Online courses are offered for many types of learning. Global Industry Analysts, Inc. reported the global, online, eLearning industry was over US $107 billion in revenues during 2015. There are plenty of opportunities to make money with an online courses business.
Online courses may lead to earning a degree, getting certification and/or completing legal requirements. Online courses are popular for corporate training, continuing education purposes, self-improvement, learning foreign languages, hobbies, and “how-to” instructions for a variety of projects.
Start an online courses business by following these 10 steps:
Plan your Online Courses Business
Form your Online Courses Business into a Legal Entity
Register your Online Courses Business for Taxes
Open a Business Bank Account & Credit Card
Set up Accounting for your Online Courses Business
Get the Necessary Permits & Licenses for your Online Courses Business
Get Online Courses Business Insurance
Define your Online Courses Business Brand
Create your Online Courses Business Website
Set up your Business Phone System
There is more to starting a business than just registering it with the state. We have put together this simple guide to starting your online courses business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
Plan your business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
What are the startup and ongoing costs?
Who is your target market?
How much can you charge customers?
What will you name your business?
Luckily we have done a lot of this research for you.
What are the costs involved in opening an online courses business?
For level one self-directed online courses the costs are to create the course materials, build a website, and create an online marketing campaign with enough funds to attract students.
A typical budget for a sophisticated course offering would be about $21,000 consisting of these expenses:
Creation of Course Materials – $10,000
Website – $5,000
Internet Marketing – $500 per month ($6,000 per year)
For level two self-directed online courses with live chat help, this would be the $21,000 above plus live chat support for a total budget of around $24,000. Live chat support can be outsourced for prices starting at $199 per month for 24/7 monitoring and response. There are many companies providing these services. Here is one example from 365chatsupport.
For level three online courses guided by instructors, you will need video conferencing capabilities, good lighting, and a good quality webcam. Also, the instructors will earn US$30 per hour on average. Your small startup budget would be about $25,000 and depend on the hours of instruction you plan to offer at inception.
What are the ongoing expenses for an online courses business?
The ongoing expenses are:
A high-quality Internet connection that allows for a fast response and large bandwidth for web hosting. Allow $1,000 per month for an average operation that is successful.
For Internet marketing, allow a minimum of $500 per month for the most basic advertising. Successful online courses businesses spend $5,000 per month on marketing or more.
To pay instructors, allow $30 per hour for their class teaching time.
For course content creation, allow a minimum of $1,000 to $2,000 per new course created.
Who is the target market?
Contracting with an organization(s) to create online training courses for new employees, and continuing educational courses for existing employees, is an excellent way to achieve continual business.
For online courses taken by individuals, the best customers are those who have a need or desire to complete a course and prefer the convenience of taking such a course online.
How does an online courses business make money?
There are two ways to make money with online course offerings. They are, charge each student a participation fee or contract with an organization to provide these services for a fee.
How much can you charge customers?
Level one and level two self-directed courses start at around $9.99 and go up to about $499 if certification is the goal. Video conferencing courses may be charged per hour and students pay $10 per hour up to $30 per hour depending on the number of other students participating at the same time. One-on-one tutoring is usually around $30 per hour. Specialty courses by industry experts can sell for thousands of dollars.
How much profit can an online courses business make?
Some people are comfortable making a few hundred dollars profit per month. Others make hundreds of thousands of profit per year. The largest companies in this industry sector make many millions in profit annually.
Here are some resources to use to generate ideas for online courses that are likely to be profitable:
Jeanne Blackwell’s system and free webinar
Fementrepreneur’s system that encourages women to try this business
Take this course that is offered on Udemy about creating a profitable online course
How can you make your business more profitable?
Continue to offer new and exciting courses to past customers. Sell materials related to the course content. Expand from teaching individuals to getting contracts to provide training for the entire workforce of major organizations.
Set up an affiliate program that gives commissions to those who find new customers for your online courses. Expand operations to include multiple languages and market your courses in other countries.
What will you name your business?
Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Online Courses Business Name Generator
If you operate a sole proprietorship, you might want to operate under a business name other than your own name. Visit our DBA guide to learn more.
When registering a business name, we recommend researching your business name by checking:
Your state’s business records
Federal and state trademark records
Social media platforms
Web domain availability.
