No, tutors do not need teaching licenses, but you will definitely need to register your business. It is advisable you talk to a business attorney about the pros and cons of operating your business as a sole proprietorship, an LLC corporation, or an S or C corporation. Also, have it in mind that the money you take for tutoring is business income. It is expected to be declared on your tax return and the appropriate social security, state, and local taxes must be paid.
It is recommended that you talk to an accountant to understand how to track income and what needs to be paid when. Even though you do not need a teaching license, having teaching experience is helpful. It is also imperative to have at least a college degree or higher. Generally the higher the degree, the more money you can charge. Parents want to know that someone who understands the subject is in charge of their children’s tutoring.
According to experts, this business is more aligned to current and former teachers, which is why many teachers begin their tutoring business as a part-time job. You will be expected to be a people person, as most of the business involves direct, one-on-one interaction with others. It helps to be good with children of all ages, as they comprise the vast majority of your customers.
Furthermore, it helps to be organized and self-motivated: conducting tutoring as a full-scale business means managing many contacts, reaching out to local schools, and making sure you have enough time during each session for your various clients. The primary day-to-day activities of a home tutoring business involve conducting previously scheduled tutoring sessions.
In-between sessions, you will spend time reviewing client emails, brushing up on student progress, and corresponding with potential clients. You will also have to spend time seeking out online learning tools that you can pass on to your clients as a supplement to what they are learning from you and what they may be learning at school. Finally, the time between sessions can be a great time to work on advertising for your business.
With the coronavirus crisis disrupting business as usual worldwide, millions of people are exploring options for home-based businesses. If you have teaching experience — whether in a classroom or a more informal setting — starting a tutoring business from home can help you connect with students in new ways. Tutoring is a relatively simple business to start, but like any other company, there is a lot to legalities to consider.
Legal Requirement to Open a Tutoring Business in 2023
The core of a successful tutoring business is in the quality of your tutors and the success of your marketing efforts. In an industry where high quality word of mouth recommendations are worth their weight in gold, managing your reputation as a professional outfit and having the documentation to back this up is crucial. Nonetheless, here are some legal aspects of starting this business that you have to consider extensively.
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Legal Business Structure
Depending on your state, you will likely need a business license. This is a standard requirement that allows you to operate a business in your community. You can typically apply online. Aside from that, the first thing to consider when starting a business is what legal structure your business should adopt.
This has tax and other implications, so you should seek some advice about the best legal structure for your proposed business, be it a limited company, as a sole trader, or a partnership. It is best to start with something that you are going to be happy with for a while because to change it will mean creating new contracts and processes.
Background Checks And Referencing
Since your tutors will most likely have contact with school-age children, you should complete a criminal record check for every tutor that you bring on board, get a copy of their passport and proof of their legal right to work in the United States and any educational qualifications and obtain at least two references.
Note that you can then immediately recommend your tutors to clients in the full knowledge that they are who they say they are, that they are qualified to tutor in the relevant subjects and safe to be around their children.
Also, you should get every new tutor to sign a confidentiality agreement, sometimes called a non-disclosure agreement (NDA), particularly if you are targeting high net worth individual clients. This adds an additional layer of confidentiality and professionalism to reassure your clients. Tutors will often be teaching in the home environment and may come across personal information private to the family during visits to the house.
An NDA states that the tutor will not disclose any confidential information that the tutor receives in the course of tutoring or performing services with your agency. The NDA will be between you and the tutor, so some clients may want the tutor to sign one directly between them and the client too, but at least you have notified the tutor of their confidentiality obligations from the outset.
It is also very crucial to have a service agreement in place for tutors to sign either when they join your agency, or at the very latest when they are assigned to their first client. Are your tutors going to be independent contractors of your business or employees?
Are you going to pay them weekly or monthly? Do you require that your tutors are going to work exclusively or non-exclusively with your agency? Will they be responsible for paying their own tax? How much notice must they give you if they cannot attend a session etc?
Note that answers to all of these questions should be set out in an agreement signed by you (on behalf of your agency) and the tutor. You should get your agreement reviewed by a solicitor to ensure you have all bases covered. This doesn’t have to be expensive and will be a long term investment if you use multiple tutors.
