Creating a Successful Tuition Business Model

Creating a Successful Tuition Business Model

Tuition is a tricky business, in some cases, students may need to learn to a certain level and then leave your tutelage, in others, there may be a natural level of churn where people relocate or switch between different learning opportunities.

If you plan on making a sustainable income for yourself or perhaps for a larger service group then you need to consider a tuition business model that will work for your niche.

A crude explanation of a business model is that it’s exactly how you plan to make money.

So what is the story of your business and why will work?

Male Pupil With Teacher Playing Piano In Music Lesson

Tuition Value Proposition

A value proposition is a statement that explains the benefits that your students can expect when learning from you, as opposed to the competition.

It helps to identify your ideal prospects, school-age children taking music lessons to aid their creative development or young adults taking language classes to broaden their career options for example. How do the lessons that you offer bring value to these students?

Are you solving a gap in knowledge they’ll need or are you fulfilling a desire for a greater understanding? For your tuition business model you essentially need to answer the question: why? Swiftly followed by: why you?

Customer Relationships

Now that you’ve nailed down who they are and what they get out of learning from you, it’s time to think about your relationship with your customers, these are the students themselves and sometimes the student’s parents.

As important as it is to get new customers in, it’s vital that once they start with you, they remain a student for a reasonable length of time. The resources required to attract new customers is always higher than repeat customers, so every successful business needs to be able to retain their clientele, bar the expected level of churn.

Sometimes good customer service is enough and the students keep learning with you because you are good at your job, but it is often a good idea to give added value to help secure those customers.

Bundling

An example of added value to your customers, your music students need equipment so you could work with a local music shop to provide a discount for your students.

This will push business their way instead of their competition, and they in turn could offer free or discounted taster sessions with you to every customer. It would increase new business for you both and promote brand loyalty from those customers.

A girl waving at the camera at her online lesson, a potential customer from your online tuition business model

Revenue Streams

Diversity offers more stability for your tuition business model. If you help to prep children from the 11+ exam then you’ll have a lull in students and therefore income during the summer and early in the Autumn term.

If you offer summer school lessons for creative writing for example, then you have diversified your opportunities for income and avoided the natural seasonality of your initial target market.

NOTE: although it can be beneficial to have a few strings to your bow, there is also a danger of choice overload – if there is too much to consider then people buy less. Diversify where it makes sense to, not for the sake of adding options that do not give real value to your customers.

Competitive Strategy

No business exists in a vacuum. Your tuition business model should be shaped by the other businesses operating in your niche (or your geographic location if you’re teaching in-person lessons).

Consider what the competition is doing well, could you learn from them and implement this in your business? There is no sense in reinventing the wheel; if they offer 1-hour classes and they keep growing, whereas the business offering half an hour classes doesn’t do as well, you know which you should choose.

What are they doing that you can improve on? If you can’t see any flaws in their operation, perhaps get some outside perspective. Ask your students or their parents what they had hoped to get from a tutor and haven’t been able to find.

Fractionalisation

Are there a number of students from lower-income households that wouldn’t be able to afford solo lessons and aren’t being catered for elsewhere? Sell classes to more than one student at a discounted rate, if one on one tuition is £40 per hour, selling a two-person lesson at £25 per hour will appeal to those with a tighter budget and still make you more money.

Not only will they be unlikely to be able to afford lessons elsewhere, their lesson ‘buddy’ would also need them to remain in the lessons creating more reasons to remain a loyal customer.

Your Tuition Business Model

A popular business model at the moment is the click and mortar business model for tuition. Following on from the online lessons of the pandemic other businesses are finding success by offering a choice of online lessons and in-person lessons.

Now that you’ve considered some of the key elements of your business model you should have a good idea of how you’ll be making your money, whether it’s solving a unique problem or offering competitive tuition options.

While all of these details are fresh in your mind it’s a good idea to write them out into a business plan that you can refer to and refresh as the business develops.

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