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How do I write a tutoring business plan?

A tutoring business plan for an independent online tutor fits on one page. It answers six questions: who you teach and what you help them achieve, what you sell and at what price, where your families will come from, what it costs to run each month, how many hours you need to teach to hit your income goal, and what you'll check each month to know it's working. You only need the long version — executive summary, market analysis, multi-year financials — if a bank, an investor, a business partner or a landlord is going to read it. Below: the template to fill in, a worked example with every number shown, and the mistakes we see most often. We build Koala Go, a virtual classroom for tutors, so where our plans belong in your costs we say plainly what they cost.

Do you need a business plan to start tutoring?

Not to teach your first lesson. Plenty of good tutors start with one family from their own network, and that's the right first step — how to start tutoring online walks through it. Where a plan earns its keep is the decision after that: whether to leave a job, which niche to commit to, what to charge, whether you can afford the long holidays. Those are arithmetic questions, and a plan is where the arithmetic lives. Write the one-page version in an evening, ideally once you've taught a few paid lessons and know how long prep really takes, and look at it again every quarter.

The one-page tutoring business plan: a template to fill in

Copy these nine lines into a document and fill in the brackets. Short answers beat long ones. If a line takes more than three sentences, you probably haven't decided yet, and the plan has just found you a decision to make.

  1. The business in one sentence. "I teach [subject and level] to [who] online, in [lesson format], so that [the result the family is paying for]." For example: "I teach reading to 6- to 10-year-olds who are behind grade level, in 1-on-1 online lessons, so they catch up and stop dreading books."
  2. Who pays and who decides. [The parent / the adult learner / a school or company]. What they're worried about: [a grade, an exam date, a reading level, confidence]. Where they live, and which time zones you'll teach across: [...].
  3. What you sell. Lesson length: [45 / 60 minutes]. Format: [1-on-1 / small groups of up to 4]. How families buy: [per lesson / a monthly package of 4 or 8 / a term block]. Policies: [cancellation notice, make-up lessons, when payment is due, who sends lesson reminders].
  4. Price. [Rate per hour] and [package price], and the three reasons behind it: your floor (the least an hour can earn after fees, tax and unpaid prep), the market (what similar tutors charge the families you want), and your difference (what you do that the next tutor doesn't). The full method is on how much to charge for online tutoring.
  5. Where families come from. Your first five: [names, or the networks they're in]. Your next twenty: [referrals from current families, a directory profile, local parent groups, contacts at schools, a simple website]. And your replacement rate: [how many families you expect to lose a month] — the number of new families you need just to stand still.
  6. Monthly costs. Teaching platform [...], payment processing [...], accounting software [...], website and domain [...], materials and training [...], insurance if you carry it [...]. One-time: [hardware]. A solo online tutor who already owns a laptop with a working camera usually spends $60–$120 to start; buying everything new is more like $500–$700.
  7. The numbers. Monthly income goal [...] ÷ hourly rate ÷ teaching weeks per month = the billable hours a week you need. Then: how many families that is, whether it fits your capacity (most solo tutors top out around 25–30 billable hours a week before quality slips), and your break-even (fixed monthly costs ÷ what you keep from one lesson).
  8. Milestones, with dates. First paying family [date]. First full week [date]. First rate review [date]. First referral [date]. Dates turn a plan into something you can be behind on, which is the point.
  9. Risks, and what you'll do about them. The holiday dip [...]. Your main source of families drying up [...]. A lesson lost to tech trouble [...]. You being ill for two weeks [...]. One sentence each is enough.

A worked example, with every number shown

Here's the plan's arithmetic filled in for an illustrative solo tutor — not a real customer, just round numbers you can swap for your own. She teaches reading to primary-school children in 60-minute 1-on-1 online lessons at $50 an hour, inside the $35–$60 band typical for established generalist tutors (a credentialed structured-literacy specialist would usually charge more). She plans to teach 46 weeks a year, because the long summer break is quiet for school-age tutoring and holidays happen, and she wants the business to bring in $2,500 a month on average before tax.

