Firstly…
Before we can go any further, we have already made two assumptions about you.
Assumption One
You understand how the mechanics of running your own business work. It would be wrong for us to offer you advice on the best type of company structure for your accredited training company or your legal responsibilities. If you do need advice in this area .gov.uk is a good place to start.
Assumption Two
You already have experience of being a trainer and want to take the next step of starting your own training company. Again if this is not the case take a look at Assessor Training for help and advice. Training is a very diverse industry that can cover many different skills.
What type of course will your company deliver?
Bespoke Courses
Bespoke course are ones written by your company. Bespoke courses do not require you or your staff to be qualified or have any prior training experience.
Accredited Courses
Accredited course are one written by an awarding body, for example, City and Guilds. You need to be registered with the awarding body before you can offer their courses.
Funded Courses
Before you can offer government funded course you must first be accredited to offer the courses and then on their list of approved training companies.
Bespoke Courses
Training is a very diverse industry that can cover many different types and ways to deliver. As a result, the way you go about starting your own training company will vary greatly from person to person.
Below we will look at the factors that need to be considered before starting a training company offering bespoke courses. It is worth mentioning that many topics in the list will apply to all types of training companies, so are well worth a read.
Serious about setting up?
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Should I Be a Specialist Training Provider?
To specialise or not to specialise is one of the most important things to consider when starting your own training company.
There are many arguments in favour of being a specialist and equally many arguments against. The biggest consideration must be the amount of income you can generate if you are a specialist training provider. The figure will be derived from the number of customers you can secure and the training fees you can charge.
Would you rather fewer learners paying a higher tuition cost…
OR
more learners paying a lower tuition cost?
For example, we recently helped a company set up who only planned to deliver training in nursing law. They had a business plan that accepted that the number of companies that could make use of their training was very limited. However, the training fees they could charge were very high.
What they had not recognised, was that their ability to grow as a company was also limited because they planned to be a specialist. As a result of our advice, they agreed it would be better to consider other areas in which they could deliver their training.
On the other side of the argument, we have been working with a hairdressing salon that wanted to set up a training division. Their possible market was huge. Hair and beauty is a growing sector, but it is also very competitive. The training fees the company could charge had to be set accordingly.
The choice is yours
As you can see there are reasons to choose either option. The final decision on whether or not to be a specialist training provider lies with you, the business owner. From experience, our advice to any training company would be this…
From a business point of view, think long and hard before you become too specialist. It is great that you are an expert in your field. This is certainly something that you can sell, but it is worth considering having a greater spread of training courses that complement that specialism. This approach will maximise your clients and minimise your business risk.
Staffing and Skills
The staff that your new training company will require will vary dramatically on the size of your company. However, the skill sets remain the same. It would, therefore, make more sense to look at the roles that are required rather than individual members of your staff team. The reason for this is that if your company is small it may be that one person can take on several tasks. Alternatively, in a large company, you may need several members of staff to cover a single task.
So let’s look at the different roles required.
Course Delivery Staff
The size of your course delivery team will depend on the number of courses you intend to deliver. It is not uncommon in small companies for the owner of the company to deliver most, if not all, of the courses.
As the company grows, either new staff will need to be employed or freelance trainers engaged. Freelancers are very common in the training industry. They have the benefits of not incurring additional overheads for your company and are only used when required. The downside of them is that they may not be available when you need them and they charge more than you would pay an employee.
You may also face another problem if you are a specialist trainer. What if there is not a talent pool for you to dip in to? You need to identify this at a very early stage, and if it is the case, consider what alternatives are available to you. It may be that you have to consider training your own trainers.
The most important issue that you need to address, no matter which route you go down, is how you will maintain the quality of the course delivery when somebody else is delivering it. For many small companies that one issue is the reason they never grow. In order for you to relinquish the course delivery, you will need to ensure that robust quality control measures are in place. You may have the skills to manage your own delivery but are you able to manage the delivery of others?
