“So how do I get a stable internet connection on the yacht?” says the student, “leave it to me, I know just what to do” says the super tutor.
As the private tutoring industry has grown over the past generation, so too have the tales of those lucky individuals that have profited most from this rise. From stories of famous tutors in South Korea and Japan earning one million dollars a year to tutors in London earning £1,500 an hour to prepare students for entry to the most competitive private schools, the tutoring industry, like any other, has its top earners.
Do not be fooled; this will require hard work and determination. However, if the tales are true, we can take some confidence that this goal is achievable. If you are striving to be the next super tutor, follow this checklist and you might just make it. Starting with “the essentials”, I have then set out two different directions in which tutors can take their careers: scale to cater to the masses or become an elite product to cater for those willing to pay a premium for the best.
To reach the top of the tutor pay tree, you must:
In order to generate this kind of income, you must become sought after. In order to become sought after, you must do a great job from the get-go. Client referrals are your most valuable form of marketing, after all. Here at Owl Tutors, we only work with exceptional tutors; qualified teachers with at least two years of teaching experience who pass our rigorous competency based assessment. We believe our tutors are the best, so if you are already working with Owl Tutors, you can tick this off the list!
Being a full-time professional tutor will generate significant amounts of administration. From lesson planning to invoicing and cash collection, the more work you generate, the greater your admin burden will become. In order to make the greatest return on your available time you will need to dedicate as much time as possible to tutoring and as little as possible to admin. If your tuition business starts to take off you will need to consider hiring a personal assistant, working with an agency or running your own admin processing system to stop yourself being buried in paperwork.
Clients want to know that they are receiving the best service they can for their money, and rightly so. You must demonstrate that you are the best there is, either by having an incredible and verifiable track record of success or by being the one who “wrote the manual”.
So, you have the basics covered and are operating as a highly efficient, phenomenal teacher with a credible status. There are now two routes for you to choose from: scaling your operations so that you can provide your services to vast volumes of students at the competitive end of the market, or securing clients who are willing to pay for the best tutor that money can buy.
This road will involve working with as many students as possible but spending a minimal amount of time with each. The most effective way to do this will be through running group sessions with multiple students. This is typically how the celebrity tutors in Japan have achieved their astronomical incomes.
If you are going to go after as many students as possible it will be almost impossible to build relationships with any single one of them. You are going to need incredibly efficient processes so that your clients can purchase your services without having to interact with you directly. You are going to need an outstanding website to market your products and efficient and integrated database software to automate payments and student performance.
If you can fill out university lecture halls with hundreds of students hanging on your every word, that will be great. If you can get tens of thousands of students signing into your webinars, even better. What you will have to be however is a confident and effective public speaker with the skills to disseminate your message to a large audience for which you will struggle to differentiate.
If we assume that you can manage to get your students to part with $10 an hour for your sage-like advice, you will need an average of 125 students at any given time and to be teaching 800 hours per year to generate $1m.
The alternative route to scale is to be a premium service. It goes without saying that you will need to be an outstanding tutor with teaching skills and admin processing qualities that sit at the pinnacle of a competitive and crowded market place. Even if you are the best tutor out there, this will still not necessarily pave the way to $1m and you will need to reserve your services for those willing to pay a premium for them too.
A now-dated study that took place in 2012 calculated that there are 211,275 UHNW individuals on earth (individuals that have in excess of $30m of assets). These are the type of client that you will need in order to earn $1m from delivering one to one tuition as they are likely to be the people competing with each other at the top of the market for the very best tutors.
Finding one or two UHNWs will still not be enough to make this work. You will need to provide an outstanding service and build a great relationship with these families in order to cultivate other leads from their network of similarly wealthy families.
A famous brand of perfume was experiencing a difficult sales period and the company brought in a new boss to try to turn around their fortunes. He decided to lower the price of said perfume as due to his extensive knowledge of economics, he knew that a lower price would mean more demand for the product. After slashing the cost of the good by 50%, sales fell by 95%. His economic knowledge had let him down as he had failed to realise a key behaviour of his client base. They were not buying the perfume just because of its scent, they were also buying it because it was expensive! The perfume in question was what economists would call a Veblen good, a good whose demand increases as the price increases.
I am not suggesting that you will need to become a Veblen good yourself. The reason for adding this anecdote is that if you price yourself too competitively, you may never be able to reach the hourly rates of pay that will be necessary to hit the $1m. If we assume that you will possibly teach 800 hours a year (20 hours per week for 40 weeks of the year), you will need to charge $1,250 per hour in order to earn $1m. If we assume that the market price for a home tutor to be $20 per hour, this means that you will need to charge 62.5 times as much as the average tutor. It is possible that your services may start to have Veblen good qualities but this is only likely to happen if your service is also the very best there is. Your clients will require absolute confidence in your abilities to deliver exactly what they want, every time, without exception if you are to persuade anyone that you are worth 62.5 times the average tutor.
I started this article with a warning that although possible, earning $1m a year as a tutor will be challenging to say the least. You will need to be one of the best operators in a crowded and competitive market and have skills that a fortune 500 CEO would be proud of. Some things are highly improbable but in theory, nothing is impossible.