How To Start Your Own Tuition Centre Or Home Tutoring Service in Malaysia
A great many people in the Malaysia aspire to set up their own tutoring business, and with so many benefits that come along with the job, it’s not particularly hard to see why. Tutoring is a very flexible profession; you can do it from home and you can do it to make some extra money in your free time. You also don’t need to be a qualified teacher to become a tutor. Many tutors simply use the knowledge they’ve gained from A-level or degree qualifications. Or course, most importantly, tutoring can be a very rewarding experience, and many who start out as part-time tutors end up making a career of it.
If you’re passionate about a subject, work well with young people, and have bags of enthusiasm then tutoring might just be the thing for you. But as with any other business, setting up a tutoring agency requires lots of preparation if you want to be profitable. To help you plan your start-up tutoring business we’ve put together these top tips for success in the industry – full marks guaranteed!
Tutoring is listed as one of the top 16 industries worldwide for starting a new business, with a with a growth rate of 7%in the last year — and recent findings from Global Analysts, Inc. suggest the private tutoring market will exceed $102.8 billion by 2018!
Starting a tutoring business does not need to be an overly complicated process and it doesn’t require large amounts of money to be spent on advertising or start-up costs. Tutoring is a business that allows you to start small and expand over time. Despite the relative simplicity of the business, it is important to do some research and put a plan in writing to guide you through the process and maximize the success of your business.
The following list covers essential steps you need to take in order to build a successful and profitable tutoring business.
Think It Through and Plan Carefully
This might seem like a redundant piece of advice. However, most people like to jump into something without really weighing out the pros and cons of the matter. That is why we have chosen to make this the first step. Sit back and relax before you decide to embark on something this huge.
Before you proceed on opening your first tuition centre, make sure you have reviewed all the regulatory terms that is needed by the government of Malaysia. You would have to read through and completely understand the steps needed to create a business that is related to the Malaysia education system.
In addition to that, you would obviously need to ensure that you are financially stable and you have enough cash from tuition fees received to not only sustain the operations of the tuition centre but to have enough money from every month to take home as profit as well. What is a business that does not have return profits for the owner right?
Besides just money, you also need to study your market and your target customers as well. Is the type of business you are planning to set up worth it in that area? Is it a commodity that is needed by the people who live there? Do you have enough supply to feed the demand? Here are some of the questions you need to ask to ensure your venture is able to sustain itself and become a profitable entity :
- Start a market study on the area you are planning to set up shop.
- Find out what type of education center is demanded in the market
- Identify the rental prices and the amount of business you can garner from that area.
- Have a yearly business plan on how you want to run your tuition centre.
- How many direct competitors you have? How are you going to market and differentiate yourself?You could try viral marketing and get some photo and videography services for your marketing campaigns.
- Set up KPIs and a long term goal.
- Decide on how you would handle bad situations like an economy collapse or not having enough money.
- Is there a tuition teacher shortage currently and is it predicted to escalate or improve in the future?
- Think of the tuition fees that you will price your tuition services at. Usually people price it based on subjects or on the reputation of the tutor.
- Create financial projections while including the best and worst case scenarios.
- Staffing requirements and how much you’re supposed to pay them according to market prices.
Qualifications Needed For Starting a Tuition Centre
Depending on your own educational qualifications, you can teach children of several age groups, and even young adults.
Graduates in the humanities can easily provide tutoring services in subjects such as English and social studies; those from the sciences can tutor in maths and science – both across primary school up till 12th Standard.
Postgraduates can even run classes for college-level students appearing for competitive examinations. However, you don’t need to let your qualifications (or even lack thereof) limit you when it comes to the subjects you tutor in!
What really matters is your subject knowledge and your ability level when it comes to determining what subjects and age groups you’d like to tutor.
Knowing an additional foreign language (such as French, Spanish, German, and even Japanese) adds value to your centre’s services.
If you’re looking to set up a large-scale centre, you can apply the same principles in hiring the staff you’ll require to teach larger batches of students.
Setting Up a Tuition Centre at Home
If you’re looking to a start your tuition centre relatively low-key, your own home is the best place to set it up. Assign a room that’s free from distractions like the TV, sounds of traffic, pets, and other members of your family.
The room needs to be large enough to fit a good-sized table that seats a maximum of eight people. You’ll naturally also need sturdy, but comfortable chairs for your students. Keep a box of pens and other stationery at hand too – you’ll need it!
For large-scale centres, you’ll either need to rent a space, or convert any additional property you have to accommodate larger batches of students. How much of it you’ll require depends on the size of your intended centre.
