Three Questions to Answer Before Starting Your Own Training Company
Whenever someone asks me for advice about starting a commercial education venture, I tell them that the three most important factors are:
1) Is there a need? 2) Is there a willingness to pay? 3) Do you have a pipeline to the buyer?
These are the three legs of the stool that will support your training venture. It’s not about whether you know what needs to be taught, can build/deliver the curriculum or have a great learning methodology. You’ll need those, too, but you can acquire all of them.
The need for the learning is about whether the student has a compelling reason to enroll and complete your training. Of course, the ideal is that the training is required (compliance, maintenance of certification, etc.).
If the training will help them get a good job or advance their career, you may be successful, but don’t fool yourself into thinking that it’s a need. Rather, it’s a highly desirable “want,” it will require a different marketing approach, and your venture will be riskier than if they must get the training. And if the highly desirable want is about a better job or career advancement, there needs to be a straight line between the education and that better job or career advancement—or the education is a “nice-to-have” and the likelihood of success is much less.
Willingness to pay is often taken for granted but is as important as the others. It also implies willingness to pay a tuition level that’s profitable. If the target student needs or strongly wants the training but just doesn’t have the wherewithal to afford it (personal funds, government subsidies or employer funding), likelihood of success is minimal.
Having a pipeline to the buyer is all about whether you have a way to reach your target market and whether, when you reach them, they know who you are. An organization that already has an audience, membership or customer base (for another product or service) has a much better chance of success than one that doesn’t have a following/crowd/tribe—assuming the organization has a better-than-neutral reputation with their followers.
All three elements (need, willingness to pay, and a pipeline to the buyer) are critical, but more ventures are missing the third one and don’t realize how important it is.