Line in the plan Working Result
Teaching weeks per month 46 weeks ÷ 12 months about 3.8
Billable hours needed $2,500 ÷ $50 ÷ 3.8 about 13 hours a week
Families needed 13 hours ÷ 1.5 lessons per family per week about 9 families
Replacement rate 9 families ÷ an average stay of 12 months about 0.75 a month, so plan on one new family a month
Teaching platform Koala Platinum, billed annually (why, in the next section) $39.99 a month
Card processing assumed at about 3% of $2,500 — check your processor's rates about $75 a month
Accounting software, domain, materials and training $15 + $10 + $30 $55 a month
Total monthly costs $39.99 + $75 + $55 about $170
Kept before tax $2,500 − $170 about $2,330 a month
Unpaid hours prep, messages to parents, invoicing, scheduling about 6 hours a week
Effective hourly rate ($2,330 × 12) ÷ (19 working hours × 46 weeks) about $32 an hour before tax
Break-even about $95 of fixed costs ($39.99 + $55) ÷ about $48.50 kept per lesson after processing 2 lessons a month

Three things the example makes visible that a gut feel doesn't. First, the gap between the headline rate and the real one: $50 an hour on the invoice is closer to $32 an hour for the time she actually works, before tax, and the unpaid hours are the biggest reason. Second, the replacement line: with nine families who stay about a year, she needs a new family roughly every month just to stay level, so finding families is a monthly habit, not a launch task. Third, break-even is tiny — two lessons a month cover the fixed costs — so the risk in a solo online tutoring business isn't the costs, it's the hours. Most of the plan's attention belongs on lines 5 and 7.

She'd also set aside part of what she keeps for income tax. How much depends on where she lives and how the business is registered, so in her plan that's one line — "ask a local accountant before the first tax deadline" — rather than a guess.

Where Koala Go fits in the cost lines

If you teach on Koala Go, the platform line is one of three plans. If you also invoice families through Koala, the invoice fee belongs in the same line, because the two trade off against each other.

  • Free — $0. A real classroom, not a trial: up to 4 students per session, image uploads (JPEG and PNG), a limited cobrowser, up to 3 saved activities, and worldwide invoicing with a 4.5% Koala fee on invoices.
  • Koala Pro — $25.99 a month, or $21.99 a month billed annually ($263.88 a year). Adds built-in scheduling with a booking link families use to book you, PDF and PowerPoint upload, an unlimited cobrowser, lesson recording to your own computer, live support from a real person, unlimited activities, and a 3.5% Koala fee on invoices.
  • Koala Platinum — $49.99 a month, or $39.99 a month billed annually ($479.88 a year). Everything in Pro, plus a 0% Koala fee on invoices, Scheduling Plus (30-, 45- and 60-minute class lengths, booking policy controls, recurring classes), cloud recordings of classes, and auto-generated class notes.

The trade-off is simple arithmetic on those numbers. On Pro, every $100 you invoice through Koala costs $3.50 in Koala fees; on Platinum it costs nothing, for $24 more a month on monthly billing ($18 more on annual). So if you're on Pro for its features, Platinum costs less overall once you invoice more than about $690 a month through Koala (about $515 a month on annual billing). In the example above, $2,500 a month invoiced through Koala would cost $109.49 a month on Pro billed annually ($21.99 plus $87.50 in fees), against $39.99 on Platinum billed annually. If you invoice families some other way, the fee line disappears and the comparison is just the plan prices and what each plan includes.

Two more things worth writing into the plan's pricing line. Card processing is charged by the payment processor on every plan, on top of Koala's fee. And when you create an invoice you can choose to have the fees added to it, so the family pays them rather than you; either is reasonable, but decide once and set your price with it in mind. Invoices are in the currency of the country on your account, or in US dollars if Stripe can't pay out in your country. A family abroad can choose to pay in theirs, and the payment platform converts at its own rate, so set your price in your invoice currency and expect what they're charged to differ a little from the estimate.