You also need to factor in enough space to include washroom facilities. Remember to check with local building authorities whether you need special municipal permits to set up your centre – these vary from city to city.
Larger-scale centres, apart from basic furniture and stationery, also require storage spaces, cupboards/lockers, and whiteboards or blackboards for individual classrooms.
Don’t forget you’ll also need staff. How many depends on what you’re going for, and how many batches an individual instructor is trained to handle.
Publicise and Advertise Your Home Tutoring Services
After setting up your business, you need to make yourself known. Approaching friends with children is a good start. You could also post a notice or spread the word in your building, housing society, and the general neighbourhood.
An advertisement in the paper is another option, albeit a slightly pricey one depending on the city you live in and the publication.
Get in touch with other tuition teachers in your area; you might think they wouldn’t want to help out their potential competition, but you’ll actually often find they have far too many students to handle on their own.
Go digital, too! Social networking sites are a great way to market your business – create groups and pages on the Internet, and get all your friends and contacts to join in on the campaign!
Larger-scale centres could benefit greatly from a dedicated website of their own.
Growing Your Home Tutoring Business
You might notice a snowball effect after your first few batches of students. Children and parents tend to recommend specific tutors to each other, and after a month or two, you could find you have a lot of interested parents and students interested in enrolling.
If your centre consists of just you, the key to handling this is to always keep batches small (6 students at a time, max) so that you can really keep your quality up, and to schedule these in a realistic and practical manner.
For larger-scale centres, a larger number of students is only good news, but it’s best to keep batches limited to 20 for optimum results. As time passes, you can add more staff if you needed, or even tweak your schedules.
How much should you charge? Well, it depends on several factors: the subject(s) you teach, the area you live in, the age and grade level of your students, and even which school board they study in!
It helps if you ask around as to what other tuition teachers charge in your area – stick to the average rate to begin with. You can increase your fees with new batches later if necessary!
For larger-scale centres, it’s worth noting that you will need to inflate your student fees in order to cover both the overhead and your staff’s salaries.
You’ll also need to create a separate bank account in the name of your centre to keep your accounting and finances legal and hassle-free.
The pricing decision is an important one when starting a tutoring business and it requires a bit of market research. Tutoring rates vary widely depending on who you’re teaching, which subjects you’re teaching and where your business is located. Some independent tutors charge as low as RM15 per hour and some tutors in big cities can charge as high as RM100 per hour. Of course these are extremes, but it just proves the point that there is an enormous range of prices in the tutoring market.
If you have already determined the geographic area your business will service and you’ve decided on the subjects and students you will be teaching, it’s pretty easy to gauge the market price for your tutoring services. Simply find out the rates of other tutoring services in your area targeting the same types of students. You might be able to find their rates on their website, in advertisements or you might need to call them and ask what their hourly rates are.
Once you have gotten the rates from a handful of tutoring services you will have a much better idea of how you should price your own.
The price you set will not only impact the profitability of your company, it will also communicate the value of your services. If you price too low you may attract a lot of students, but your profitability will be hurt and you will have difficulty financing further advertising and attracting high quality tutors. Pricing too low can also cause some people to think your tutoring services are of low quality.
Pricing too high without evidence of why your services deserve such a high price and you will generate very little interest. After you have established an impressive track record you can begin raising your prices.
The ideal starting price is probably slightly above the average rate in your market for your target students. This pricing is competitive and will generate a large response from potential students that are not overly price sensitive. It will also allow you to generate a reasonable profit which will cover your marketing expenses and enable you to pay high enough wages to hire quality tutors.
Running a Successful Home Tutoring Service
Running a tuition centre is a low-stress-level enterprise – you won’t find students exhibiting the same sort of discipline issues they would in a classroom. It would help, though, if you read up a bit on basic behaviour management before taking the plunge.
Be a stickler when it comes to punctuality – one late batch is all it takes to throw an entire day’s timetable off-schedule!
Decide On A Name
The next thing you should do after determining that this business venture is worth it, is to brainstorm and come up with a killer name to stand in the tuition centre crowd. Before that, go online and make sure that no one else has the similar name or a similar sounding name so that your customers won’t get confused. It’s also important because you can’t register for a company that has the same name as another registered company.
People also say that the name of your business plays a huge part on the success of your education center. It is the first impression everyone gets before the find out what exactly it is that you do. The name is extremely important so make sure it’s well thought out and unique.
