How to Start an eLearning Business

Online courses have increasingly become the go-to method for learning a variety of skills and knowledge. The benefits of online learning for students and instructors are numerous, and for entrepreneurs, the financial potential can be significant. In fact, the eLearning industry is expected to reach $325 billion by 2025.

eLearning businesses may deliver formal education opportunities or informal opportunities. On the more formal end of the spectrum, accredited colleges and universities offer fully online degrees. On the less formal end, other eLearning businesses offer instruction on practically every subject, from basket weaving to gardening. If you can think of a subject, chances are you can find someone attempting to teach it online.

Learn how to start your own eLearning Business and whether it is the right fit for you.

Start an elearning business by following these 9 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 elearning business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.

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:

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

What are the costs involved in opening an elearning business?

Getting started with an eLearning business doesn’t have to cost a lot. If you create your own courses and build your own platform, you will only need to pay for course production equipment (audio/visual), website hosting, and your platform. On the cheap end, you could record audio/video on your phone, edit in a free video editor, post videos on YouTube, and use WordPress for your site – all of which will cost very little.

If you want to hire others to create your coursework, the estimate for an hour of basic eLearning content in 2017 was around $4,500 at the low end. For more comprehensive content, the estimated cost of an hour of content was $10,054.

What are the ongoing expenses for an elearning business?

The ongoing costs for an eLearning business include platform maintenance and hosting as well as course creation. By far the most expensive cost is course creation. As mentioned before, the cost of an hour of course content can cost thousands of dollars or more. You can mitigate the cost of course creation somewhat by hiring salaried staff to do most of the work, but you will still need to pay experts to oversee the course creation and give final approval.

Who is the target market?

The target market for your eLearning business will vary greatly depending on what kind of courses you are offering. A course like Microsoft Excel Secrets will probably appeal to office workers while Making Homemade Sauerkraut will likely appeal more to hobbyists. There is value in both markets. Corporate clients and their employees are great consumers of online learning products, but you could also attract passionate and committed customers in the hobbyist area as well.

How does an elearning business make money?

An eLearning business usually makes money in one of two ways. The first is known as the night school model. In this model, the business charges a one-time fee for access to a course. The student follows the course outline, takes quizzes and tests to measure progress, and eventually completes the course.

The second business structure is the academy model. In this model, the business charges users a recurring fee for access to all of the courses they offer.

How much can you charge customers?

The amount you can charge customers depends on what courses you are offering and the market you are serving. For example, you can find basic eLearning courses for $9.99 on some platforms. Courses that lead to certification in a high-demand area can cost $10,000. Then you have eLearning platforms that offer Academy-style subscriptions, which may charge $19.99 a month to $49.99 a month.

How much profit can an elearning business make?

According to the eLearning hosting platform UScreen, the most profitable eLearning businesses use the Academy model. While charging hundreds of dollars for a single course can appear to be the most lucrative option at first, over time the subscription model adds up to more profit. UScreen claims that users applying the subscription model earn an average of $5,700 a month.

How can you make your business more profitable?

You can make your business more profitable by creating more courses. Each course you create will earn you some income and continue to earn income for as long as it is desirable to the consumer. As an example, your first course might make you an average of $100 a month. If you created 10 courses over a year, you could make ten times that amount. Another option for making your business more profitable would be to increase the variety of courses you offer. This is particularly useful in the Academy model because the more variety you offer for the monthly fee, the more attractive your subscription service becomes to customers.

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.

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After registering a domain name, consider setting up a professional email account ( Google's G Suite offers a business email service that comes with other useful tools, including word processing, spreadsheets, and more. Try it for free

STEP 2: Form a legal entity

Establishing a legal business entity such as an LLC prevents you from being personally liable if your elearning business is sued. There are many business structures to choose from including: Corporations, LLC's, and DBA's.

Form Your LLC

Read our Guide to Form Your Own LLC

Have a Professional Service Form your LLC for You

Two such reliable services:

Check out the Top Business Formation Services from our friends at StartupSavant.

You should also consider using a registered agent service to help protect your privacy and stay compliant.

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!

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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?.

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.

