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So you want to start a training company? The recent economy has made entrepreneurs out of a lot of training professionals hoping to create their own business and become independent. Over the past few months, I’ve had the opportunity to speak with quite a number of training professionals who have decided that now is a good time to start their own training business.
My first response is kudos to all of them for their courage and initiative! But let’s be clear – starting a training company is not for the meek and mild! My experience has taught me that there are some fundamental things you must do to be successful.
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 entry 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 a challenging and painstaking task. Sadly, many people who start training ventures neglect to lay the proper foundation before hanging out their shingle, or follow basic tenets once the business is up and running. All too often they 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.
9. Be Fully Committed. If you want to be a successful training entrepreneur, you must act the part. Hesitancy manifests itself into passive behavior.
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.
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.
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.
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.
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.
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.
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 1 suppliers buy from tier 2, 3, or 4 suppliers.
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.
If you want to read the entire article, click here. And as always, we would appreciate your comments and feedback. Please feel free to offer any advice to beginning entrepreneurs about starting their business.