Start A Test Prep Business - Business Ideas
Please note that the data provided in this article are estimates and may vary depending on various factors, and should not be considered as perfect or definitive.
Parents often make their kids take test prep classes. This is because they don't know how to best prepare their kids for tests. This means that you might find yourself needing a business to help teach your kids in the most optimal way.
Whether you're a current student or a recent graduate, test prep can be an excellent way to earn income. Forty percent of USA students are predicted to need some form of tutoring or test preparation this year. Test prep businesses are on a mission to help students and companies succeed in the standardized test prep industry.
Starting a test prep business requires a great deal of effort, dedication, and most importantly passion.
If you're interested in how to sell test prep, or selling test prep online, you can use this page as a guide for everything you'll need to know.
Key Stats
Startup Costs
| Min Startup Costs | Max Startup Costs | |
|---|---|---|
|
Office Space Expenses |
$0 |
$7,000 |
|
Employee & Freelancer Expenses |
$151 |
$352 |
|
Website Costs |
$223 |
$7,215 |
|
Business Formation Fees |
$5,600 |
$20,400 |
|
Equipment & Supply Expenses |
$63 |
$200 |
|
App Creation Costs |
$1,000 |
$20,000 |
|
Software Expenses |
$162 |
$3,094 |
|
Advertising & Marketing Costs |
$0 |
$3,000 |
|
Training & Education Expenses |
$0 |
$850 |
|
Total Startup Costs |
$7,199 |
$62,111 |
Successful Businesses
| Business | URL | Rank | |
|---|---|---|---|
|
|
Testbook.com |
testbook.com |
1,703 |
|
|
keybr.com |
keybr.com |
9,667 |
|
|
IMS |
imsindia.com |
12,262 |
|
|
Best SSC Exam and RRB NTPC Exams Preparation Website in India |
sscadda.com |
20,018 |
|
|
Exam English |
examenglish.com |
20,497 |
|
|
PTE Academic |
pearsonpte.com |
27,722 |
|
|
Becker |
becker.com |
28,445 |
|
|
PTE Tutorials |
ptetutorials.com |
36,577 |
|
|
GMAT prep |
targettestprep.com |
42,909 |
|
|
PrepLounge.com |
preplounge.com |
45,819 |
|
|
Practice Aptitude Tests |
practiceaptitudetests.com |
49,306 |
Pros & Cons
| Pros | Description |
|---|---|
|
Flexibility |
You can put as much time into the business as you'd like. If you like the work and have some initial experience, you can start small and manage all aspects of the business on your own. |
|
Ability to start your business from home |
It's not necessary to have a physical storefront or office space to get your business started. You can do everything from the comfort of your own home, at least in the beginning! |
|
Rewarding work |
Starting a test prep business can be really rewarding work. After all, you are solving an immediate issue for your customer and you're working on something you truly care about. |
|
Traffic to your website |
A test prep business gives people a reason to visit your website and to keep coming back to you! |
|
Meaningful business connections |
You never know who you will meet as a test prep business. This could be the start of an incredible business opportunity! |
|
High customer retention rates |
Once a customer invests in your product, they've invested their time and energy to utilize your product/service which is highly valuable to them. Typically, your product or service becomes indispensable to your customer. |
| Cons | Description |
|---|---|
|
Low margins |
The gross margins for your test prep business are typically around 20%, which can make it more challenging to incur new expenses and maintain profitability. |
|
Stressful work |
This line of work can be stressful for both you and your clients. This type of transaction is a significant financial decision for your client, so expectations are very high for you. Although this career path can be very rewarding, it also comes with its challenges and stressful moments. |
|
Churn |
In this business, customers can cancel their membership or subscription for your services - which can make revenue forecasting challenging and unpredictable. It's important to focus on your churn rates and trends so that you can prevent this as much as possible. |
|
Time commitment |
With starting a test prep business, all responsibilities and decisions are in your hands. Although this is not necessarily a negative thing, work life can take over at times. This can place a strain on friends and family and add to the pressure of launching a new business. |
|
Difficult to build trust with your customer |
With starting a test prep business, there can be minimal face-to-face interaction, which means it can be a lot more difficult to establish trust with your customers. You'll need to go the extra mile with your customer to grab their attention and business. |
|
Strict regulations |
With any test prep business, there are strict rules and regulations as it relates to processing your product. You must follow these regulations specifically, or significant legal issues could occur. |
Marketing Ideas
-
1
Word of mouth
Word of mouth is when a consumers reflects their interest in a company’s product or service in their daily dialogues.
Therefore, word of mouth advertising is essentially a free advertising triggered by the customers experience.
According to Nielsen, 92% of people trust recommendations from friends and family.
Therefore, in today’s hyper-connected world, a single recommendation through a word of mouth can have a huge impact to your business.
-
2
Social Media Advertising
Social media advertising is the use of social media platforms to connect with your audience with the objective to build your brand, increase sales, and drive website traffic.
According to Oberlo, approximately 48% of the global population use social media, and the number is ever-growing.
Therefore, social media allows brands access to cost-effective advertising by enabling them to interact with a large audience.
-
3
Pay Per Click Advertising
Pay-per-click (PPC) is a performance-based marketing method that allows you to show specific ads for services or products oriented to a very defined target, with the goal that the user visits your website or landing page.
- 4,818 founder case studies
- Access to our founder directory
- Live events, courses and recordings
- 8,628 business ideas
- $1M in software savings
- 4,818 founder case studies
- Access to our founder directory
- Live events, courses and recordings
- 8,628 business ideas
- $1M in software savings
- 4,818 founder case studies
- Access to our founder directory
- Live events, courses and recordings
- 8,628 business ideas
- $1M in software savings
- 4,818 founder case studies
- Access to our founder directory
- Live events, courses and recordings
- 8,628 business ideas
- $1M in software savings
- 4,818 founder case studies
- Access to our founder directory
- Live events, courses and recordings
- 8,628 business ideas
- $1M in software savings
- 4,818 founder case studies
- Access to our founder directory
- Live events, courses and recordings
- 8,628 business ideas
- $1M in software savings
- 4,818 founder case studies
- Access to our founder directory
- Live events, courses and recordings
- 8,628 business ideas
- $1M in software savings
- 4,818 founder case studies
- Access to our founder directory
- Live events, courses and recordings
- 8,628 business ideas
- $1M in software savings
