We are a group of four students at XX high school, which has a student body of almost 2,000 students. We all had been student tutors at least one year for an existing student-to-student tutoring service, started by a kid who was two years older, and graduating. He actually did a great job starting it with a simple web page, pictures and bios of the 10 honor students who could each tutor in perhaps 2-4 subject areas. It really worked, immediately, and with no objections by the principal’s office or teaching staff, so long as all of the work was done elsewhere, and we didn’t promote ourselves on school property.
Turns out the originator, and now our ownership group, don’t have to promote it – we continue to have many more clients and requests for tutoring than time available for our staff to provide services. It’s crazy! The teacher’s and counselors are elated because they can be proud that it exists, but not in any way involved or encumbered by any problems that might come up.
We inherited and used the founder’s approach, forms, and website, so the ownership transition has been seamless. Except for one thing: pricing and profits. The founder charged $15 per one hour tutoring session, with $10 going to the tutor and $5 going to the founder. At the start most of the 10 tutors on staff were available for about 6 sessions per week, and therefore each made about $60 a week or $240 month for 6 hours a week of commitment. The accounting system has remained the same as well, which hasn’t been problematic.
What’s changed is that the returning tutors want more pay [what else is new?!], so we owners decided to increase pay to $15/hour and charge customers $25/hour which is still about ½ or less of the going rate for subject tutoring in high school. We’ve doubled our staff to 20 tutors, still working about 6 hours a week. So the gross revenues about 120 sessions/week x $25 = $2500/wk or $700 in net revenue split 4 ways among us.
Each of us also tutors so we individually make more than $175 a week for owning the business. While this $175 requires almost no time per week to earn, I hear rumblings among our ownership group about wanting to make more profit, somehow.
We have no partnership agreement, nor are any type of legal entity. We have no idea how the previous student owner handled taxes, which our parents have been asking us to address. So far we’re just kind of letting the concerns slide because no one seems too upset. I guess that will change over time.