Money-minded people can cause blockers in running tuition businesses.

So what are these blockers? They’ll fight over saving whatever they can and won’t be interested in the long-term picture of the business. Their focus is simply the bottom line i.e. Profit/Loss. 

So what does it mean for a tuition business? It only means one thing. Not paying tutors the wages they deserve. After all, it’s a service-based business, so the majority of the cost is staff wages. 

When we first started, we paid minimum wage to our tutors—not thinking about the skills they were bringing to the table. I’m happy to say that we have come a long way, where we now understand the importance of quality that is delivered to the students, and for that, we pay tutors what they deserve.  

Both I and my brother are running our tuition centres now, but share resources and knowledge to help each other out. Whenever we would meet at family events, we would discuss our tuition business and how it was going. Like many people, we have our differences. 

How are we both different? I’m happy to pay tutors extra to keep them motivated, whereas my brother would pay tutors only what they deserve, and not a single penny more. For him, the bottom line matters most. 

He would negotiate hard with tutors, so much so that he would be paying tutors in £0.5 increments. E.g. increasing pay from £13 to £13.50. I, on the other hand, am happy to pay a couple of extra pounds for their efforts and to keep them happy and motivated. 

I’m also comfortable hiring a few extra staff at the centre to help me in times of need when we may be down on tutor numbers due to sickness and leave.  

So, why am I sharing this story with you? What’s the point? The point is that we both have our way of running the tuition business, and there is nothing wrong with either approach. 

But there is a problem. The problem is that staff turnover at my brother’s tuition centre is a lot higher than mine. He’s hiring and firing tutors all the time. He goes as far as saying to me: “You know increasing £1 in hourly wages means £600 or so pounds savings in a year. That’s a lot of money.” 

Yes, I understand the maths behind it, after all, I’m a Chartered Accountant (Phew! – got there in the end), but I can’t personally run my tuition business in this way. I know it means more profitability, but ultimately I value the culture of a tuition business more than its profitability. It should be more about running an organisation with the least problems possible, and the biggest problem is tutors’ consistent availability. 

My uncle, who owns and runs private schools of his own once told us: “You know what the most difficult part of running any organisation is? It’s the people. You resolve this, you resolve most issues in a business.” 

After all, the tuition business is service-based, so if we resolve the tutor situation, we solve a lot of our problems. For me, I must resolve this, so I’m happy to pay a little bit extra to the tutors to keep them motivated to consistently turn up. 

I’ll tell you why this approach works. Both my brother and I have tutors that we share between us, but I’m paying them higher wages for the same time and effort they put in. 

How do I know this? Because tutors talk and they’ve told me how much my brother pays them. Tutors who can’t commit to working longer hours, end up leaving my brother’s tuition business first. They are happy to continue working at mine instead, for a longer time. 

If you want to make a success out of a tuition business, a key consideration needs to be given to your tutors’ consistency and a happy working environment. 

I find by giving minimum increments in wages and hiring and firing tutors frequently, my brother makes it difficult for himself to run his tuition business more consistently without any hassle. Of course, he manages to resolve this problem by getting supply tutors and by other means, but I’m a believer in paying a little more for peace of mind, consistency and a happy working environment.   

Take my third business partner for instance; he would also think about money and profitability. I remember he needed convincing on any wage increments. I mean £1 an hour would be too much for him. Asking him for a raise was asking for trouble. Me and my brother would have to justify the spending wage increments, which tutor is it going to be and what we are trying to get out of it. I mean it was a mission to convince him. 

But truth be told, there were times me and my brother would veto his vote to move things forward. Otherwise, we would be stuck in the same situation without getting anything resolved. 

Conclusion

The point of these stories is to show how important it is to stay on course to run a tuition business in a hassle-free manner. 

But know that, business for most is all about making money first. And that mindset will cause blockers. This mindset won’t let the business grow and would simply focus on the bottom line (Profit/Loss). 

I rather free up my time as best as possible (even if that means lesser profitability), so that I can invest that time and effort in other places where needed most. That could be expansion, bringing more customers, or liaising with investors. So many times, we get stuck in delivery, that we fail to realise that money is actually in other areas of the business. 

So pay money to the tutors, pay them a little extra to keep them motivated and keep your peace of mind.