Your training provider will require at least one Assessor and one Internal Quality Assurer. You can take on one of these roles yourself if you wish, but you cannot take on both roles.
Find out more about how to become an Assessor >>
Find out more about how to become an Internal Quality Assurer >>
Administration Staff
The administration in your training company can be further sub-divided into business administration and course administration.
Business Administration
The business administration needed is the same as it would be for any other type of company. We have already made the assumption that you are already familiar with this, so will not spend time on it here. However, course administration may be new to you, so let’s look at what is required.
On its most basic level, it is no more than ensuring your courses run smoothly. Making sure the right people receive the right training at the right time and location. In reality, do not underestimate how much time will be taken up on ensuring all these things happen.
If you are delivering your courses at an employee’s premises it may be that most of the organisation is dealt with by them. You will still need to check everything is in place for you to go and deliver your courses. If things fail to go smoothly then it is your learners who will suffer, and your company that will take the blame.
Course Administration
In addition to this, you also need to think about what happens post-course. Are there certificates to issue, coursework to mark, results to be uploaded to your system? All this takes time so it is vital that this role is adequately resourced. Do not expect that this can be done alongside the actual delivery. It can’t unless of course, you are happy to explain to clients why things keep getting missed.
If your company is going to offer courses available to the public then the workload explodes. Dealing with enquiries, taking the booking, sourcing venues, catering …… the list goes on and on. An efficient back room will make your life easy, an inefficient one will destroy your company.
What Fees Should I Charge?
When considering what course fees to charge, it may help to think about the different delivery models that can be used. There are fundamentally two basic models:
- delivered in-house
- delivered in your own training venues
However, we can further subdivide these into:
- fees per cohort
- fees per learner
This effectively means we have four different fee structures we can use. This is very useful when you are starting your own training company because the market will often dictate what your fee banding must be. Let me give you an example:
Your company has been asked to deliver one day’s First Aid training at ABC Ltd. Your business plan shows that you need to generate fees of £500 per day, your training venue costs are £100 per day and it would cost £50 to travel to ABC.
If ABC only have one learner, then the in-house fee per learner and your own training venue fees per learner are very expensive, and you will not get the contract.
If on the other hand, ABC tells you they have fifteen learners that day, then your in-house fees per cohort charge of £550 and your training venue fees per cohort of £600 seem very reasonable at between £37 and £40 per learner.
Think About All Your Costs
You may be thinking that £500 per day per trainer seems like a lot of money for your company to be charging. Whilst we are not saying that is the correct figure, there are other factors to consider. How much are your courses in demand and how long will it take for you to produce your bespoke courses? We know of a specialist training company that charges well in excess of £1000 per day, but it takes them over a week to prepare one day of bespoke training. You can see that this quickly bites into your company’s earning capacity.
As a rule of thumb, we would recommend aiming for a ratio of 5:1; five days of preparation for one days delivery.
Please bear in mind that we are talking bespoke training here. If you intend to deliver off the shelf courses, you can deliver them back to back with much less, if any, preparation required. That is why so many people do this and, as a consequence, the market dictates that their cost per course must be lower.
Finally, the fees you charge for your courses must ultimately have due regard to your companies business plan and the market place in which you operate. To that end, market research will be your companies best friend.
Marketing
So you are now the proud owner of a new shiny course. It is the only one of it’s kind, and exactly what the whole world needs. Your company can’t fail to make you a fortune. Right?
Sadly wrong.
Having the course is half of the battle, the other half is getting people to enrol on it.
For many, marketing will be something very new to them. Even to those who have experience in it see marketing as something of a dark art. So to shed a little light into the dark corners of marketing strategy lets start with a few basics.
Marketing – the 4P’s
As was mentioned earlier, I’m assuming that you are already familiar with the running of a business, so I would be extremely surprised if you haven’t come across the 4P’s (Marketing Mix) before. There is a lot to be said for this 50+ year old theory. You have already covered two of these P’s without even realising it; The ‘should I be a specialist training provider’ section talks about establishing your Product. The ‘what fees should I charge?’ section covers your Price. That leaves Place and Promotion.
