Do I Need To Be Talked Out Of This?

[dr_pretentious]

A friend has suggested that we might start a tutoring business together. She's got the math and science chops, and an almost-finished dissertation in an Ed.D. program, so we could be full-service shop. With the right office space in, say, Highland Park, I wouldn't have to drive all over the place to make house calls. Highland Park is full of grad students who are used be being paid starvation wages to tutor at the university, and the university budget cuts are leaving some of those folks with no way to pay the rent at all, so it would be easy to cherry pick experienced hourly employees at a significantly better wage than they're used to getting. Highland Park is also full of prosperous parents who are ambitious for their children, parents who are falling all over themselves trying to find a way to fill the gap between what the schools can do and what their kids need.

Could it possibly take more time to run a tutoring business in one spot than I'm currently spending driving from client household to client household? Am I delusional to think this could be a good plan?

Anyhow, S and I aren't going to do anything rash about this. She's waiting to find out if the university will reappoint her on a budget line with health insurance, which she should know around April, and I'm still neck-deep in the March Writer's Weekend event. Oh, and I expect to be significantly under the weather for at least another week. Meanwhile there are plenty of brass tacks questions to investigate. How much does a square foot of non-storefront office space a block off the main drag in Highland Park cost per month? What kind of insurance do you need for a business that involves having other people's minor children on premises without their parents? That kind of thing.

Comments

[harlequinaide.livejournal.com]

Wow. I can't help wondering -- from what you can see -- how efficient are the office administrator's 12-hour days?

Sorry, that was confusing. The OA works from 1-8pm, primarily doing scheduling, which involves putting students with every tutor (a total of thirty-four one hour slots, every week), calling every student to remind them to show up and calling every tutor to tell them their hours for the next day. He also handles the phones, which ring constantly with new clients or last minute schedule changes; oversees the students who are there but aren't being tutored (because they're waiting to start or to be picked up), which means he's constantly baby-sitting; writes correspondence; scores disgnostic tests; and keeps the daily life of the office running.

The person who works 12 hours days is the woman who owns the company. She does the billing (including the parents who don't want to pay or want to fight over their bill), hires new tutors constantly due to turnover (part time businesses all have this kind of turnover), handles marketing (considering how seasonal the work is, marketing is never-ending), manages payroll (for twenty employees, all working different part-time schedules and whose hours need to be balanced against whether or not their students have paid for those hours), maintains relationships with the local school districts and holds discipline meetings with parents, students and tutors. There are more things she does that I'm not remembering right now.

It's not just bills and marketing, sadly, and it's far more than 1-2 hours of employee related stuff. I hope this helps; I think its that a part-time tutoring firm is different than a full-time business with a regular schedule. There is a lot more hands-on work.

[dr-pretentious.livejournal.com]

Thank you for laying out such a comprehensive breakdown of what it would take. When S and I next meet to make lists and charts and doodles in our quest for a decision, I'm going to have hard copy of your replies in my hand, so we can figure out how we would get all those tasks done.

I worked briefly for a tutoring company of about the same size as the one you're describing, and the proprietor there was approximately as harried. But then, my boss was so problematic as a teacher and as a human being (she was an habitual, unrepentant liar who was verbally abusive with the students and her office manager), I figured most of her management problems were results of her personal folly. In light of your description of your boss's work, it sounds like the position accounts for more of my boss's stress than I had imagined.

After talking to a local friend who has a small photography business, I'm pretty sure I would hire an accountant who would handle payroll as well as taxes, which would add to the overhead but, hopefully, reduce stress a bit.

As a freelancer, I've seen how the student turnover is high--a kid who comes to prepare for the SAT then takes the SAT and moves on, a kid who needs help figuring out his college applications gets into college and moves on. And summers, winter holidays, and final exam weeks can be pretty lean. Would you say those fluctuations are better or worse when you have several people working in the same shop? The tutoring business where I used to work handled the summer slump by offering intensive courses. Their grammar crash course raked in the bucks. What does your employer do during summers?

My old boss charged $120/hour and paid the teachers $21, and that in a town much less prosperous than the one where you work. Somehow, the market bore it. She always had more students than she could retain enough employees to teach. Right now, I'm charging $60/hour for face time, but when I add up the driving, the wear on the car, the gas, etc., for all practical purposes I'm making half that. It's still better than the going rate for copyediting, but not by much.

When you've considered starting a business like this yourself, what were the benefits in your cost/benefit analysis?

[harlequinaide.livejournal.com]

Thank you for laying out such a comprehensive breakdown of what it would take.

It's my pleasure; I'm enjoying thinking deeply about this. I think you'd be great at this, fwiw.

$120/hour seems excessive. It's interesting that the market bore it, but still... my college students aren't paying that much per course! (To be fair, they pay $60 and I make about that, but 1:1 is different.) It does sound like your boss was abusive, regardless of the pressure. My own boss was more like a mother: instead of yelling she would say, "I've very disappointed in you," and shake her head sadly.

For me, the cost/benefit was all about not driving all over creation. If rental spaces are cheap and you don't have too many employees, I think this could be fine. Hiring an acountant would help a lot (my boss has been burned, once by a former office manager and once by a former business partner whom she bought out, and doesn't trust other people to handle the money). Also, being my own boss was attractive, for a few minutes. I decided not to do it because I have no interest in running a business; it's teaching that I love.

The summers were awful. We did week long intensive camps, offerered "Buy 2 hours get 1 free" deals (the free one happened on Friday, because Friday was always dead, anyway) and ran chess clubs. One thing that I wanted to do but we never got off the ground was to run courses targeted at the reading lists of local high schools. A class of three football players who otherwise aren't going to read their summer reading would have been something of a cash cow, I think.

The value of staying in one place for five hours and having the students come to you can not be over-stated. If you're in this because you love tutoring (and not because you want to run a business), my advice is this:

1) Keep it small. Don't hire too many employees, or you'll end up spending all your time on them and none on teaching.

2) Establish relationships with local high schools. They can't recommend one tutoring place over another, but the guidance office can (and does) maintain a list of local facilities, and if parents ask they provide it. Also, one of our biggest programs was a yearly HSPT prep class at a local high school, geared towards people who wanted to get in there. It worked for them and built our customer base. Also, if you have a relationship with the school they will often give you the reading lists. This is a huge help in planning out curriculum.

3) Prepare to do test prep. About half our business was test prep, and that's only going to get bigger. People need it year round, and parents will tell their friends, so that even when one student is gone, her younger brother and best friend will sign up.

4) Any new business loses money for the first three years (according to what I've read), and they eat up pretty much all of the owners' time, especially in the beginning.

That's it. Like I said, I could see you being great at this, and I don't want to be all doom and gloom. If my boss didn't love it, she would have shut the place down years ago.