Evan Carmichael advises a student tutor on growing a consulting business: start small, spend only after revenue comes in, and move from one-on-one sessions to group classes to earn more per hour. Create a branded methodology to charge higher rates, then scale by hiring tutors or expanding class sizes once you hit capacity.
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Hi, I'm Evan Carmichael. Welcome to another edition of Ask Evan. Today I'm going to answer a question from one of our readers whose name is Petrus, and he wrote in saying, "I've opened a consulting business and assisting students with their assignments, tutoring, research projects. I'm running it from home because I don't have enough funds to rent a classroom and an office." I want your assistance on how to grow this business. I have a passion to assist students who can't help themselves. With your assistance, I'll become a greater consultant. So thanks for the question, Petrus. Great question, and I applaud you for starting small, starting out of your home. It's easy to spend money, right? Anybody can go spend money. You can take out all your savings and go get an office and get a classroom and spend, spend, spend, and quickly be out of business because You spent all your money and you have nothing coming in. So I always recommend as much as possible to start small, bring in customers, slowly build that up, and then as you see that something's working, you can invest more money into it. So I hate spending money until I'm making money. So you're already on the right path with the right mindset. That's great. It's also awesome to hear you're passionate for it. A lot of entrepreneurs start a business just trying to make money and they don't have a strong passion for it. You really have to love what you do. 'cause you're gonna go through some major heartbreak and hurdles before you reach success. So you gotta have that passion for it to stick with it. In terms of your business, I don't know what level of students you're selling to. The student market can be really hard to sell to because a lot of them don't have the money. So you might end up trying to sell to the parents. If they're younger students, for sure it's to the parents. So slightly different customer. What I try to figure out is You could have your private one-on-one students, which is great, and there will probably be some upper limit on how much you could charge for it. You might want to consider going into getting groups of students together so it reduces the cost for them and it can also make you a little bit more money. So that can even be out of your home or it could even be out of a coffee shop if you get 3 or 4 students and then slowly try to build that up. For students, it's great because it can be repeat business. Right? So I don't know how long somebody stays with you for, but if they're going through university, you know, it could be 4 or 5 years. If they're going through high school, again, you know, 3 or 4 years going through that. So they could stay with you for a long time. You have to show that you care about them, that you're providing outstanding service, and a lot of times it'll grow through word of mouth, which is an awesome way to be able to build your business. But you have to give them something to talk about, right? You have to deliver results for them. They have to be seeing improvements. And they have to really like coming to you and feeling like you're really solving a problem for them. It's great you have the passion for it, that definitely helps. If you find ways to really go beyond, above and beyond, provide awesome service, you're gonna get them talking to their friends, to their parents, and coming back to you to keep signing up with you and, you know, bringing their colleagues or their classmates along with them. So that's one way to start growing it. You'll find that With a lot of service businesses like this, there is some upper end that you could charge for your prices, and at some point you will be tapped out. So it's, are you comfortable building this business as a one-man show and it's just you and you have your roster of 30 students? I don't know how many you can support. A lot of that is easy to grow through word of mouth. You know, you get some students, they tell their friends, you might do some, you know, flyers at the schools. But that is usually not too challenging to build up if you're providing a really good service. It may take a number of months to get it going, but the costs are low because you're running it out of home. It's a service-based business, it's just your time, so you don't have to spend a lot of money to build this business up. You'll get to the point where you're tapped out, you know, you can't handle more students yourself. You can try increasing your prices, which is a great strategy, and the more you can brand yourself as an expert and have a method So instead of just saying, "I'm gonna be tutoring you and help you with your assignments," you say, "You know, I have this 8-step process that I go through," and that's how you separate yourself from all the other tutors out there. So the Petrus way is to go through these 8 steps, and the more you can brand yourself and have that methodology, the easier it's gonna be for you to be seen as a greater expert and a better tutor than everybody else. So you need to find that way to separate and differentiate yourself from all the other tutors out there. So that'll help you start increasing your prices, but you'll still be at the point where you're doing everything yourself. So the question becomes how to expand beyond that. So your couple options: one could be the group classes, so you have multiple people in a room, and two could be to have a tutor under you. So is there a way to build this business and build enough margin into it so so that it could run without you being there. So, you know, you're charging X for your services and you have a tutor who you've hired who you're charging, you know, less to and you're making the difference on the profit. And that's a very common challenge for a lot of service-based businesses. It's a great way to get started because you're making money and you're not spending a lot of money, where products you have physical costs. But it can be really hard to expand it because it's still selling your time for money. So once you get past that point, you may get frustrated and you want to think about, "How do I build this beyond myself? How can I build a model where I have enough revenue coming in to be able to support another tutor, even part-time, so that I can build this business and continue to grow it?" Now you may not have that ambition, and maybe fine, you know, you want to have your roster of students, it's always going to be you, you're a one-man show, And that's great, and there's nothing wrong with that. Really, the secret to making that work is just providing awesome service, getting the word of mouth going, finding a way to separate yourself from all the other tutors, and doing some light marketing, even in the form of just some flyers at the school. And you should get enough people over a number of months to want to sign up with you and stick with you, right? If the students aren't staying with you, then there's a problem with your service. But once you get a student, hopefully they stay with you for a year or longer. Because you're providing awesome service, and they'll tell their friends, and you'll keep getting more people coming in. The bigger challenge comes in trying to expand the business beyond yourself and building a model where you can support having somebody under you and still be able to make enough money to support yourself. So hopefully it gives you a few things to think about. I love again that you're starting small, starting from home, keep the cost low, and that you're really passionate about this, and, and hopefully willing to go through all the hurdles that it's going to take to get that business to the next step. So thanks for watching everybody. If you liked the video, please give it a thumbs up below. Makes me wanna do more of these for you. And if you have a comment about this video or you have a question about your own business, feel free to leave it below. I always read those. I love seeing them. And I'd, uh, hopefully can make a video for you as well if you have a question. So thank you and we'll see you on the next episode. [MUSIC] [MUSIC]
