How to Start a BAR Tutor Business

Start a bar tutor business by following these 10 steps:

1. Plan your BAR Tutor Business
2. Form your BAR Tutor Business into a Legal Entity
3. Register your BAR Tutor Business for Taxes
4. Open a Business Bank Account & Credit Card
5. Set up Accounting for your BAR Tutor Business
6. Get the Necessary Permits & Licenses for your BAR Tutor Business
7. Get BAR Tutor Business Insurance
8. Define your BAR Tutor Business Brand
9. Create your BAR Tutor Business Website
10. Set up your Business Phone System

We have put together this simple guide to starting your bar tutor business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.

Exploring your options? Check out other small business ideas.

STEP 1: Plan your business

A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:

• What will you name your business?
• What are the startup and ongoing costs?
• Who is your target market?
• How much can you charge customers?

Luckily we have done a lot of this research for you.

What will you name your business?

Choosing the right name is very important. Read our detailed guide on how to name your business. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.

What are the costs involved in opening a bar tutor business?

Launching a BAR tutor business requires very little starting capital. Your most valuable business asset is your legal knowledge and test-taking skills. Your startup budget will also include current testing and study materials, a computer, business insurance, and marketing materials.

Many BAR tutors elect to manage their business from a home office. This will significantly reduce your startup and ongoing expenses. As a result, you could launch your new tutoring business with a $1,000-$2,000 budget.

What are the ongoing expenses for a bar tutor business?

Much like the startup costs, ongoing expenses are directly tied to your business structure. A home-based business significantly reduces overhead expenses, putting more profit in your wallet. Your monthly home-office budget will closely resemble the business’s startup costs. It should include testing materials, business insurance, website maintenance, travel expenses, marketing, and continuing education.

As the business grows and you start to take on employees, payroll will be a large part of your monthly budget. To reduce those costs, consider hiring instructors on a freelance basis.

Who is the target market?

Your target market is law students who are preparing to take the BAR exam. While diversity is the key to any successful business, your initial focus should be on helping students in your home state. You can always expand to other states as your brand gains traction in the legal community.

How does a bar tutor business make money?

Your BAR tutor business will make money by charging a fee for your test preparation services. Many test prep businesses offer one-on-one coaching sessions and packages. This ensures every student has a positive experience and is set up for success.

How much can you charge customers?

BAR tutor pricing varies depending on the location and business model. When creating your price sheet, take a look at what the competition is charging. Most tutors charge a minimum of $200/hour, with some charging an hourly rate as high as $400. Prices for classes and workshops with multiple attendees range from $40 to $100 per hour.

Consider offering various packages. For example, you could charge a flat hourly rate of $250 for private tutoring. If a student commits to at least two hours, you could reduce the rate to $200/hour. Students that sign up for 10, 20, or 30 hours could save even more.

How much profit can a bar tutor business make?

The test tutoring conglomerate is a billion dollar industry. It is a competitive and recession-proof business that is poised for significant growth in the years to come. Industry leaders report monthly earnings in excess of $15,000. If your monthly overhead expenses are $1,400, this comes out to a monthly profit of $13,600 or over $163,000 in annual profits.

How can you make your business more profitable?

BAR tutors seeking opportunities to increase profits should consider hiring employees with expertise in other standardized tests. You could also sell recorded webinars and ebooks covering subjects ranging from the BAR exam to how to manage a successful tutoring business.

STEP 2: Form a legal entity

The most common business structure types are the sole proprietorship, partnership, limited liability company (LLC), and corporation.

Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your bar tutor business is sued.

You can form an LLC yourself and pay only the minimal state LLC costs or hire one of the Best LLC Services for a small, additional fee.

STEP 3: Register for taxes

You will need to register for a variety of state and federal taxes before you can open for business.

In order to register for taxes you will need to apply for an EIN. It's really easy and free!

There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.

STEP 4: Open a business bank account & credit card

Using dedicated business banking and credit accounts is essential for personal asset protection.

When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.

Open a business bank account

Besides being a requirement when applying for business loans, opening a business bank account:

• Separates your personal assets from your company's assets, which is necessary for personal asset protection.
• Makes accounting and tax filing easier.

Get a business credit card

Getting a business credit card helps you:

• Separate personal and business expenses by putting your business' expenses all in one place.
• Build your company's credit history, which can be useful to raise money later on.

STEP 5: Set up business accounting

Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.

Make LLC accounting easy with our LLC Expenses Cheat Sheet.

STEP 6: Obtain necessary permits and licenses

Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.

STEP 7: Get business insurance

Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.

There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.

Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.

Is this Business Right For You?

Successfully managing this type of business requires a legal background and experience in an educational setting. If you possess the necessary knowledge and are passionate about helping others grow professionally, a BAR tutoring business could be a fulfilling career change.

What happens during a typical day at a bar tutor business?

As a BAR tutor, you’ll help your clients prepare for the BAR exam. While each day will look a little different, let’s look at what will be expected of you:

• Identify the student’s strengths, weaknesses, and learning style in order to develop a study strategy based on your assessment.
• Teach innovative strategies for answering multiple-choice questions.
• Provide new study and memorization techniques.
• Analyze your student’s writing and work with them on improving their writing skills.
• Provide clients with study tools and handouts that outline topics in ways that better prepare them for the test.
• Hold students accountable for the work they put in.
• Answer BAR-related questions.
• Help students create and adhere to a study schedule.
• Provide encouragement and instill confidence in each of your students.
• Provide one-on-one coaching sessions.

Additional duties include marketing, communicating with prospective clients, and networking. Since the BAR’s testing standards change frequently, you’ll want to dedicate part of your schedule to researching these changes and collaborating with colleagues.

What are some skills and experiences that will help you build a successful bar tutor business?

Most individuals entering this industry have a legal background. You should also be well versed in test-taking strategies, problem solving, writing, and critical thinking. Success in this field requires patience and the ability to communicate difficult concepts in a way that works for various types of learners.

The energy you bring to each session will directly impact your client’s ability to learn. It’s important that you bring positivity to each session and create a safe and engaging environment.

While not required, business owners are encouraged to join associations that focus on standardized test preparation, as well as bar associations. Memberships offer networking opportunities, as well as support in business and brand development. The Association of Test Prep, Admissions, and Private Tutoring and the National Test Prep Association focus on test prep. This comprehensive directory of bar associations can help you find all the associations in your state.

What is the growth potential for a bar tutor business?

To keep up with the ever-changing legal and regulatory changes, the BAR exam test creators are continually updating the exam. This, coupled with the fact that 26% of law school graduates fail the exam the first time, leaves many aspiring lawyers insecure about the testing process. They are looking to you for guidance and support.

Advances in technology have helped position BAR tutor businesses for nationwide growth. You’re no longer limited by time or space, as classes and tutoring sessions can take place online. If you do elect to expand your business outside your home state, it’s important that the instructor be fully versed in the specifics of that state’s exam.