Exam Preparation and Tutoring Services

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 8,900 exam prep and tutoring service providers in the US offer preparation for standardized tests and academic tutoring programs. Some firms provide basic education and personal improvement programs. Firms may also specialize in occupation, technical, and trade professional development. The industry includes non-profit organizations, franchises, chains, and independent operators.

Online Tutoring Disrupts Industry Model

Online tutoring and exam prep programs expand reach, but also create competition for traditional centers and independent tutors.

Slowing Demand, Heavy Competition

Weaker demand and increased competition are expected to limit revenue and profit growth for exam prep and tutoring service providers.

Industry size & Structure

The average exam prep and tutoring service provider operates out of a single location, employs 13 workers, and generates about $663,000 annually.

    • The exam prep and tutoring services industry consists of about 8,900 firms that employ about 112,000 workers and generate $5.9 billion annually.
    • The industry includes nonprofit organizations, franchises, chains, and independent operators.
    • The industry is concentrated at the top and fragmented at the bottom; the top 50 companies account for about 41% of industry revenue, with the top four companies accounting for 14% of industry revenue.
    • Large companies include Huntington Learning Centers, Sylvan Learning Centers, and Princeton Review.
                                Industry Forecast
                                Exam Preparation and Tutoring Services Industry Growth
                                Source: Vertical IQ and Inforum

                                Recent Developments

                                Jan 9, 2024 - Moderate Sales Growth Expected
                                • Exam preparation and tutoring service industry sales are forecast to increase at a 5.17% compounded annual rate from 2022 to 2027, faster than the growth of the overall economy, according to Inforum and the Interindustry Economic Research Fund, Inc. Industry employment continued rebounding during 2023 and reached pre-pandemic levels in November.
                                • Over 80% of public schools reported offering some type of tutoring program for the 2023‒24 school year, according to the National Center for Education Statistics. Some schools outsource tutoring to private tutoring services. Of schools providing high-dosage tutoring, about three-quarters reported that the program was moderately, very, or extremely effective.
                                • The 2023-24 school year is the last full year in which districts can spend down what remains of the $180 billion in federal Covid-19 aid. Tutoring organizations whose services were funded by federal Covid-19 aid may be negatively impacted. “The loss of some of that money will destabilize districts,” said Marguerite Roza, the director of Edunomics Lab, a Georgetown University research center. “They have this complicated task this year of hurrying to spend it down while simultaneously planning for it to be gone.” High-poverty districts typically received more emergency relief and now face steeper cuts as the money runs out.
                                • Consolidation in the higher education sector is accelerating as students continue to pack into flagship universities and brand-name colleges while less-prestigious schools struggle. About 200 colleges closed in the past 10 years, four times more than during the previous decade, according to data compiled by the consulting group EY Parthenon. There have been 95 college mergers in the past four years, compared with 78 over the prior 18 years. Experts cite rising costs for college and uneven return on investment, which has diminished public confidence in higher education, opened the door to competitors, and led to falling enrollment.
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