Read our Best Banks for Small Business guide to find the best national bank, credit union, business-loan friendly banks, one with many brick-and-mortar locations, and more.

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Recommended: BlueVine is an online bank with free business checking and no hidden fees. Great for businesses who do not often deal with cash.

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.

How to promote & market an elearning business

Knowing your target audience will make promotion and marketing easier. You can identify their needs and explain how your courses meet those needs. One effective marketing approach in eLearning is to let potential customers know that the online nature of your products can save them time and money over more conventional learning opportunities like in-person classes. You can also offer a promotional course for free or a portion of a course to give them a taste that will encourage them to come back for more.

How to keep customers coming back

Successful eLearning businesses do two things to keep customers coming back. First, they make sure that customers will get what they expect from their courses. Each course needs to deliver on its promise of solving a problem or meeting a need. Second, they offer new courses of similar quality. Once a customer has a satisfactory experience with one course, they are more likely to come back for another course.

STEP 9: Establish your Web Presence

A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.

Start An eLearning Business In Your State

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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?

You may be passionate about a particular subject or subjects and want to share your knowledge using modern technologies. Or, you might be more interested in connecting great instructors with eager students through your own platform. Whether you are approaching this business idea as an instructor, a business person, or both, there is a lot of potential in the eLearning business model.

Some eLearning entrepreneurs are more tech-oriented, while others are more focused on pedagogy and instruction. Both have something to offer potential customers who want to take advantage of online learning.

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Want to know if you are cut out to be an entrepreneur?

Take our Entrepreneurship Quiz to find out!

Entrepreneurship Quiz

What happens during a typical day at an elearning business?

Running an eLearning business requires juggling a lot of things, including course design, course implementation, instructor needs, tech issues, and marketing. If you are in charge of the business, you are probably not the only one creating courses. You may not even be involved in building courses. Instead, you might be working with multiple instructors to offer various courses on your platform. That means you need to keep the wheels rolling on different projects to get courses launched on time and ensure that your customers can use your platform as intended.

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

The skills and experience you will need to be successful with an eLearning business depend somewhat on how you plan to structure your business. If you will be the instructor in all of your courses, you need enough authority to attract learners. For instance, if you want to teach journalism, you should have some journalism credentials so people want to learn from you.

If you are looking to create something bigger and more substantial like an eLearning platform with a variety of courses, you will need good management skills. As mentioned earlier, you will be working with various instructors and possibly developers to build courses and deliver those courses through an online platform. You will need to be capable of recognizing quality instruction and desirable platform design.

What is the growth potential for an elearning business?

The growth potential for an eLearning business is significant. While you may start with only a few courses, over time you can develop numerous courses and increase your customer base with each offering. One advantage this business idea has is that once you finish work on a course, that course can keep making you money for as long as it is of interest to the market. Depending on how evergreen the course is, you may have to make few if any changes to the course year after year.

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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.

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:

  • Funding
  • Events
  • Guides
  • Support

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 an elearning business?

  • Choose a niche. If you are starting your own eLearning business and doing most of the work yourself, you definitely want to narrow down to a specific niche to avoid being overwhelmed with possibilities.
  • Identify a need and fill that need with a course. For those that love certain subjects, creating courses for those subjects can be fun and satisfying. But the goal here is to make money, so you need to make sure you can sell your courses to consumers. Identify a need first – before building a course – to ensure you have a market for your product.
  • Offer a user-friendly platform. The best course in the world is not going to be enough to keep customers around if your platform is difficult to use. If you have the skills, it is possible to create your own platform. However, remember that you can also use an established platform for eLearning by paying a monthly fee.

How and when to build a team

Running your own eLearning business solo will be challenging and maybe impossible if you are successful. Developing courses is time-consuming. So is creating and maintaining a platform, not to mention the time requirements for proper marketing. If you don’t build a team at the beginning, you should seriously consider doing so after your first course is successful. Expanding your business will require at least a few other team members, including someone to maintain your platform, someone to curate courses, and someone to handle marketing.

Next Steps

Get more ideas with our Business Ideas Generator.

Check out our How to Start a Business page.

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