A few things belong in line 9 if you teach on us, because they're true today. Koala doesn't email lesson reminders, so reminders are yours to send (or the family's calendar's). iPad works but is rougher than a laptop or desktop, so ask families what device the student will use. And mainland-China connections run through our Hong Kong proxy but are still a moving target, so a plan built around families in mainland China should test the connection on a short free lesson first.

If your plan has other tutors in it within the next year, that's a different shape of business, with its own costs and software: running an online tutoring business with multiple tutors and tutoring business management software cover it.

Using the plan once it's written

A plan you never look at again is a wish. The habit that makes it useful takes about twenty minutes a month: put this month's real numbers next to the plan's, and change one thing.

  • Billable hours, as a four-week average rather than this week's count.
  • Average rate actually earned per hour, after discounts and packages.
  • Families: how many are active, how many left and why, how many started and where they came from.
  • Unpaid hours: prep, messages, admin. If they're growing faster than billable hours, that's the line to fix next.

Once a quarter, check your rate against line 4 and see which source in line 5 is actually sending families. Most tutors find one source does nearly all the work and the plan's other ideas never happened. When the practice changes shape — a new niche, a waiting list, a second tutor — rewrite the sentence in line 1 first, then everything that depends on it. How to grow an online teaching business covers what to do when the numbers say you're ready.

When you need the long version

A bank loan, an investor, a business partner, a lease on a room for a tutoring centre, or a grant application will usually want a conventional business plan. Its standard sections map straight onto the one-pager, so write the one-pager first and expand it:

  • Executive summary — line 1, plus the headline numbers from line 7. Write it last.
  • Business description — lines 1 and 3: what you offer, how, and the legal shape of the business.
  • Market analysis — line 2, expanded: who the families are, how many are within reach, who else serves them and how.
  • Services and pricing — lines 3 and 4.
  • Marketing and sales — line 5, including the replacement rate.
  • Operations — your teaching platform, scheduling, invoicing, and how lessons are delivered and recorded.
  • Team — you, and anyone you plan to bring in.
  • Financial projections — line 7 stretched over 12 to 36 months, month by month, with the startup costs from line 6 and a realistic ramp (most tutors take two to four months to reach a steady weekly schedule).
  • Risks — line 9.

Resist padding it. Someone lending you money mostly reads two things: the projections and the evidence behind them. Real numbers from your first months of teaching — families, hours, rate, how long families stay — are worth more than pages of research about tutoring in general.

Mistakes we see in tutoring business plans

  • Planning 40 teaching hours a week. A full-time office week isn't a full-time teaching week. Lessons take energy, prep and buffer time, and most solo tutors top out at 25–30 billable hours a week. Set the income goal against that ceiling, not against 40.
  • Treating invoiced money as income. Platform and processing fees, tax, and the unpaid hours all come out of it. The effective-hourly line in the example is there so the plan can't hide this.
  • Pricing off the market alone. Copying what other tutors charge skips your floor. If the market rate doesn't clear your floor, the plan needs a niche or a different audience, not a lower price.
  • Forgetting the calendar. School-age tutoring has a long summer dip and busy weeks before exams. A plan that assumes 52 identical weeks will be wrong by the first long holiday.
  • No replacement line. Families leave for good reasons — the child caught up, they moved, the exam is over. Without a planned number of new families a month, every departure feels like a crisis.
  • Spending before the first five families. A logo, a polished website and paid ads can all wait. The first families almost always come from people who already know you.
  • Writing the plan instead of teaching. If the plan has taken more than a weekend and you haven't taught a paid lesson yet, stop and book one. The plan gets much better once it has real numbers in it.

If you'd like a second pair of eyes

If you've filled in the template and want a sanity check on the numbers, or you're stuck on a line, write to us at koala@teachwithkoala.com with the plan pasted in. We're a small team of techies from families of teachers, and most of what we know about how independent tutoring businesses actually run, we learned from the tutors who wrote to us.

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