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.
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Learn how to start your own eLearning Business and whether it is the right fit for you.
Start an elearning business by following these 10 steps:
- Plan your eLearning Business
- Form your eLearning Business into a Legal Entity
- Register your eLearning Business for Taxes
- Open a Business Bank Account & Credit Card
- Set up Accounting for your eLearning Business
- Get the Necessary Permits & Licenses for your eLearning Business
- Get eLearning Business Insurance
- Define your eLearning Business Brand
- Create your eLearning Business Website
- Set up your Business Phone System
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.
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 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 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 important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Business Name Generator
If you operate a sole proprietorship, you might want to operate under a business name other than your own name. Visit our DBA guide to learn more.
When registering a business name, we recommend researching your business name by checking:
- Your state's business records
- Federal and state trademark records
- Social media platforms
- Web domain availability.
It's very important to secure your domain name before someone else does.
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 elearning business is sued.
Form Your LLC
Read our Guide to Form Your Own LLC
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.
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?.
Learn how to get an EIN in our What is an EIN guide or find your existing EIN using our EIN lookup guide.
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:
- LLC Taxes
- Sole Proprietorship vs LLC
- LLC vs Corporation
- LLC vs S Corp
- How to Start an S Corp
- S Corp vs C Corp
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
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.
Recommended: Read our Best Banks for Small Business review to find the best national bank or credit union.
Open net 30 accounts
Net 30 accounts are used to establish and build business credit as well as increase business cash flow. With a net 30 account, businesses buy goods and repay the full balance within a 30-day term.
NetMany net 30 credit vendors report 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 best net 30 vendors, guide and start building business credit.
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.
Recommended: Apply for an easy approval business credit card from Divvy and build your business credit quickly.
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.
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.
Recommended: Get a logo using Truic's free logo Generator no email or sign up required, or use a Premium Logo Maker.
If you already have a logo, you can also add it to a QR code with our Free QR Code Generator. Choose from 13 QR code types to create a code for your business cards and publications, or to help spread awareness for your new website.
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.
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.
Recommended: Get started today using our recommended website builder or check out our review of the Best Website Builders.
Other popular website builders are: WordPress, WIX, Weebly, Squarespace, and Shopify.
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. Check out our review of the Best Business Phone Systems 2023 to find the best phone service for your small business.
Recommended Business Phone Service: Phone.com
Phone.com is our top choice for small business phone numbers because of all the features it offers for small businesses and it's fair pricing.
Start a eLearning Business in your State
- District of Columbia
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Rhode Island
- South Carolina
- South Dakota
- West Virginia
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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.
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 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.
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 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.
Get more ideas with our Business Ideas Generator.
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