Expensive Hobby or Profitable Business

Which RTO Are You Running?
Once again, I've drawn inspiration from one of my favourite movies Top Gun and I believe this quote from Stinger sums up the state of many RTOs.
Maverick, you just did an incredibly brave thing.

What you should have done was land your plane!

You don't own that plane, the taxpayers do!

Son, your ego is writing checks your body can't cash.

Not only is it a great line from the movie, but too often, I see ego (mixed in with the best of intentions) driving RTOs rather than good business sense.

So what do I mean by this?

Most RTOs (like most small businesses) are run by fantastic trainers which Michael Gerber, author of the E-Myth calls 'Technicians', but unfortunately, they are not the best business owners or CEOs.


Because this is not what they are good at, they don't have the business experience or skills, and they haven't undertaken professional development to run an RTO BUSINESS.

But because they know the VET landscape and the world of compliance, this is often the only credential which RTO Owners and CEOs deem necessary to run an RTO.


Many RTOs are run more like expensive hobbies than profitable businesses which means they struggle to

• gain enrolments

• manage a great team and

• focus on what's really important.

There is no point running training programs which don't make enough money to keep the doors open.
I understand there are swings and roundabouts regarding student intakes and these definitely need to be considered.

But if your business is made up more of 'but people want us to run these courses because we always have, regardless of what it costs us' than 'these programs make us money', then you will also be 'writing checks your ego can't cash'.
Please don't be distracted by the shiny plane which can sometimes be in the guise of funding, tenders, the verbal 'yes we'd like that' etc. 
Until they've signed on the dotted line and the money is in the bank, it doesn't mean a thing.

Just because you love the training or it seems like a good idea; if there aren't enough buyers out there with the capacity and desire to buy, then it will simply remain a good idea which may send you bankrupt.

And I'd hate to see that of any RTO who is guided by passionate individuals wanting to impart their knowledge to our current and future workforce and business owners.
Every RTO should have documented how much each training program costs to run, taking into accounts all the costs including:

Development time – TAS, training materials, assessment instruments, mapping

Trainer support time with each student

Venue – hire, catering and now Zoom

Delivery time

Assessment time – onsite, marking

Review of feedback

Improvement time – to update and change training and assessment materials
What's Next?
Work out the true costs of running each and every training program to ensure, not only that it should still actually be on scope (because if there is little or no demand, or it's throwing money into a blackhole, why are you running it?); but you are actually running a profitable RTO business and not an expensive hobby.

And here's my final thought:
Make sure you talk to your trainers to get a true idea of how long things really take to develop rather than using your 'guesstimate' figure which could be miles off the mark.

P.S. If you want some help to start running your RTO like the Tortoise instead of the Hare, then please check out my webinar Tortoise versus Hare: Who's Really Running Your Business?
Dedicated to helping you run a simple profitable RTO business (whilst juggling everything else)!

Author: Tamara Simon

Tamara Simon is Australia's Only Dedicated RTO Business Coach who's driven to making your RTO life easier.

For over twenty-five years, she's been helping RTO Owners, CEOs and Managers get out of OVERWHELM so they can

- Get back in control and on track

- Grow their business... simply

- Reignite their passion for training

Find out more about Tamara Simon and how to work with her, her signature RTO GROW Training Program,and how she can take your RTO from Overwhelmed to Optimised here:


Want to know the 5 Strategies Essential to Growing Your RTO Business?

SImply request a copy of my RTO $uccess Blueprint to find out.

Inside, you'll discover the 5 proven strategies to go from feeling BURNTOUT to BACK in CONTROL.

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