The Industry Of Tutoring And Test Preparation

Mother and her daughter reading a book

Tutoring and test preparation franchise sector offers tutoring services and exam preparations. Colleges, universities as well as academic schools are excluded in this industry and also schools which offer instruction in driving, business, computers, management, trade areas, technical areas, languages and athletics and fine arts. The businesses in this industry have continuously grown in the last few years.

Trends in the Industry and Analysis

The recession seven years ago which brought a poor economic environment has slowed down the demand for the franchises in the tutoring and test preparation industry during those times. During those times, there were a growing number of schools both in the primary and college level. However, the demand in the industry for their services was undermined because of a very high unemployment rate as well as low disposable income. But as the economy improving, analysts are expecting that the industry growth will be strengthened in the coming years. In addition to the expected growth in the disposable income, the industry is also deemed to continue to benefit from the expanding markets especially the ballooning of enrollments for the college level. And as the industry is becoming more affordable, one could only look forward to the improvement of the industry.

Industry investment

Accordingly, the test preparation and tutoring franchise industry has a low level of capital investment. In a report, for every $1.00 spent for labor this year, the industry operators invest an estimated $.05 only on its capital equipment. For this particular industry, the capital investment heavily relies with other education related industries. They are also limited only to computer software in order to compliment the in-person tutoring. In addition to having a facilitating learning, the computer software also allows the larger operators to automate the grading services and the test deliveries which slightly reduce the requirements for labor. However, in the last five years, capital intensity in the industry has declined. Five years ago, for every $1.00 that was spent on labor, the industry operators invested approximately $.06 on capital equipment. Still, the forecast in the industry is quite hopeful and tutoring in Downey has never been attractive before.

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