Start a bar tutor business by following these 10 steps:
You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. 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.
Check out our How to Start a Business page.
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 are the startup and ongoing costs?
- Who is your target market?
- How much can you charge customers?
- What will you name your business?
Luckily we have done a lot of this research for you.
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.
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.
STEP 2: Form a legal entity
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.
Form Your LLC
Read our Guide to Form Your Own LLC
Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services. You can choose to hire a registered agent or act as your own.
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!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
Small Business Taxes
Depending on which business structure you choose, you might have different options for how your business will be taxed. For example, some LLCs could benefit from being taxed as an S corporation (S corp).
You can learn more about small business taxes in these guides:
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.
Additionally, learning how to build business credit can help you get credit cards and other financing in your business's name (instead of yours), better interest rates, higher lines of credit, and more.
Open a business bank account
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Recommended: Read our Best Banks for Small Business review to find the best national bank, credit union, business-loan friendly banks, one with many brick-and-mortar locations, and more.
Open net-30 accounts
When it comes to establishing your business credit, net-30 vendors are considered the way to go. The term "net-30," which is popular among vendors, refers to a business credit arrangement where the company pays the vendor within 30 days of receiving goods or services.
Net-30 credit terms are often used for businesses that need to obtain inventory quickly but do not have the cash on hand.
Besides establishing business relationships with vendors, net-30 credit accounts get reported to the major business credit bureaus (Dun & Bradstreet, Experian Business, and Equifax Business Credit). This is how businesses build business credit so they can qualify for credit cards and other lines of credit.
Recommended: Read our guide on the best net-30 vendors so you can start building business credit now, so you never have to worry about cash flow in the future. Keep in mind that poor cash flow is the #1 reason businesses fail!
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment 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.
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.
Learn more about General Liability Insurance.
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.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners, we'll give you helpful tips and advice for creating the best unique logo for your business.
How to promote & market a bar tutor business
Your target market for this business venture is very defined. When interacting with your clients, pay attention to what published materials, online forums, and social media platforms they subscribe to. This insight will prove invaluable when developing your marketing strategy.
Your website should be user friendly and showcase your business’s success stories. Including a blog will offer more SEO opportunities and help you establish your role as an industry thought leader. Networking with teachers, college advisors, and colleagues will help you build a reputation and reach potential clients.
How to keep customers coming back
While this type of business is lucrative and recession-proof, the customer turnover rate is almost 100%. Unlike most businesses, a 100% turnover rate means you’ve done what your clients hired you to do. It also means that you cannot let your marketing efforts take a back burner to other projects.
Every success story is a marketing opportunity. Ask clients to share their testimonials online and refer classmates that are preparing for the exam. If you are looking for ways to retain customers, you could help prepare future law students by offering LSAT tutoring.
Still unsure about what kind of business you want to start? Check out the latest Small Business Trends to help inspire you.
STEP 9: Create your business website
After defining your brand and creating your logo the next step is to create a website for your business.
While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.
Here are the main reasons why you shouldn’t delay building your website:
- All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
- Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
- Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.
Using our website building guides, the process will be simple and painless and shouldn’t take you any longer than 2-3 hours to complete.
STEP 10: Set up your business phone system
Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.
There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use.
Recommended: Find the best phone system for your business; check out our review of the Best Business Phone Systems 2021.
Start A BAR Tutor Business In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
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.
Want to know if you are cut out to be an entrepreneur?
Take our Entrepreneurship Quiz to find out!
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.
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Take the Next Step
Find a business mentor
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
Learn from other business owners
Want to learn more about starting a business from entrepreneurs themselves? Visit Startup Savant’s startup founder series to gain entrepreneurial insights, lessons, and advice from founders themselves.
Resources to Help Women in Business
There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:
If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.
What are some insider tips for jump starting a bar tutor business?
In the legal field, standards and laws change rapidly. Therefore, it is absolutely critical that you remain abreast of any and all changes. Spend time every day reading up on recent changes and finding innovative techniques that can help your students be better test takers.
While it is important to instill confidence in your students, be careful when making promises regarding test results. You can set a student up for success in every way, but if they don’t put in the work, they aren’t going to get their desired result. Instead, help students set goals and support them as they work to conquer them.
How and when to build a team
If your business goals include expansion, you’ll eventually want to hire new team members. Every employee should have the necessary skills and qualifications. Additionally, employees should share your passion for helping others conquer their professional goals.