Incorporate Your Business
Malaysia is now very strict when it comes to the registration of business entities. This is because they prefer to go about doing things by the book. Which is great because it allows for a streamlined system and everyone knows what you’re doing. There is no way of going around the rules and running your business quietly.
As a new entrepreneur we would suggest you register your business as a sole proprietor. Unless you have already racked in investors. It is a private limited company and legally this is the best way to register a business of this sort.
Determine the geographic area you will cover
If you are not starting an online tutoring business you will need to select a geographic area to market your services to.
One of the first steps in establishing a tutoring business is deciding on where you will conduct your sessions. Will you work from home, or will you go to your students’ houses? Working from home can have a great many advantages; you won’t have to spend money on travel costs and you’ll be able to fit in more sessions each day. On the other hand, parents of younger children may prefer that tuition takes place under their own roof, especially if they don’t know the tutor well.
The geographic area your tutoring business will cover is dependent on a few variables. First, if you are operating from a single location or your own home you need to consider how far students will realistically be willing to drive. In most cases students won’t want to drive more than 30 minutes so you should calculate an approximate radius around your tutoring center and focus your marketing in this area.
If you will be providing tutoring services in student homes you have a bit more flexibility and can probably cover a larger territory, but you must factor in the amount of time that will be spent commuting and the cost of transportation.
Determine what subjects and age groups you will teach.
There are a couple factors you need to consider when determining what kind of subjects your business will cover.
First, you will want to teach subjects where there is enough total demand to generate enough revenue for your business. For instance, a subject like math or English will have high demand in most markets whereas tutoring in a computer programming like Python will have much less total demand.
Second, you will want to teach subjects for which you specifically have the necessary knowledge and education to teach or you have access to tutors with this knowledge and education who can teach for you. Again, it is typically easier to find teachers for subjects that are more common such as Math, English, Reading, Science, etc.
Finding Suitable Premises
Once you’ve incorporated your tuition centre business, this is where the real work starts and everything is at stake now. Before advertising your company and before you start enrolling students you need to get a few tasks out of the way first.
The first would be finding suitable premises. You would already have the general area you would like to set up shop but now you should look at classifieds and get a feel of the type of building you would want. Only certain buildings can be used for educational purposes so it’s best to check with the local authority first before leasing the building.
Secondly would be to hire a tuition teacher(s). Hiring a tuition teacher is extremely important to start up a tuition centre. This is quite obvious. But you can’t be the only tuition teacher in the school teaching the students. You could go online and start posting jobs to look for educators to fill in the spaces as tutors for your education center.
Research and planning
The first thing you need to do before starting up your tutoring business is decide on what subject areas you’re going to teach in. This decision will most likely be based on your degree subject or A-level choices, depending on the age and level of the students you want to teach. Obviously the higher level of qualification you have, the higher level you will be able to teach, which in turn will provide you with a wider age range of students.
Planning is critical to the success of a tutoring business, and you’ll need to invest a lot of time in to creating study plans that are tailored to the needs of each of your students. This will help to build your confidence as a teacher, whilst giving parents and their children a clear insight into what they will gain from your sessions.
Get the right equipment
Once you’ve decided which subject – or subjects – you’re going to teach, it is important that you familiarise yourself with its curriculum and exam papers. In this way you can ensure that you tailor your sessions towards the content of what your student will be assessed on.
Other materials you’ll need include the most up-to-date textbooks you can find, as well as stationery and basic IT equipment. You may also want to invest in professional stationary such as business cards and letter heads, both of which will help you to establish yourself as a reputable and professional service.
The main way that people will hear about your tutoring business is through word-of-mouth recommendations, so maintaining a good reputation among your clients will be paramount to the success of your business. This means being committed to the success of each individual pupil and giving them the best experience possible, so don’t take on more students than you can realistically handle. To back up your reputation, ask any previous clients for references, but don’t worry if you’re only starting out; you could still get references of your ability from lecturers or teachers.
As well as gaining clients off the back of your reputation, you can promote your business through notices on boards in local schools, libraries and in the newspaper. Sending a letter to your local education authority may also be worthwhile as they could refer you to parents looking for a tutor. You may also want to consider setting up a website for your business, so that parents in the local area can easily find you.
Online Marketing and Social Media platforms can be excellent ways by which you can promote yourself. Getting to know how to correctly advertise in Facebook or Google can create powerful boosts for your business, and there are a number of companies that will teach you exactly how to do this, no matter what Industry you choose to start a business in.