But before you can set out plans for how you’re going to promote your courses and where you are going to do so, there’s one very important thing you need to do first. If you only end up taking two bits of advice away from this page, then one is what we’re about to go on to next, and the second you will have to keep reading to find out…
Who are your customers?
You need to know your customers! When you are starting your own training company you need to know as much as physically possible about who your customers are. Are your learners going to be predominantly male, or predominantly female? Are the majority going to be between the ages of 18-24, or 24+? What common interests do they have? Are they likely to be tech-savvy and all over Facebook every day or do they just prefer to sit down with a good hardback and a cup of coffee? The better you get to know your learners, then the easier it will be to promote your courses to them. Market research is essential to gathering the answers to these kinds of questions.
Whilst Market research is fantastic, it’s one of those things where, if you have got 3 hours in a day, 1 day a week to spend on it then you can. But, if you have got 8 hours a day, 5 days a week to spend on it then you could easily do that as well. So let’s be realistic here.
You are running your own training company, so at the start you are probably going to be the Managing Director, Marketer, Business Administrator and the Delivery Team all in one. This means that you are going to be limited to how much time you can spend researching your target audience. I’m sure any of you setting up your own business will be more than capable of deciding how much time to allocate to market research. Just remember, the sooner you can start building a detailed picture of what your perspective learners look like (not literally speaking, as I’m sure each one will look quite different), the sooner you can start reeling them in onto your courses. I could bore you all to death for hours talking about Market research, but we need to move on. So if you would like some tips on how to find out more about your target audience then have a read of this Barclays Market Research Case Study.
At this point, I’m assuming you have developed a better understanding of the kind of people your courses are likely to attract. This means that you are now in a good position to start planning exactly how and where you are going to market your courses. This is where we cover those two final pesky P’s: Promotion and Place.
Promotion and Place
To start with, you are probably going to be focussing on Brand awareness. As far as you’re concerned, the more people that know about the courses which you are offering, the better! So get a website up and running, get yourself all over as many relevant social media sites as possible (Facebook, Twitter, Google+, LinkedIn, Instagram), go to networking meetings, send out flyers etc.
Once you have got yourself up and running on all fronts, then you can start to focus in on those target customers that you identified as a result of your market research. This is where you need to try and identify what will be the best method for reaching your perspective learners.
Let’s say you are starting your own training company that will be delivering Institute of Leadership and Management (ILM) courses as an example…
The vast majority, if not all of the learners that would enrol onto an ILM qualification will already be in employment. So, already you know that you are looking at B2B advertising as opposed to B2C.
Again, you will also know that the vast majority of your learners are likely to be occupying a management role within their company. After doing some market research, you identify certain industries are very popular for putting their managers through ILM courses. You also find out that these managers are predominantly male and average between the ages of 40-50.
Now you have a very specific demographic to target. It is going to be pointless wasting too much of your time on social media sites like Facebook and Twitter, because your prospective customer rarely uses these sites and when they do, they only use it to talk about a new car they have bought or their disappointment with the football results from the weekend.
Instead, you can look to target them on LinkedIn which is a networking site for professionals. You can start creating blog posts that relate specifically to those popular industries that you identified. This method doesn’t involve you directly selling your courses, but instead, you have sharable content which is directly relevant to your target customers.
As a result of this, you are bringing in people from the industries you are targeting straight onto your website, where they can go on to find out about your courses.
Now there’s one incredibly important aspect I haven’t mentioned anywhere up until now and that’s because I wanted to save the best for last. You may recall earlier on I mentioned that there were two bits of advice at the very least that you need to take away from this page. The first was that you need to know your customers and the second is…
Don’t Lose Focus!
You need to ensure that you never get too caught up in the business side of things; you need to always remember why you set your training company in the first place – to help people to develop their knowledge and skills. If you do that well, then you will benefit from the best marketing tool of them all; word of mouth.
