Advantages and Disadvantages of Online Tutoring From a Business Perspective

Technology has improved significantly over the last 20 years to the point where it is now quite easy and cost-efficient to provide tutoring services online. While many independent tutors and tutoring companies view this as a favorable change in the industry it also poses many threats to existing businesses. Many articles look at the advantages and disadvantages of online tutoring from the perspective of the student – this article will explore this topic from the perspective of the tutoring business.

Advantages

The availability of technology for online tutoring is most advantageous to new tutors or tutoring companies that are not yet established in the market. Online tutoring requires low start-up costs, it opens the tutor up to a much larger market and offers more flexibility for scheduling. Let’s take a look at each of these advantages one at a time:

Lower barriers to entry

Although many independent tutors also have low start-up costs, if you are a tutoring company and decide to go the online route, you can avoid many of the expenses associated with starting up a traditional tutoring company. Traditional companies often require an office for administration or where tutoring takes place, marketing through local media, driving to meetings to prospective clients, etc. Online tutoring companies do not require an office other than a home office and definitely do not require a building for teaching students. Online marketing is lower cost and can be targeted more directly than traditional marketing, and talking with clients can be done online or by phone. These low start-up costs make it much easier for new businesses to start online.

Larger market

Traditional tutoring companies are limited by geography – they cannot cost-effectively serve students outside of their geographic area due to time-constraints related to transportation and the cost of transportation. For this reason, tutoring companies have much smaller markets and can only enter new markets by adding new locations. Online tutoring businesses do not face this limitation. They can reach anyone with an internet connection and the only real limitation is language. For this reason many individuals prefer to start an online tutoring company so that they can reach a much larger market. This can be a very good strategy if your company teaches a highly specialized subject that would not have enough people locally to support the business.

Tutoring companies can also hire tutors from a much larger area and may be more successful in finding top-quality teachers in the subjects they offer.

Flexibility

Online tutoring companies have more flexibility since they can choose to teach students in different time zones. Tutors that are only available to teach in the late evening can easily teach students from a later timezone where it is afternoon. This makes it easier for independent tutors to fit their tutoring into their personal or work schedule.

Lower operating costs

The ongoing operating costs of running an online tutoring business are also lower than traditional tutoring. Some of the eliminated costs come in the form of building leases, phone, transportation and marketing. Online tutors can do everything from their home, they can use free or low-cost online phones like Skype for communication and they don’t have to spend money driving to the tutoring office or to clients’ homes.

Disadvantages

Many of the advantages of online tutoring can also pose challenges for tutoring companies. We’ll look at the disadvantages below one at a time.

Lower barriers to entry

Low barriers to entry make online tutoring attractive to new tutoring companies, but for incumbents this is a negative since it makes it easier for new companies to enter the market and compete with them. This ultimately leads to more price competition and lower profit margins.

Competition from other markets and other countries

Online tutoring overcomes the geography barrier which is also a disadvantage for existing tutoring businesses. This means that instead of facing competition only from tutoring companies in their immediate market they now face competition from tutors in other parts of the country and in other countries all-together. Many online tutors are from countries like India where the cost of living is much lower. Thy can teach American students online and charge a rate that is still much lower than standard rates in the United States, yet still well above the rate they would earn for tutoring in their own country.

Technology limitations of students

While most people have a personal computer at home and internet access, many students who need tutoring do not have the required technology to receive online tutoring. In addition to a computer, a high-speed internet connection is ideal, a headset and microphone are needed for talking with the tutor, and hardware such as a writing board may be required depending on the subject. This means if your business wants to provide only online tutoring there will be many students that you cannot reach.

Effectiveness

While online tutoring can be effective, there are certain subjects where face-to-face communication and explaining concepts on a sheet of paper are more effective than communicating online. It can also be more challenging to keep students engaged when tutoring online, which can have a negative effect on the student’s progress.

Online tutoring creates both opportunities and challenges for tutoring businesses. By understanding and evaluating these challenges, tutoring companies will be better prepared to respond to them and adapt their business strategies to the changes it brings the industry.