Business Overview

A test prep business often helps prepare customers for tests such as the SAT, ACT, GRE, MCAT, and LSAT. The business may also help customers prepare for other tests. You may instruct clients by themselves or as part of a group. Your business may be located in a separate office, or you may visit clients; alternately, you may conduct lessons entirely online via services such as Skype.

Who is this business right for?

Obviously, this business is good for those who are great at taking tests and have already taken many standardized tests. It is a great business for a current or former educator, as this helps you in teaching fundamentals of test-taking to customers. Above all, it is great for those who want to improve their local community by helping people get into the universities and programs of their dreams and better themselves.

What happens during a typical day at a test prep business?

A part of your days will be spent communicating with existing clients about upcoming sessions as well as reaching out to prospective clients. You will review the specific lesson(s) you will offer that day, typically by reviewing a specialized test prep book. Depending on your business model, you may spend part of the day driving around the area to meet clients for sessions. Finally, you will spend time conducting the actual lessons.

What is the target market?

While it can vary by area, your best clients are typically high school juniors and seniors preparing to take the ACT and/or SAT. This is because there is typically a surplus of these students compared to people preparing for higher tests such as GREs and LSATs. These younger students are also used to a high school environment, so they will typically take instruction well.

How does a test prep business make money?

A test prep business makes money by charging clients for test prep lessons. This is typically an hourly fee, with the fee being larger if you are conducting a one-on-one lesson and lower if you are conducting a group lesson.

What is the growth potential for a test prep business?

The growth potential for this business is moderate. While overall college enrollment has decreased 1.5 percent from 2016 to 2017, many colleges are becoming increasingly competitive, which provides incentive for students to get assistance preparing for tests. In your area, you may also consider advertising and networking more heavily with local academies and magnet schools that are likelier to have a higher number of students wanting test prep services to get into their college of choice.