Group Case: Royas Tutoring Services

Roya started a small tutoring business for some side income in July of last year but is thinking about making it a more serious business venture after pondering some possibilities over the December holidays. As part of her due diligence, she has hired you, an MBA with accounting and business expertise to help.

Roya has been working at the Squamish Institute of Technology (affectionately nicknamed SQUIT) for the past three years. Due to her strong educational background (she completed her Master of Education from Musqueam University sixteen months ago), Roya has been promoted from Executive Assistant at her workplace to an Instructional Design Specialist at the schools Teaching and Learning Centre (TLC).

Roya loved helping other instructors so much that she found herself engaged with some of them in online meetings or phone for hours in her evenings and weekends. While this was fun for Roya (while being very helpful for her fellow instructors), it didnt exactly help pay the bills in a rising living cost environment! Furthermore, Roya was a bit envious of her TLC co-workers who got to interact more with students, helping them with course work on a day-to-day basis.

So, Roya went ahead and started her own tutoring service. She started by reconnecting with a couple of instructors who had asked her about TLC services. They had some struggling students had been asking about getting help beyond two tutoring hours per week- TLC capped the amount of time each student could get to ensure adequate time could be equitably allotted to all interested students. At the time, Roya had cited ethical concerns about making money off the same students she was, in a way, already compensated to help. However, after thinking about it, she decided to go ahead and offer the students private help- they desperately needed the service and were willing to pay for it. Also, she was still doing more than her fair share with helping instructors- that was her job at SQUIT, not helping students directly.

When she started her business, Roya priced her tutoring services at $70 per hour (and has stuck with that rate for the rest of the year). However, she has since learned that pricing needs to be adjusted for different circumstances. For example, some students meet with her over an online meeting- this is a very easy arrangement for Roya. Others prefer to come to her home office for help- this still works well but is maybe a bit more challenging/annoying for her (though seeing the student in person can make explaining some topics easier). Finally, there are some students who insist on meeting her at a different location such as their homes, at the SQUIT campus, or the public library. These arrangements have proven to be the toughest for Roya, as driving not only costs her time-wise but with vehicle expenses.

In the upcoming year, Roya is planning on charging the following rates:

Service Rate

Half hour of tutoring help- online $40 Half hour of tutoring help- Royas office $45 Half hour of tutoring help- SQUIT campus $50 Half hour of tutoring help- other location $60

In instances of tutoring meetings on campus, Roya plans to schedule them before or after her work hours- it is a quick walk from the TLC area to the campus library. Also, Roya has considered charging her students a direct hourly rate for driving time, with both parts of the trip billed- to and from the location (perhaps $25 an hour for driving time with one hour as a minimum charge), but she doesnt believe that would be perceived as fair. Instead, she hopes the higher rate will dissuade students from picking theother location option. In any case, she figures that she can always turn down students who are too far away- that is a perk of having her own business! Any advice about pricing would be appreciated.

Roya is also thinking about strategic marketing. She hasnt really pushed anything but has had great results via word-of-mouth marketing. Students and instructors have referred new clients to her and it has worked well - she tutored for 255.5 hours last year, starting from 31.5 in July and steadily growing to 55 in December. Roya is thinking about putting up flyers around the SQUIT campus and other locations such as the public library. She spoke to Greg, a marketing consultant, and he believes that with a $250 monthly investment in designing and printing eye-catching flyers, Roya can boost the December tutoring hours by 50% on average in 2024. In other words, the average monthly total for the year would be 50% higher than Decembers total. Without the flyers, the 2024 monthly average will be 30% higher than Decembers level. Roya is interested in getting feedback about this marketing strategy- she especially wants to know about the ethical implications of this marketing strategy.

Roya feels that she can continue working full-time at SQUIT for now, but has already discussed part-time possibilities with her manager, Trinity. Roya didnt talk about the specifics of her new business, but Trinity said that pushing her back to three days a week would be no problem (Roya would still get paid 66.67% of her $75,000 a year salary). Roya believes that the average billed tutoring half-hour next year will be $45. She is wondering about how much tutoring work would financially justify scaling back her full-time job. Roya expects steady business growth for the first three months of 2024 then things will level off- she believes that Gregs guidance on the annual average is pretty reasonable. An important factor for Roya is that she doesnt work more than about fifty-five hours a week. Ultimately, she prefers a workload of only forty weekly work hours but is willing to make short-term compromises to get her business rolling.

Advise Roya on what to do with her business and career. Produce a business report, including comprehensive analysis, recommendations, and any questions you may need to ask Roya.