You will never find a more solid and successful way to market your business than word of mouth. It’s free, it’s trustworthy and you can exploit it just by doing what you do best, delivering quality training! But at the same time, it can come back around to bite you. If learners have a terrible experience with you, they will be twice as quick to go and bad mouth you than they will be to sing your praises.
So make sure you never lose focus on the training.
Hopefully, this has helped you to grasp an idea of how you need to go about marketing your courses. The initial marketing effort is normally the trickiest. But, in many ways, when it comes to marketing your courses you can think of it as a snowball effect. You start off picking up a few learners here and there. They then realise that you deliver high-quality training so they tell their friends and colleagues about your company. This leads to you bringing in more customers. Consequently, more customers mean you are able to raise your marketing budget and reach more of your target audience. The idea is that you end up with one enormous, successful snowball of a business!
Premises
In order to decide on the type and size of the premises, you require we need first of all to break your training company down into its two key functions. Hence we need to look at:
- Back Office – the place where all the company and course administration is done.
- Front Office – the front-facing part of your company that generates the income.
Back Office
An accountant will tell you that your Back Office does not directly generate revenue for your company. They will also say that it has the ability to swallow profits and indeed can turn profits to losses. However, you can equally argue that a good back office can have a positive effect on your bank balance. If both your company and courses run smoothly then this sends out a very positive message about your training company. A message you should be able to convert into new revenue streams.
This does not mean that you must be looking to acquire a suite of offices immediately.
All you need to consider is providing enough space to perform the back office functions comfortably, having due regard to your legal obligations, and efficiently.
Small Companies
For a very small company, this can be as simple as a PC workstation and a dining room table or a spare room in your home. A small word of warning here. If you are operating your training company from your home, think about what image that might send to your prospective customers. With Google maps we can all be a bit nosey and believe me, your prospective customers will be. We would always recommend taking a virtual office package. From as little as £10 a month you can protect your family privacy and project a better, business-focused image. As your business grows then will be the time to consider your own offices and the financial burden that they bring with them.
Larger Companies
For the larger planned training company, the same “enough space” rule still applies. It will be for you, your bank manager and your accountant to consider the different property types and ownership options that are available to your company. Our only advice would be that planning is everything. Spend time carefully planning the amount of space you will need to perform all your back office functions. You do not want to be paying for expensive office space you do not need.
Front Office
Your front office requirements will vary greatly depending on which delivery model you decide to use. Your choice are;
- In-house
- Hired space
- Owned/ Leased space
In-House
If you plan only to deliver in-house training then you will not need any front office premises at all. This may seem very tempting and indeed it is if, and only if, you can be sure that you can get sufficient numbers to make your courses viable. You will, therefore, need to ensure that not only are you targeting large employers but also that you are offering a “must have” course. The downside of both of these requirements is that you will most likely be entering a very competitive market place and your earnings per learner will reflect that. Of course, there is always the chance that your courses are so specialised and the fees you are able to charge are so high that you don’t need to worry about a minimum number of learners. If that is the case then In-house training will be ideal for your company.
Hired Space
If managed carefully, hiring a space to deliver your training can be a very cost effective. It will allow your company to deliver courses closer to your learners without being tied into a lengthy lease agreement. Again, this degree of flexibility is not without its own risk but then what business activity is risk-free. You will need to consider the risk of committing to renting a training room without having any learners on the course yet. Your company may be left with a money-losing empty room. If this does happen to you, I would suggest you need to revisit our marketing section. On a positive note if a particular location does not work you can simply up sticks and move to a new one.
Owned/leased Space
When starting your own training company it can be very tempting to rush out and lease or buy a property to run your training company from. There is tremendous satisfaction in seeing your company name over the door. However, let us be fully aware that this will always be the route that causes most business risk. If having considered all these risks, with your business advisers, you decide that this is the route for you then good luck. Whilst it is a bold move to make, it does demonstrate a strong commitment to your business.
One final note on property.
A blended approach, taking advantage of the benefits of each property type, may well be the most lucrative.
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