Startup cost
$25k
TRUiC Business Ideas
How to Start an Online Courses Business
Decision Snapshot
Online Courses
Idea Score
67
Profit margin
23%
Break-even
9 mo–24 mo
Time to launch
12 wk–36 wk
Demand trend
Stable
5-yr failure rate
—
Capital intensity
Medium
Time commitment
Flexible
Part 1 - How to start an Online Courses business - Background
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.
You may also be interested in additional online business ideas.
Our guide is in 3 parts:
- Part 1 - How to start an Online Courses business - Background
- Part 2 - Our planner tool to see if this idea is the right fit for you
- Part 3 - Action plan to get started
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:
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Creation of Course Materials – $10,000
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Website – $5,000
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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.
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:
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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.
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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.
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To pay instructors, allow $30 per hour for their class teaching time.
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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:
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Fementrepreneur’s system that encourages women to try this business
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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.
Day-to-Day and Growth
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.
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.
Part 2 - Is an Online Courses business the right fit for you?
Business Evaluation & Strategy Tool
We'll walk you through the four pillars every business needs: Points of Leverage, Marketing Strategy, Financial Model, and Personal Compatibility. At the end you'll see a personalized report and your action plan below will be tailored to your answers.
Step 1 of 4 — Points of Leverage
Every viable business has natural advantages. Below are common leverage points across four categories. Pick the ones that apply to your Online Courses business. We've pre-suggested a few based on your idea — review and adjust.
Step 2 of 4 — Marketing Strategy
Without a way to connect with customers, even great businesses fail. Pick the channels you plan to use to reach your customers.
Step 3 of 4 — Financial Model
Enter your monthly baseline costs — the minimum overhead to keep the business running. Then we'll calculate how many sales per month you need to break even.
Step 4 of 4 — Personal Compatibility
A business that doesn't fit your life will fail no matter how good the numbers look. Tell us how this business fits you.
Your Online Courses Evaluation Report
Complete the four pillars and your personalized summary will appear here.
Points of Leverage
Marketing Strategy
Financial Model
Personal Compatibility
Part 3 - Action plan to launch your Online Courses business in 90 days
Nine concrete steps to take you from idea to open business, grouped into 30-day phases. Complete the planner above and we'll highlight what's most important for your situation.
First 30 days — Foundation
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Form your legal entity
An LLC keeps your personal assets separate from business debts and lawsuits — the most common reason small business owners choose this structure. Sole proprietorships and partnerships do not provide this protection.
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Get an EIN and register for taxes
Apply for your free Employer Identification Number through the IRS, then register for any state or local taxes that apply to your business (sales tax, franchise tax).
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Open a business bank account and credit card
A dedicated business account is required to maintain personal asset protection. Mixing personal and business finances ('piercing the corporate veil') can void your LLC's liability shield.
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Set up business accounting
Recording expenses and income from day one makes tax filing easier and lets you see when the business is actually profitable. Use software (QuickBooks, Wave) or a part-time bookkeeper.
Days 30–60 — Compliance & Risk
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Get permits and licenses
State and local requirements vary widely. Brick-and-mortar businesses typically need a Certificate of Occupancy; service businesses may need specific professional licensing; food businesses need health permits.
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Get business insurance
General Liability Insurance is the most common starting point. If you'll have employees, most states require Workers' Compensation. Specific industries need additional coverage (product liability, professional liability, etc.).
Days 60–90 — Launch
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Define your brand
Your brand is how customers perceive and remember you. A clear name, logo, and visual identity make every later marketing decision easier and protect you legally as you grow.
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Create your business website
Every legitimate business needs a website. Social media pages are not a substitute — you don't own the platform. Modern website builders mean you can launch a clean site in a weekend without a developer.
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Set up your business phone system
A dedicated business number keeps your personal life private, makes the business look legitimate, and lets you route calls professionally. Cloud phone services start under $20/month.