How to Start a Successful Training Company (Part 1)
This is the first in a three-part series. Part one is an introduction to selling learning content to individuals and organizations. Part two will examine the most important learning management system requirements to support the sale of training. Part three will show how Absorb LMS meets the needs of commercial course providers.
Tim Ferriss's 4-Hour Work Week made number one on the New York Times and Wall Street Journal non-fiction bestseller lists a few years ago. This book presented a methodology for creating a successful online business that required little effort to maintain. The book described the ability of Mr. Ferriss to earn, at times, tens of thousands of dollars per month from online sales of a nutritional supplement he had invented; all by working four hours per week. The book's premise—that it's possible to earn a great income with little effort—appealed to the unemployed, those working in jobs they hated, and the 80-hour per week, soon-to-be burnout victims who felt trapped in a pattern of living to work rather than working to live.
In recent weeks, I've spoken to a number of prospective clients who are looking for a learning management system (LMS) to sell learning content they have produced. Some are looking to acquire their first LMS. Others, wiser from bad experiences, are looking to switch from a system that does not meet their requirements to one that does. What's clear from speaking to these learning providers is that if planned and implemented correctly, it's possible to create a successful online learning company similar to some of the businesses described in Tim Ferriss's book. You'll need to work more than four hours per week (I'll discuss ways to keep the administrative effort low in part two of this series), but the revenues and profits can be impressive. How Successful?
Here's an example. One course provider I spoke to last week has 300 unique learners per month paying $299 per course. Each course takes a learner about 15 hours to complete. That translates into annual revenues of $1,076,400. The company sees growth ahead and predicts they'll soon have 500 learners per month, raising annual revenues to $1.8 million.
To succeed in this type of business, you'll need the right content and technology. Let's consider content. Your odds of succeeding selling courses on easy- to-learn topics with heavy competition are low. Focus on niche topic areas where learners and organizations are highly motivated and willing to pay you fairly for access to your content. Leave the "Introduction to Microsoft Word" courses to the big-name, off-the-shelf course library providers and bloggers of this world.
Compliance and Regulatory Training Certification training topics in regulated industries are a good place to look for content ideas. Learners will gladly pay to take your course if the resulting certification will advance their careers. Organizations will happily send you their learners for certification training if it reduces the risk of liability from having unqualified employees. If your learners need to be recertified regularly, you'll benefit from the financial stability of recurring revenues. Your revenue growth will come from adding new learners. This is a great business model; significantly better than one where you need to continually be chasing new customers to buy a course they only need to take once.
Once you have found a potential topic area, look at who your competitors will be. If there are many companies providing similar courses, and if they seem established or are selling their courses at a lower price point than you envisioned, continue your search. Once you've found an appropriate topic area, consider partnering with a subject matter expert for the creation of the content. You want to get good content authored quickly. You and the subject matter expert will need to spend considerable time becoming experts on the regulations behind the certification training you provide. This will require ongoing effort since regulations change.
The good news though, is that changes in regulations will often mean that learners who have already taken your courses will need to update their training to maintain their certification. This will provide an additional source of revenue for your firm. In part two of this series, I'll discuss the critical learning management system features you need to succeed selling online learning content.