Advantages and disadvantages of online learning from a business perspective

Advantages and disadvantages of online learning from a business perspective

Technology has improved significantly over the last 20 years to the point where it is now quite easy and cost effective to provide online training services. While many independent tutors and training companies see this as a welcome change in the industry, it also poses many threats to existing businesses. Many articles look at the advantages and disadvantages of online tutoring from the student’s point of view – this article will explore this topic from the tutoring business’s point of view.


Having online tutoring technology is most beneficial for new tutors or tutoring companies that are not yet established in the market. Online lessons require low start-up costs, open the trainer to a much larger market and offer more scheduling flexibility. Let’s take a look at each of these benefits one by one:

Lower barriers to entry

Although many independent tutors also have low start-up costs, if you are a tutoring company and decide to go online, you can avoid many of the costs associated with starting a traditional tutoring company. Traditional companies often require an office for administration or where classes are held, marketing through local media, driving to meetings with potential clients, etc. Online tutoring companies do not require an office other than a home office and they definitely do not require a building to teach students. Online marketing is less expensive and can be targeted more directly than traditional marketing, and customer conversations can be done online or over the phone. These low start-up costs make it much easier for new businesses to start online.

A bigger market

Traditional tutoring companies are limited by geography—they cannot cost-effectively serve students outside of their geographic area due to time constraints associated with transportation and transportation costs. For this reason, tutoring companies have much smaller markets and can only enter new markets by adding new locations. Online learning businesses do not face this limitation. They can reach anyone with an internet connection and the only real limitation is language. For this reason, many people prefer to start an online tutoring company so that they can reach a much larger market. This can be a very good strategy if your company teaches a highly specialized subject that will not have enough people locally to support the business.

Tutoring companies can also recruit tutors from a much wider area and may be more successful in finding high-quality teachers for the subjects they offer.


Online tutoring companies have more flexibility as they can choose to tutor students in different time zones. Teachers who are only available to teach in the late evening can easily teach students from a later time zone where it is afternoon. This makes it easy for independent educators to fit their studies into their personal or work schedules.

Lower operating costs

The ongoing operating costs of running an online tutoring business are also lower than traditional tutoring. Some of the eliminated costs come in the form of building leases, telephone, transportation and marketing. Online tutors can do everything from their home, can use free or cheap online phones like Skype to communicate, and don’t have to spend money driving to the tutoring office or to clients’ homes.


Many of the benefits of online tutoring can also present challenges for tutoring companies. We will go through the disadvantages below one by one.

Lower barriers to entry

Low barriers to entry make online lessons attractive to new training companies, but for established companies this is a negative as it makes it easier for new companies to enter the market and compete with them. This ultimately leads to greater price competition and lower profit margins.

Competition from other markets and other countries

Online lessons overcome the geographical barrier, which is also a disadvantage of existing lessons. This means that instead of only facing competition from tutoring companies in their immediate market, they now face competition from tutors in other parts of the country and in other countries as a whole. Many online tutors are from countries like India where the cost of living is much lower. They can teach American students online and charge a price that is still much lower than standard rates in the United States, but still well above what they would earn for lessons in their own country.

Technological limitations of students

While most people have a personal computer at home and access to the Internet, many students who need tutoring do not have the necessary technology to receive online tutoring. In addition to a computer, a high-speed internet connection is ideal, headphones and a microphone are required to talk to the tutor, and hardware such as a writing board may be required depending on the subject. This means that if your business only wants to provide online classes, there will be a lot of students you cannot reach.


While online lessons can be effective, there are certain subjects where communicating face-to-face and explaining concepts on a piece of paper is more effective than communicating online. It can also be more of a challenge to keep students engaged when teaching online, which can have a negative effect on student progress.

Online tutoring creates both opportunities and challenges for the tutoring business. By understanding and assessing these challenges, training companies will be better prepared to respond to them and adapt their business strategies to the changes it brings to the industry.

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