Client’s Terms and Conditions
Even if it is just one trial lesson, you should always get your Clients to agree to your Terms and Conditions so enclose a copy of these in your welcome pack. Your terms and conditions will set out payment terms e.g. 30 days/ before the session, costs, confidentiality, cancellation periods, etc.
Depending on your market, have a ‘pack’ for schools and one for parents. You can get someone to review or prepare some Terms of Business for a couple of hundred dollars and you will be able to reuse them for each client, so it is a long term investment to get them right from the outset.
Have it in mind that there are some document generators online where you can produce terms and conditions of business, though it is indeed advisable that you have them reviewed by someone qualified to do so that you can ensure that terms specific to your company and the nature of your business are included. You can also include a copy of your NDA to illustrate to clients the fact that you take their confidentiality seriously.
If you plan to offer tutoring in your home or any other business location, check on the zoning requirements. These should be available at the local town hall. Some locations forbid commercial enterprises to run out of a private home or from some certain sections of the town. This is to reduce on-street parking and people coming and going from a location.
Note that such restrictions are put in place to keep residential neighborhoods quiet and the city well planned. If you are not sure about your location zone and what’s permitted, talk to someone at your town hall, town clerk’s office, or a local attorney.
If your location is not zoned for any business, even a professional business, you can still run a tutoring business. The local public library may be a great place to meet with prospective students. Many have small rooms set aside for studying and tutoring. Another option may be your local church, temple, or civic organizations if they have a building they rent.
Remember to obtain a copy of all the latest syllabuses so that you can easily access them. When you get a new client, you can then find out from the child’s school which syllabus they are studying for each subject and direct your tutors to the correct curriculum. This takes the work out of the tutor’s and the parent’s hands in having to research the correct syllabus and removes scope for mistakes or potential liability falling upon you or your tutors.
Social Media Policy
Although this might sound a bit odd to have a social media policy for a small business when you are most probably not going to be the next Facebook of tutoring! However, returning to the issue of your reputation, it is necessary to let tutors know that their social media posts are visible to the general public and therefore may be accessed by clients – and a seemingly harmless post to friends on Facebook or Twitter may damage their own and your reputation if wrongly interpreted by a client.
A social media policy doesn’t have to be a load of draconian rules on social media posting, but it is worth thinking about conveying a message to your tutors about what you expect from them in preserving both of your reputations so that they think twice before posting a naked/drunken photograph that could get into the wrong hands.
Most states don’t require certification to be a tutor. But if you want your tutoring business to be successful, you need to be qualified, knowledgeable, and skilled. The more credentials you have, the more value you offer your students — and the more you can charge them for your expertise.
Note that having a bachelor’s or graduate degree means you have sufficient knowledge in a particular field, but knowing how to teach that information effectively is a separate set of skills. Certifications are available through the American Tutoring Association, which requires either a bachelor’s degree or significant tutoring experience. The National Tutoring Association has different levels of certification based on your educational background and area of specialization.
When starting a tutoring business, there is a lot on your mind. It is completely understandable if you haven’t thought much (or at all) about business insurance for tutors. However, insurance is necessary for protecting your tutoring business. For instance, if you spill and drink on a student’s new laptop, the general liability coverage in your policy could pay for the repair or replacement.
Also, your professional liability coverage could reimburse you for legal expenses if a student’s parent claims you didn’t deliver on your contracted services. If you travel to meet with students outside of your location, you may need to add commercial auto insurance to your policy, as well. Personal auto insurance policies typically exclude the use of your vehicle for business purposes, which could leave you responsible for any financial losses.
Although you can easily put an ad in the local newspaper and find students to tutor, you should take your time to establish a location, proper insurance, licenses, and credentials before advertising your tutoring business. Of course, legal issues are important to avoid doing something illegal or getting into private law disputes.
Although you are acting as an intermediary or referral between client and tutor, the more professional you are, the more your clients will trust you and you will stand out against other online tutoring businesses.