Most tutors track one thing: what came into the bank this month.
It is a reasonable place to start. The trouble is that it tells you what has already happened, not what is about to. By the time a quiet term shows up in your bank balance, the reason it happened was probably three months ago.
KPI stands for key performance indicator. It is a slightly grand name for a simple idea: a small number of measures that tell you early what is changing, so you can do something about it while there is still time.
A good dashboard does three things. It shows whether you are making money, whether cash is getting tight, and what is driving both.
The rules for a dashboard you will actually use
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- Eight is plenty. If a KPI does not change what you do, take it off.
- Fix the definition. Same formula, same day of the month, every month.
- Show the trend. Three months minimum, six to twelve is better.
- Give every KPI an action. If it moves the wrong way, what do you do?
One thing that is specific to our world. Tuition income has a rhythm: August is quiet, September is busy, January picks up. Seasonality is normal, so compare each month to the same month last year as well as to last month. Otherwise you will read the calendar as a crisis.
The 8 KPIs and how to use them
1. Revenue and revenue split
In plain English: your income, and where it came from.
Track total income for the month and for the year to date. Then split it by stream: small group tuition, one to one, holiday intensives, courses, resources.
Action trigger: revenue can rise while profit falls. It happens when growth comes from the streams that take the most work and pay the least. Always read the split before you celebrate.
2. Gross margin percentage
In plain English: what is left after the costs of actually delivering the teaching.
Gross margin % = (revenue minus direct costs) ÷ revenue
Direct costs are the ones you only pay because a session is running: tutors you pay, printing, workbooks, resources, exam papers, your teaching platform.
Action trigger: a drop of two or three percent is worth investigating straight away. It usually points to fees that have stood still while costs have not, or to work that quietly costs more to deliver than you thought.
3. Net profit percentage
In plain English: what is left after everything, including the costs that run whether you teach or not.
Net profit = gross profit minus overheads
Overheads are your booking software, insurance, subscriptions, accountant, website, marketing.
Action trigger: if gross margin is steady, but net profit is falling, your overheads have drifted. Subscriptions are usually the culprit.
One thing that is specific to our world. Tuition income has a rhythm: August is quiet, September is busy, January picks up. Seasonality is normal, so compare each month to the same month last year as well as to last month. Otherwise you will read the calendar as a crisis.
4. Labour as a percentage of revenue
In plain English: how much of your income goes on paying your tutors.
Labour % = total tutor pay ÷ revenue
If you have a team, this is your largest cost and your largest risk.
Action trigger: if it climbs for two months running, one of three things has to change: your fees, how full your groups are, or how many tutors you are carrying.
No team yet? Swap it for hours taught against hours worked. If that gap is widening, admin is eating your business.
5. Utilisation rate
In plain English: how full you are.
Utilisation = teaching hours delivered ÷ teaching hours available
If you run small groups, measure seats rather than hours. Four pupils in a group of four is full. Two is half a group costing you a whole session.
Action trigger: a small fall here shows up in your margin a month or two later. It is your earliest warning, which makes it the one worth watching most closely.
6. Average revenue per pupil
In plain English: what a typical pupil is worth to you each month. You may see it called ASP, or average selling price.
Average revenue per pupil = revenue ÷ number of pupils
Action trigger: if it drifts down, you are discounting, or newer pupils are on cheaper arrangements than your longer standing ones, or your fees have simply not moved in a while.
7. Retention rate and churn
In plain English: how many pupils stay and how many leave.
Churn % = pupils who left ÷ pupils you started the month with
Count what you opened with, who joined and who left.
Action trigger: this is the one most tuition businesses miss. Losing two pupils a month and replacing two pupils a month feels like standing still. It is not. It is a marketing cost you are paying in order to stay in the same place. Some churn is fine, because pupils finish their exams and move on. Anything beyond that is worth understanding.
8. Cash runway
In plain English: how long you could keep going on the money you have.
Cash runway = cash at bank ÷ average weekly outgoings
Use payroll plus your fixed costs if you want a simpler version.
Action trigger: when it drops below the level you are comfortable with, stop guessing. Chase what you are owed, pause the optional spending and think hard about the timing of a new hire.
How to review the dashboard in 20 minutes
Same time every month. Put it in the diary.
- What moved, and by how much? Facts only, no debate.
- Why did it move? One or two drivers, not ten.
- What are we doing next month? Three actions, no more.
Write the actions down with a name against each one. Look at them again mid month. A dashboard you read but never act on is just a report.
Quick wins
- Remove any KPI you cannot explain in one sentence.
- Show six months of trend, not just the latest month.
- Set a green, amber and red threshold for each one so you can read it at a glance.
- If late payment is your headache, add debtor days (trade debtors ÷ revenue × days) and check it weekly rather than monthly.
- Compare every month to the same month last year, not only to last month.
In short
A small dashboard buys you time. Time to fix a quiet term before it becomes a cash problem, and time to spot the parts of your business that are quietly carrying the rest.
Review it monthly and treat it as a tool for running the business, not a job to tick off.
If you would like help applying this to your own numbers, book a call.