Over the past few months, I’ve had a number of conversations
with training professionals who have decided that now is a good time to start
their own training business. Some plan to launch their business as a consulting
practice, where training will be a component of their plan. Others say they intend
to form pure training companies that offer customized services to suit client
needs.
My first response is ‘kudos’ for their courage and
initiative in becoming entrepreneurs. It’s good news for them that the barrier
of entry into this market is extremely low. All you need is a website and
business card, and you’re ready to greet the world as a bona fide training provider.
No certification is required, no validation necessary, and definitely no advance
fees are needed to gain entree into the corporate or business training field.
My second response is a variation on the familiar business
mantra: ‘Entrepreneurs beware.’ Launching a training company is not for the
meek and mild. Sadly, many people who start training ventures neglect to lay the
proper foundation before hanging out their shingle, or follow basic tenants
once the business is up and running. They often pay a heavy price for these
omissions.
It’s one thing to know about training. Running a successful
business is another skill entirely. According to the Small Business
Administration, the failure rate for cross-industry business failures is nearly
60% in the first year. While the SBA has no specific data regarding training companies,
my guess is the numbers are similar.
As one who started his own training business after managing
a training organization for a large corporation – and made some mistakes along
the way – I feel qualified to share what I believe are the fundamental steps you
should take before starting a training business. Regardless of whether you want
to be a contract designer, instructor, or consultant, or you want to create a learning
technology or product, these tips will help ensure your success and reduce your
risk of failure.
Doug’s 10 Tips for
Starting a Training Business
10. Possess the Right
Credentials. If you are starting a new training business, it helps
immensely to demonstrate that you possess the knowledge, education, or
validation that proves you know more about the subject than others. A valid
credential may be an advanced university degree, industry recognized
certification, professional license, or something that comes from an
independent third party. Experience is also important. It quantifies the time
you have invested in certain situations, even though it doesn’t qualify your expertise
at that skill. Leverage your credentials with experience to differentiate
yourself as a thought leader.
9. Be Fully Committed.
If you want to be a successful training entrepreneur, you must act the part.
Hesitancy manifests itself into passive behavior. I’ve seen too many training entrepreneurs
fail because they passively approach day-to-day activities. Starting a business
isn’t a fast process; it can be a grind. Success comes by working through the
failures on an even keel, and not getting too high on early successes.
Commitment means not accepting failure. We’ve all heard that success comes to
those who work hard. I believe hard work can be defined by commitment to
succeed.
8. Productize Your
Offerings. Most training start-ups struggle to accurately define their
capabilities and services. They promise the customer they can do anything the
customer wants. But clients buy specific products and services, not a nebulous
claim of proficiency. If your main business is a service, then productize that
service. Model it, and graphically show it. Anyone can claim they do custom
course development, but to differentiate yourself, you must define and name the
proprietary process for your course development better than others. For
example, Accenture has productized strategic alignment under the name Business
Interlock, while Intrepid Learning Services productizes its assessment service
as JARS. You can 
do it too.
7. Articulate your
Value. Once you have created a product, you must articulate its value to
the client. A value proposition is not why you
think you’re special, but why your client
should think you’re special. Take your time to define it succinctly and
convincingly, and then test the message with others to see if it works. But
remember: If you can’t adequately explain your value proposition, you can be
sure your client will not understand.
6. Publish, Publish, and
Publish some more. Buyers of training products and services are proficient
at researching potential suppliers. They use internet search engines and look
for things that thought leaders have done in the past. One of the best
marketing strategies for any new (or mature) training company is to leverage their
knowledge. Show the market that you are the expert in your field. Publish
articles, blogs, and case studies, anything that documents your expertise. Your
ability to articulate concepts and thought leadership in writing is a great
example of who you are and what you can do for prospective clients.
5. Network with
Buyers. Many well intended individuals advise that you should get to know
as many people as possible. They are partly correct. Yes, networking is
important, but getting to know the RIGHT people is the goal you should strive
for. I often find start-up entrepreneurs attending meetings and conferences
that have no buyers. Why are they there? Make sure the events you attend have
the people you need to meet. Also, develop and 
execute an aggressive plan to
meet potential buyers of your services. Don’t attend events that are full of
the same people as you -- places where others are looking to start a business
or land a job. They don’t buy from you. Success comes from getting to know as
many people as possible who buy your kind of products and services.
4. Speak Your
Customer’s Language. Many people who
enter the training business speak their own lingo, expecting the buyer of those
services to understand. Some try to impress with using industry based language.
But remember that buyers of training products and services are not always
training professionals. In fact, more than two thirds of the value of training
purchased is done by non-training professionals. So communicate your offerings
and your value proposition into words that your customer understands.
3. Limit Non-binding Partnerships.
The life of an entrepreneur can be a lonely existence, especially if one hasn’t
yet attracted customers or hired employees. Start-up entrepreneurs often seek
relationships with others who are non-threatening and help them feel they are
not in this business alone. Be careful. These relationships can become a
distraction if they are not, or won’t become, contractually binding partnerships.
Relationships should be about growing your business, not making you feel good.
If you are going to form some kind of partnership, do it with people who have
the same objective: making money for YOU. Minimize relationships that don’t pay your
bills.
2. Create a Supply Chain. Recognize that the training industry is very
large and complex with multiple levels of buyers and suppliers. A common
mistake is to think that your only clients are the end customer of your
services. Many tier 4 suppliers sell into tier 3, 2 or 1 suppliers. There is plenty
of business to be had by training consultants who sell through another, larger
training supplier that has an established channel to the end customer. Find the
right supply chain for your business, and don’t limit your opportunities to
selling direct.
1. Capitalize Your Business. This is rule number one, the absolute most
important thing you must do when starting your training company: Make sure you
have the proper amount of cash to make it through the sales cycle. I recommend
you have at least six months of working capital on hand to get through the ebb
and flow of cash management. It is frequently said that the number one failure
of start-up businesses is not having the proper level of cash for the business
they are in. Training is no different.
