Recently, there have been lots of discussions going on around the monetary part of teaching on the Internet or being an independent tutor in general in the Edupreneurs Club. Being a recovering online coach myself I can absolutely relate to the problem of making a living as an independent educator. Yes, the economics of online tutoring are friggin’ hard.
The thing is this: I think many online tutors do not evaluate their underlying business model or, as one of the Club member put it, wonder if you are carrying buckets or building pipelines. My guess is that many tutors are carrying buckets with no bottom.
The following back of the envelope business plan is of course just one of many scenarios and you should run through this on your own based on what you would like to achieve with your independent tutoring service.
For this first scenario I assume that the tutor wants to earn €4.000 per month. This leaves enough room for taxes, health insurance and all other deductions that come along. Maybe she would also like to save some money for rainy days or her retirement. We also assume that our model tutor is somewhere in the mid-range when it comes to pricing, offering a 1h lesson for €25. As our tutor wants to have a family life, she only tutors from Monday through Friday which leaves us with around 20 working days per month.
Based on these numbers we can not only calculate how long she has to work but also how many clients she needs to acquire.
With a goal of €4.000 per month our tutor needs to teach 160 hours. Spread over 20 working days this means 8 hours of teaching every day from Monday through Friday which also means 8 clients a day.
If we assume that she has dedicated clients who take two lessons per week she needs to teach 20 clients per week.
Now, you can reflect on how this scenario is representative of your own teaching business and if you think this scenario is realistic at all. And there is more.
We also need to add some bumper time between the lessons as you cannot jump from one lesson directly to the other. If we take 15 minutes we need to seven of those breaks to the 8 hours of teaching which brings us to 9 hours and 45 minutes total hours of work.
Then you need to prepare for a lesson in some way or the other. Adding 10 minutes of preparation to each lesson (material research, correcting exercises etc) we end up with 11 hours and 5 minutes of total hours of work each day. I really hope our tutor has someone who takes care of the daily business at home.
In a five hour work week we would then come up to 55 hours and 25 minutes or 221 hours and 40 minutes per month. This also means that we are down to around €18 per hour in reality and probably dead by the end of three months working like this.
Besides the pure impossibility of working like that, I also don’t think that many online tutors actually have 20 students as paying clients. Also, two lessons per week are not the norm and what about cancellations or vacation breaks.
On top of that you need to offer a discount to loyal clients as they will order lesson packages, especially when they have two lessons per week. This means that the €25 per hour are more like €20 or even less depending on the discount.
Let’s quickly do a second run with a tutor who charges €40 per hour and see how this ends up.
With the same monthly goal of €4.000 she only has to work 100 hours per month, 5 hours teaching per day. This also means we are down to 12,5 clients per week.
Adding bumper (1 hour 45 minutes) and preparation time (1 hour 20 minutes) to the teaching time, we end up at 7 hours and 5 minutes per day. Though this sounds more realistic you need to take into consideration that as an independent online tutor you are also the one who is responsible for client acquisition. And at €40 per hour it is obvious that you need to ramp up your related services, as well. Like being more flexible with rescheduling and cancellations.
At this point it should be quite obvious that even as a top end tutor in terms of hourly rate you will just be able to keep your head above the water.
Online group lessons are also still not a viable option as far as I can see it as it tends to be difficult to find a reliable webinar platform that also offers a friction free way to charge for and manage classes.
I guess that’s why many tutors either quit or move on to more scalable business models like selling ebooks, self-directed courses or something to that extend.
While online tutoring is great to get your feet wet in the education space. It is not a viable business in the long term as you waste your biggest asset time for little pay that won’t get you nowhere in the end. It is better to invest that time and energy in creating and promoting a product or simply look for a classic 9 to 5 job.