. It gets juicy when we start teaching to groups of up to 3: 45 euro per hour ($62 at the time of this writing). I did a lot of that last year and saved over 600 euro per month ($935 at the time of this writing) working less than a day per week.

So yes, it's a great business as a tutor. Not so much as a company, because a lot of tutors run away with the clients and the business model is therefore not that scalable.

He said he can make $62 per hour with three students, but there's no reason he couldn't have more and work more hours (though I will assume that this is the most that can be earned for the numbers I'll share below.) Consider the following:

• If he can work 50 weeks per year for 40 hours a week, at $62 per hour, that's $124,000 per year.

• Let's say he can only earn half that amount per hour or only work half that many hours per year. That's still $62k per year.

• But let's say he runs his own business (doesn't have to give half to the company) and works full-time. He'd double his salary to $248k plus the entry fee (which could be substantial.)

So what's this say for the rest of us who have jobs? Couple thoughts:

• Could be a GREAT part-time money-maker.

• Eventually, it could then be developed into a full-time business.

Comments

[MMJ]

I would be leary of getting into this full time, especially with the economy being what it is. My wife works for a large chain and she has seen quite a dropoff of students the past couple of years. She has heard from parents saying that they cannot afford tuition vs other rising costs.
Now, as to keeping it small, I would say go for it. The one thing that many schools systems require is tutors to be teaching certified. This may hinder some, but there may be ways around it. Many large business require upfront payments, where as individual tutors may allow payment on a weeky or monthly basis. This is more attractive to parents.

[That One Caveman]

I have been thinking about doing this as a ministry in my church. I'm working on organizing subject specialists right now who will volunteer a few hours a week. This way we can give tutoring services to the children in the church and community who need it but can't afford it. Hopefully it will give them a chance to succeed that they wouldn't have had otherwise.

[Ron@TheWisdomJournal]

I'm encouraging my high school girls to start tutoring to earn some extra cash in the afternoons. We send our children to a private school and their education is top notch. There's no reason why they couldn't tutor kids in 1st through 5th grades.

["Mo" Money]

Sounds like an attractive way to lbring in some extra money.

[Cathy]

Speaking as a self-employed person: If he went full-time and did it as his own business, he likely wouldn't get 40 billable hours in a week. Running your own business takes time, time that you can't bill to other people. He would either need to work more than 40 hours a week to get in 40 billable hours and maintain and market his business, or he'd need to hire an assistant, which would cut into profits.

I agree he could make more if he removed the middleman, but I doubt he would double his income unless he also raised his fees.

[Margo]

I'd be interested to know what school he attends. The relative wealth of your peers directly affects what rate you can charge before parents opt for another tutor. I'm also interested to know whether he travels or if the students come to him. My in-home rate is almost double my in-library rate, and I am thinking about adding a 2-hour minimum.

[fathersez]

With rising costs of tertiary education, many parents invest in tuition in the early years to get the kids better equipped for scholarships and the like.

We are working on the same line for our 3 younger kids. I am now working out the tuition costs for them and it is looking more and more like a great viable business.

[dino]

I have tutored and paid for tutors at the college level. The tutor I paid for 2 upper level math courses was a phd candidate and I paid $25/hr. Worth it considering I would not have passed either class without his help (its not just the cost of taking the class again but the lost income from having to stay in school that much longer). As for my own tutoring experience I did some tutoring through the college where they paid my wage (not very much) and I did some freelance tutoring for almost twice what I made through the college. One drawback was how flaky the some of the people were. Calling ten minutes before and appointment to cancel or not calling at all. The one advantage to tutoring was that it helps you build communication skills. Skills that can go on a resume. Being able to communicate complex ideas to someone that doesn't have any experience in your field is a commodity. Anyone can be an expert in a given field but what makes you a valuable employee is being able to communicate effectively with people that may not have the same background as you. And that is where tutoring comes in. It gives you experience communicating complex ideas to people that don't have the same background as you and in the long run that can be worth more than the $20/hr you charge your students.