To work out how much you need to charge for lessons, try contacting other tutoring agencies & tuition centres and ask how much they charge. Within the range of prices they give, you should try to set yourself somewhere in the middle. The reason for this is that people are unlikely to hire you if you’re expensive but don’t have a reputation to back up the high fee, whereas pricing yourself too low may indicate a poor quality service to potential clients. As you develop a positive reputation, you can start to charge higher rates for new students.
As with any company, it is essential that you keep track of your income and any expenses you incur, either through your own records or using online accountancy software. You will also be able to claim expenses for on things like internet bills, travel expenses, office supplies and advertising, for tax-relief purposes.
Promote your business
Promotion is probably one of the most important elements of operating a successful tutoring organization. Providing excellent tutoring services are very important, but without effective promotion you will be requiring on word-of-mouth to promote your business which builds slowly over time. This may be fine if you are an independent tutor, but if you are starting a tutoring business with multiple tutors it is important that you adopt a variety of promotion methods.
Typical methods for promoting a new tutoring business include introducing yourself and your tutoring services to people in schools who interact with students looking for tutors such as guidance counselors. You will also want to drop off brochures and put up posters in areas where a large number of students and young families visit. This includes school guidance and student services offices, community centers, public libraries, sports arenas and possibly certain coffee shops if you’re targeting university students.
Online advertising is another effective and affordable method for promoting your business. You should first set up a business website that contains your contact information, information about the area your business services, the subjects you tutor and a sign up form for interested students. Many blogging services offer free website hosting and website themes that are suitable for tutoring businesses.
You will also want to submit your business to online directories such as Google Places which offers free business listings and appear whenever people search for local results matching your business.
Tutor Directories are specifically for independent tutors and tutoring agencies. These sites attract a highly targeted audience of people looking specifically for tutoring services. Some tutor directories require a fee, but others are free.
Google AdWords is an online advertising platform that allows you to place text adds alongside search engine results and on websites with related content. The great thing about AdWords is that you can target people looking for tutoring services as well as target people in a specific geographic area.
Other forms of advertising include newspaper classifieds, direct mail, telephone directories and other forms of print. These methods can be a little more expensive, but sometimes they can produce excellent results if done correctly.
Set up the administrative portion of your business
The four sections above addressed the marketing portion of your business, but you also need to prepare the administrative aspects of your business. The more organized you can keep the administration of your business, the more time you can focus on managing and growing your business.
There are several things you need to keep track of in order for your business to function smoothly.
It’s important to keep records of student contact information, subjects, lesson notes, progress reports, etc. You should keep a file on each student containing all of their information that you can easily access and update. Tracking this information will improve communication and allow you to track and share progress with students and parents.
As you take on more students and if you are managing multiple tutors, keeping track of schedules can become confusing very quickly if you aren’t organized. You should have a dedicated calendar that allows you to keep track of all student lessons and can easily be updated when lessons are cancelled or rescheduled.
You can choose from a variety of billing methods when you operate your tutoring company, but there are a few methods in particular that will simplify the billing process and ensure that you are paid for your services. One method is to have the student pay each lesson either before or after the lesson. This method is good because there is no delay between providing the tutoring and receiving payment so you don’t have to worry about collecting payments for past lessons.
An even better option is for students to pay for 5-10 lessons up front and when they have used up their lessons they can pay for another block. This method allows you to record the payment once and then not have to worry about collecting a fee for each separate lesson.
Tracking Revenue and Expenses
It’s important to keep accurate records of your lesson revenue and your business expenses. You will need this information when you complete your taxes and it’s extremely important information for evaluating your business performance throughout the year. Lesson fees should be recorded as the lessons are completed. Expenses can be recorded as incurred or you can save your receipts and record them once a month.
Depending on how professional you want your business to appear you may want to generate monthly or quarterly invoices for your customers. Invoices should list all lesson fees, additional fees or credits and payments received.
Depending on the size and complexity of your business you may be able to stay organized with a regular calendar and excel spreadsheets. However, if you have a larger tutoring business with multiple tutors you may want to invest in a system specifically designed for tutoring business administration that will save you time and make your business appear more professional.
Operate and Improve your business
The final and most important part of starting a tutoring business is actually going out and operating the business. This is the exciting part where you get to finally put your plan into action. As you operate your business you’ll find that many things don’t work out the way you expected them to and that’s fine. The important thing is that you quickly adapt to find a solution to any problems you face. Pay attention to what works well and what problems can be eliminated. Through a process of continuous improvement your business will become more effective and successful.
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