Your executive summary is the first part of your business plan, but you usually write it last because it is a summary of all the important parts.
The point of your Executive Summary is to get the reader’s attention quickly. Tell them what kind of tutoring business you run and what stage it is in. For example, are you just starting out, do you have a tutoring business that you want to grow, or do you run a network of tutoring businesses?
Next, give an overview of each part of your plan that follows. For example, give a short summary of the tutoring business. Talk about what kind of tutoring you can do. Detail your direct competitors. Tell us about your ideal customers. Give a brief overview of your marketing plan. Find the important people on your team. And explain what your financial plan is.
In your business analysis, you will explain what kind of tutoring you offer.
For instance, you could run one of the following:
- Exam prep: This type of tutoring company helps high school students, college students, and recent college graduates prepare for college entrance exams like the SAT, ACT, GRE, and so on.
- Primary school tutoring focuses on helping students in grades K through 12. Most of the time, this kind of tutoring is about a certain subject, like math, literature, history, etc.
- Occupational and advanced academic tutoring: Some agencies may specialize in getting people certified for jobs as engineers, mechanics, technicians, etc. before they start working.
In the section of your business plan called “Company Analysis,” you need to explain more about your business than just what kind of tutoring you offer.
Answers should be given to questions like:
- When did you start your business, and why?
- What important steps have you taken so far? You could use placement goals, the number of new contracts, etc. as milestones.
- Your legal structure. Are you set up as an S-Corporation? An LLC? A single-person business? Tell us about your legal structure.
In your industry analysis, you need to give an overview of the tutoring business.
Even though this may seem pointless, it has more than one use.
First, learning about the tutoring business makes you smarter. It gives you a better idea of the market you are in.
Second, market research can make your strategy better, especially if it shows you what the market trends are.
The third reason to do market research is to show your readers that you know a lot about your field. You do just that by doing the research and putting it in your plan.
In the industry analysis section of your tutoring business plan, you should answer the following questions:
- How much money does the tutoring industry make?
- Is the market going down or up?
- Who are your main rivals in the market?
- Who are the main market suppliers?
- What changes are happening in the field?
- How fast is the industry expected to grow in the next 5–10 years?
- How big is the market that matters? That is, how big of a market do you think your tutoring service could have? You can figure out such a number by figuring out how big the market is in the whole country and then applying that number to the population in your area.
In the section of your business plan for tutoring called “Customer Analysis,” you must describe the customers you serve or expect to serve.
Elementary school students, middle school students, high school students, etc., are all examples of customer segments.
As you might expect, the type of tutoring you offer will depend a lot on the customer segment(s) you choose. Obviously, high school students would want tutoring in different subjects and respond to different marketing campaigns than people who are getting their professional certification.
Try to figure out who your ideal customers are based on how they look and how they think. In terms of demographics, talk about the ages, genders, locations, and income levels of the people you want to serve. Most tutors work mostly with people in their own city or town, so it’s easy to find demographic information on government websites.
Psychographic profiles explain what your target customers want and need. The better you can understand and define these needs, the easier it will be to get customers and keep them coming back.
In your competitive analysis, you should list your business’s direct and indirect competitors and then focus on the direct ones.
Other tutoring services are direct competitors.
Indirect competitors are other options that customers can choose from that aren’t direct competitors. This can be done with peers, teachers, or graduate students. You need to talk about this competition to show that you know not everyone who needs help with improving grades and studying for tests will hire a tutoring company.
Regarding direct competition, you should list the other tutors with whom you are in direct competition. Most likely, the tutoring services closest to you will be your main competitors.
Give an overview of each of these competitors’ businesses and list their strengths and weaknesses. Unless you’ve worked at one of your competitors’ companies, you won’t know everything about them. But you should be able to find out key facts about them, such as:
- What kind of clients do they work with?
- What kind of help do they give?
- How much do they charge (high, low, etc.)?
- What can they do well?
- What do they do wrong?
For the last two questions, try to answer them from the customers’ point of view. And don’t be afraid to ask the customers of your competitors what they like and dislike about them.
