Blog #2 for RTOs - a focus on profitability

4-point checklist.

To make sure you’re making money! #needtoknow

To run a viable training organisation, you need to know the cost of running a course, and how profitable it’s going to be. You need to know how many students you need to break even or preferably make a profit, and if it’s even worth running. And when a course has been delivered, you need detailed analysis to make sure your forecasting was accurate.

With any business, knowing the financial impact of the decisions you make is critical to ensuring long term success. The biggest struggle for many businesses is all the inputs that you must take into account. Education and training is particularly challenging as you’re required to constantly grapple with changes in government policy, loans and increasing competition.

So, what’s the key to making profitable decisions about which courses you should run?

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There are 4 key steps that you, as an education and training provider, can take to ensure you can make sensible decisions on the profitability of your business.



It goes without saying that you have to know your market, understand your profit formula, and use analytical tools to do due diligence on your forecasting. You need to ensure that you have enough people attending the course to make it profitable. While this is mostly a numbers’ game, you also need to be careful to measure where profitability starts to plateau. You don’t want to expend a massive amount of effort to support more students than you needed to make the course profitable.



Tutors can up and leave, governments can – and frequently do - change the rules, and the skills that you’re providing training for could suddenly become irrelevant. While it’s tempting to sit down and think of all the good reasons to deliver a course, consider the risks as well. Play devil’s advocate. List them out and work out the best and worst-case scenarios. Also make sure you record these details against qualifications/units and revisit them regularly.



Make sure that the experience that you’re going to provide your students is a good one. And monitor it to make sure that it’s living up to their expectations. Much of the education and training market is aimed at people aged 25 years and under, and they can smell cr*p from a mile away. Everything they do and use in this world, from their mobile phones to their cars, has been tested and re-tested for its usability. So, if you leave the presentation and polish out of your training, then you’re likely to end up with students that aren’t engaged and leave yourself wide open for competitors to make you look boring and irrelevant.



For all the effort you put into making your education and training dream a reality, don’t relax and take your eye off the ball once delivery has started. You need to continuously monitor the progress of the training, delivery and the student experience. Be ready to respond to feedback or to rework things on the fly. If you don’t, you’ll end up with students that aren’t happy with their outcomes and word will spread like wildfire. Just check the Facebook comments section of some of the less reputable RTO and you’ll see what I mean.


The above 4 steps are not exhaustive, but they are critically important. One of the biggest challenges is delivering success as well as meeting your audit and compliance needs at the same time.

And one more thing…

There’s one big thing that I’ve left off the checklist.

That’s to make sure that you have systems in place that enable you to do all of the above. Even medium sized RTOs are going to struggle without the use of technology. There are a massive range of solution options out there, and new emerging technologies that can help you analyse your business and track your performance against your objectives.

Bottomline - ensure you have a technology partner who is up to the challenge.

5 ways today’s RTOs can use technology to improve business outcomes

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Great outcomes start with great conversations.