Training company: determining how much to charge for your training services

If you are in the training business, or want to, you will be challenged to determine how much to charge for your training programs. It can be a frustrating and intimidating process. Keep in mind that professions like doctors and lawyers, and yes, even plumbers, have highly variable rates. The field of training is no different. You can get some guidelines from a professional organization like ASTD (American Society for Training and Development), or you can probably find information online.

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

• your training subject (“basic” training, such as teaching a computer program, is cheaper than “soft skills” training, such as leadership development, which adds brilliance and marketability to executives)

• your experience and reputation (someone in the business for 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, for example whether your training offers a measurable improvement in performance, such as mastering a new skill, compared to learning from a book or ‘feel good’ results

• what the customer will pay (corporations with deeper pockets of training won’t flinch at a fee that a smaller company might reject)

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

• If you’re charging by the hour (probably not the best option unless you’re doing a lot of consulting or individual training), the rates are likely to range from $ 50 to $ 500 an hour, depending on all of the factors listed above. You can offer a “quantity discount” for multi-hour projects.

• If you are offering public seminars, where people sign up on their own to attend your program (in a hotel meeting room or in your own classroom), you will probably charge per person. Your goal is to fill seats, so your prices should feel like a “bargain”, so a lot of people will sign up. Common prices for these types of programs are usually around $ 99 or $ 129 per person.

• If you are going to do your business with companies, it is probably the most practical to charge per workshop. Depending on the nature of the program, the intensity of your learning environment, your intended audience, and the other criteria above, it could range from $ 500 to $ 10,000 per day. I guess the most typical is $ 2,000 to $ 5,000. There are always some fixed costs in a workshop, no matter how long, so a shorter session will seem proportionately more expensive. Also, the charge for a longer session will be proportionally less, as the fixed costs are spread over a longer time. So for example, let’s say you charge $ 2,500 for a one-day program. For half a day, you can charge $ 1,500 (more than half of the $ 2,500). For a two-day session, you can charge $ 4,000 (less than double the $ 2,500). Likewise, if a client wishes to hire you to deliver their one-day program more than once, they will likely deduct your charge. So using the same example of $ 2,500, if your client wants you to deliver that program five different times, then you could charge a total of $ 10,000 or even $ 8,000 instead of $ 12,500.

Two other cost issues to consider:

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

• The other cost problem is expenses. It is standard business practice to pass on to the client any bona fide expenses incurred as a result of the delivery of this training, such as travel expenses, meals, mileage, parking fees. But be careful. Many things you have purchased for your program would not be considered appropriate transfer fees. These would be items that are an essential part of your training, such as name tents, candy, notebooks, pencils, etc. It is understood that your rate includes these types of costs.

Regardless of what you charge for the training and materials fee, make sure it has been agreed in writing in advance.