Training Business – Determining How Much to Charge For Your Training Services

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If you're in – or want to get into – the training business, you're going to face the challenge of determining how much to charge for your training programs. It can be a frustrating and intimidating process. Keep in mind that professions like physicians and attorneys, and yes, even plumbers, have widely varying rates. The training field is no different. You could get some guidelines from a professional organization like ASTD (American Society of Training and Development), or you could probably find some information online.

But here are some considerations and guidelines to keep in mind. First of all, fees are based on a number of factors:

your training subject (“commodity” training, like teaching a computer program, is cheaper than “soft skills” training, such as leadership development, that add polish and marketability to executives)
your experience and reputation (someone in the business a long time, with an established client list, and other credentials, such as a published book, will simply be able to charge more than a “newbie”)
the perceived value of your training results, such as whether your training delivers a measurable improvement in performance, such as mastering a new skill, versus just some book learning or “feel good” outcomes
what the client will pay (corporations with deeper training pockets won't flinch at a fee that might turn away a smaller business)

While there are no set industry standards for fees, here are some guidelines you can use:

If you're going to charge by the hour (probably not the best choice unless you're going to do a lot of consulting or individual coaching), fees range from probably $50 to $500 an hour, based on all the factors listed above. You might offer a “quantity discount” for multiple-hour projects.

If you're going to offer public seminars, where people register on their own to attend your program (in a hotel meeting room or your own classroom), then you'll probably charge per person. Your goal is to fill seats, so your prices need to be perceived as a “bargain,” so lots of people will sign up. Common prices for these types of programs are usually something like $99 or $129 a person.

If you're going to do your business with companies, it is probably the most practical to charge by the workshop. Depending on the nature of the program, the intensity of its learning environment, the audience it's intended for, and the other criteria above, it could range anywhere from $500 to $10,000 a day. I'm guessing that $2,000 to $5,000 is the most typical. There are always some fixed costs in a workshop, no matter what its length, so a shorter session is going to appear proportionately more expensive. As well, the charge for a longer session will be proportionately less since the fixed costs are spread out over a longer time. So, for example, say you charge $2,500 for a day-long program. For half a day, you might charge $1,500 (more than half of the $2,500). For a two-day session, you might charge $4,000 (less than twice the $2,500). By the same token, if a client wants to contract for you to deliver your one-day program more than once, then you'd probably discount your charge. So using the same $2,500 example, if your client wants you to deliver that program five different times, then you might charge a total of $10,000 or even $8,000 instead of $12,500.

Two other cost issues to keep in mind:

One is a materials charge. If you prepare materials for the participants, such as handouts or course workbooks, it is appropriate to charge something per person for those materials. You have a couple of options: you charge what it cost you to prepare them, in which case, you'd include the printer's bill as an expense receipt with your invoice. The other option is to mark the materials up, so you can make a little profit. The amount of the mark-up is up to you. You just want to do whatever makes the per-person fee reasonable. One client might think $20 a head is unreasonable, another client might not flinch at $100 each. You have to know your client and the perceived value of your materials.

The other cost issue is expenses. It's standard business practice to pass through to the client any bona fide expenses you incur as a result of delivering this training, such as travel expenses, meals, mileage, parking fees. Be careful though. Many things you may have purchased for your program would not be considered appropriate pass along expenses. This would be items that are an essential part of your training, such as name tents, candy, notepads, pencils, etc. It's understood that your fee includes those types of costs.

Whatever you charge for your training and materials fee, make sure it's been agreed to upfront in writing.

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Source by Barbara Busey