The last part of your competitive analysis section is to list the ways you are better than your competitors. As an example:
- Will you provide superior services?
- Will you offer things that your competitors don’t?
- Will you make it simpler or quicker for people to use your services?
- Will you treat your customers better?
- Will you price things better?
Think about how you will do better than your competitors and write them down in this part of your plan.
Usually, a marketing plan has four parts: the product, the price, the place, and the promotion. Your marketing plan for a tutoring business plan should include the following:
Product: In the product section, you should go over the type of tutoring you described in your Company Analysis. Then, explain what courses or help with specific subjects you will be giving. For example, in addition to high school math tutoring, will you also help people prepare for the GED, or will you focus on helping people get ready for a specific type of certification?
Price: Write down the prices you’ll be charging and how they compare to those of your competitors. In your marketing plan, the product and price sections are basically where you list the services you offer and how much they cost.
Place: This is where your tutoring services take place. Write down where you are and how that will affect your success. For instance, is your tutoring office near a high school or a shopping district? Talk about how your location could attract a steady flow of customers.
The last part of your tutoring marketing plan is the section about promotions. Here, you’ll write down how you’ll get people to your location (s). Here are some ways you could promote your business:
- Putting ads in newspapers and magazines in your area
- Going to schools and talking to teachers
- Contacting local websites
- Social media marketing
- Local radio advertising
In the other parts of your business plan, you talked about your goals. In your operations plan, you talk about how you will reach those goals. Your plan for operations should have two separate parts.
Everyday short-term processes include all of the tasks you need to do to run your tutoring business, like serving customers, attracting students, processing paperwork, etc.
Long-term goals are the goals you want to reach in the future. These dates could be when you want your 100th student to improve their grades or when you want to make $X in sales. It could also be when you expect your Xth student to do well on a certain test or when you expect to open a new location.
A strong management team is essential to show that your tutoring business can work as a business. Showcase the backgrounds of your key players, focusing on the skills and experiences that prove they can help a company grow.
You and/or the people on your team should have experience teaching or tutoring. If so, talk about your experience and skills. But also highlight any experience you think will help your business succeed.
If your team is missing something, you might want to put together an advisory board. A two-to-eight-person advisory board would help your business in the same way that a mentor would. They would help answer questions and give advice on how to plan. If you need to, look for advisory board members who have taught or run small businesses successfully.
Your 5-year financial plan should include a monthly or quarterly breakdown for the first year, then an annual breakdown after that. Your income statement, balance sheet, and cash flow statement are all part of your financial statements.
A more common name for an income statement is a Profit and Loss statement, or P&L. It shows your income and then takes away your expenses to show if you made a profit.
You need to make assumptions in order to make your income statement. For example, how many students will you tutor each week? And will sales grow by 2% or 10% every year? As you might expect, the financial forecasts for your business will be greatly affected by the assumptions you choose. Do as much research as you can to try to make sure your assumptions are true.
Balance sheets show both your assets and your debts. Balance sheets can have a lot of information, but try to boil them down to the most important parts. For example, if you spend $50,000 to set up your tutoring office, you won’t make money right away. Instead, it is an asset that you can use to make money for years to come. If a bank gives you a $100,000 check, you don’t have to pay it back right away. Instead, you will have to pay that back over time.
Cash Flow Statement: Your cash flow statement will help you figure out how much money you need to start or grow your business and make sure you never run out of cash. Most business owners and entrepreneurs don’t realize that you can make money but still go bankrupt if you run out of money. For example, let’s say a company offered you a $100,000 contract to help employees get certified, which would cost you $50,000 to do. Well, in most cases, you’d have to pay that $50,000 now for things like curriculum, employee salaries, etc. But let’s say that the company took 180 days to pay you. During that time, you might run out of money.
When making your Income Statement and Balance Sheet, make sure to include some of the most important costs of starting or growing a tutoring business:
- Location build-out, which includes construction, design fees, etc.
- The cost of things like software, office supplies, and so on.
- Payroll or wages given to employees Business insurance
- Taxes and licenses:
- Legal expenses