It’s very important to secure your domain name before someone else does.
Form a legal entity
The most common business structure types are the sole proprietorship, partnership, limited liability company (LLC), and corporation.
Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your online courses business is sued.
Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
How to promote & market an online courses business
It is important to use the best practices for search engine optimization (SEO) to make sure you have the highest ranking possible on the search engine results page (SERP). This will increase the organic (non-paid) search engine traffic to your website.
It is easier to market a course that offers very special content that is highly valuable and not available elsewhere.
Experts attract high-paying students when they share specialized information that they know with a select group. The most effective way of attracting these students is to give free introductory webinars to discuss the course content in such a way that motivates the participants to sign up for the online courses.
Social media is an excellent way to attract customers by interacting with others who have similar interests. Distributing free introductory e-books helps create interest in taking the full, online courses.
How to keep customers coming back
The quality of the course materials and the good experience of past students, who give positive course ratings and testimonials, will help attract customers. Adding new course content that is of interest to past students helps make them into repeat customers.
Create your business website
After defining your brand and creating your logo the next step is to create a website for your business.
While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.
Here are the main reasons why you shouldn’t delay building your website:
All legitimate businesses have websites – full stop. The size or industry of your business does not matter when it comes to getting your business online.
Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.
Using our website building guides, the process will be simple and painless and shouldn’t take you any longer than 2-3 hours to complete.
What happens during a typical day at an online courses business?
The activities differ, depending on the type of online courses offered.
For level one self-directed courses, most of the processes are automated. As the business owner, you will be highly focused on marketing efforts to find students who will take the courses. You will spend most of your time creating online marketing campaigns and/or supervising those who you hire to help you do this marketing effort. You will spend some of your time creating or supervising the creation of materials for new courses in order to expand your online course offerings. A smaller part of your time will be checking the existing course materials to make sure they are up-to-date with current information.
For level two self-directed courses with live online chat, you will have similar responsibilities as for level one, with the addition that you will participate in the live text chatting with students and/or oversee the live text chats for quality control purposes.
For level three live real-time video conferencing online courses, in addition to the responsibilities of level one and level two, you will spend part of the day preparing for your online lectures and part of the day giving the lectures to students on a regular schedule.
What are some skills and experiences that will help you build a successful online courses business?
It helps if you have expert knowledge in a specific niche or if you can hire those who have this expertise to help you.
For level one self-directed courses, you will need to prepare the course materials and then market them on the Internet. The course materials may come from your professional efforts and be an extension of them. For example, if you are a great chef, you can create an online cooking course to teach some of your best techniques in preparing recipes.
Some courses require a teaching certification. For example, if you want to teach English as a second language using the video conference method, you should have a teaching certification of TEFL or TESOL. There are many choices for how to get these certifications. One company, ESL Certified, offers both courses online.
Another example is the extensive certification process offered by Microsoft for software programmers and developers.
What is the growth potential for an online courses business?
Depending on the market niche, the potential for growth is excellent. Examples of very successful businesses that offer online courses include these top-ten selected by the eLearning Industry for 2016:
BusinessWire reports that TutorGroup is worth $1 billion. TutorGroup is the largest English language online education platform in the world.
The Training Industry provides an annual top twenty list for various types of corporate online training companies.
Not sure if an online courses business is right for you? Try our free Business Idea Generator and find your perfect idea.
What are some insider tips for jump starting an online courses business?
Take advantage of the easy-to-use software tools and templates like those offered by eLearning Brothers to more easily create your online courses. A great resource for online teachers is the Online Learning Consortium.
Starting a brand new, independent website may not be the best option because the classes will be much harder to market. Udemy and Teachable offer course-hosting websites with lots of existing web traffic of people looking for courses to take. Udemy and Teachable offer a great opportunity to reach a large group of customers, though these companies take a percentage of profits.
One way to start a business of this type might be starting with a class hosted through Udemy or Teachable, and then, if your course develops enough of a following and a good reputation you can create your own website to expand the business, thereby capturing all the profits.
How and when to build a team
This is the type of business where it is possible to start as a sole owner/operator. However, if you get enough traction and have enough students you will want to add staff for administrative support, staff (either in-house or freelance) to help increase marketing efforts, and additional instructors if you offer video conferencing courses that have sufficient student demand.