Interested in getting into the education business?  My name is Jared Wells and I’ve owned and operated a tutoring and test preparation company since 1994.  I’ve also consulted to educators around the world ranging from people new to the business, companies doing over ten million dollars in annual revenue, and tutoring and test preparation franchise corporations.  I’m also the co-founder of, a comprehensive web-based student information management system.

In many ways, I’m uniquely qualified to help you get your business started.  If you already have a tutoring or test preparation company, then I want to help you to make it more successful.

What does the tutoring and test preparation business look like?  Where are the opportunities?

Before we dive into the how-to of running a tutoring and/or test preparation business, I first wanted to discuss different business models associated with tutoring and test preparation.

While the individual practitioner is a viable option, we are not going to discuss that model in detail here.  Instead, we are going to look at models that can scale into a business with real value.  They are marketplace, broker, hybrid and full service.  On one end the focus is on economy and at the other end is service.  Before you start your business, it is essential that you know what kind of business you want to start.

In this post I’m going to start with the marketplace model.


Example:  Wyzant

In the marketplace model, the business attempts to attract both students and instructors and allow the two to connect.  These services provide tutor profiles and often student and parent generated ratings and reviews.

Pros from Owner’s Perspective

Lower on-going overhead costs.  The students, parents, and instructors are carrying most of the administrative load.  This includes understanding the problem, finding the right instructor, dealing directly with the instructor on scheduling issues, and finding replacements when the instructor is no longer available.

Cons from Owner’s Perspective

This model requires a large roster of instructors and enough students to keep those instructors busy.  This means that marketplace businesses must have significant start-up capital to attract both students and instructors.  Without direct instructional oversight, it is difficult to ensure quality of service.  So customers are less loyal as they have not created a direct personal relationship with an administrator.

Pros from Student/Parents’ Perspective

Cost.  A few DIY students and parents might be attracted to the ability to review profiles and engage directly with the tutor.  However, most of these clients are looking to save money.  Lower cost is the driving force behind the marketplace model.

Cons from Student/Parents’ Perspective

Service.  Parents and students are busy.  They are short on time and often don’t feel confident that they know the cause of why the student is struggling.  Lack of access to a knowledgeable administrative counselor means that the parent has to assume part of the problem solving role.  This means finding and trusting the right tutor.  It also means finding a new or substitute tutor when a regular tutor is no longer available.

In summary, the marketplace model is a big play.  There are a number of large and well funded companies coming online with this model.  So unless you have deep pocket expertise, this is not likely the model for you.  The good news is that there is quite a bit of room in the market for higher end services that required much less capital to start.

Next Up:  The Broker Model