RTO Set Up Cost
A question that I am asked regularly is, what is the cost of setting up an RTO? It is a good question to consider early in your planning. It is one of those questions that is big and difficult to answer, hence the reason for this article.
Sometimes, I think potential clients asking me this question are just wanting a simple answer like “$80,000”. It is just not possible to actually answer the question accurately without giving consideration to many factors. This article will focus on those factors and give you the tools to identify the set up costs applicable to your planned RTO. There are many websites and articles on the internet about the costs associated with setting up a business generally and these should also be considered in your overall research and planning. We will focus on the costs associated with preparing and submitting the RTO application to the point where you have achieved registration and are listed on the national training register.
Considering the cost before you launch your RTO registration project is critical. I have seen clients launch into a project to start an RTO only to “put things on hold” latter when they realise the cost of the set up was more than they had expected.
I hope that the considerations raised in this article will help you to undertake proper planning in order to maximise your potential of success. Training the workforce is a rewarding business to operate. Good planning will ensure you reap those rewards both professionally and financially.
Planning and Research
Taking the time to think through and analyse all aspects of the proposed RTO is so critical before you jump straight in. Remember the 6P’s, Prior Planning Prevents Piss Poor Performance. The time you spend planning your new venture is a valuable investment. The more you know prior to actually committing funds, will increase your prospects of success exponentially. The fact that you are reading this article, is a good sign that you are planning and researching.
These are the top things that you need to plan and research:
- The training products
- The mode of training
- Consulting fees
- Accounting fees
- Your time
- Trainers and Assessors
- Facilities and equipment
- Student Management Systems
- Business establishment costs
- Application fees
The Training Products
A “Training Product” is the language used in the Standards for RTOs to describe the following:
- Units of competency
- Accredited courses
- Skill sets
The cost of your RTO will largely be influenced by the type of training you want to deliver. It makes sense. The cost of setting up a business course as an example is less that setting up to deliver campus based automotive mechanical training. The selection of the training products you want to deliver may largely be based on your passion and own area of competency. Whilst this is a good thing, it also needs to be informed by objective and in-depth market and feasibility analysis. Market and feasibility analysis will be the subject of a separate article. My point is, when selecting the courses that you want to deliver as an RTO, you need to consider the cost associated with training those skills. A basic cost fundamental in the training industry is, the cost of training cognitive (thinking) skills is less than training practical skills. I can train a person in risk analysis with a whiteboard. To train someone in carpentry will require a big enclosed space such as a warehouse or shed with lots of tools and materials. You get my point.
When selecting your training products, give consideration to the following:
- Undertake a detailed market analysis. What is the demand and potential for future growth of the occupation or work function that you are considering training? Are there differences in this potential between your local area or region compared to a state and national level? Where are the job vacancies? Who are the major employers? Are there any licencing requirements? Who is the target learner and what is their typical stage of life, availability, motivation, etc? At a minimum, get onto job outlook and do some research on the target occupation that you are considering training (Job Outlook).
- Identify the training products. You would be surprised how many people contact me about wanting to register an RTO and are not aware of the national training register nor do they know the training product they want to deliver. Seriously, if this describes you then I am so glad that you are taking the time to research. You need to be familiar with the national training register and undertake relevant searches to identify the actual training products that you are seeking to deliver. You can access the national training register at the following link (training.gov.au). The main piece of advice I would give you in searching the national training register is to exclude all training products that are non-current and remember, this is not a shopping trip! Every course that you pick will carry significant cost in order to bring it to delivery. It is wise to start small and increase your training offering over time. I can tell you after 15 years’ experience of registering RTO’s, those clients with a smaller and more manageable scope are typically more successful in the long run. The main point is, identify the specific training product that you want to deliver by its code and title.
- Undertake a competitor analysis. Who are the existing RTOs already servicing your intended market both at a local, regional, state and national level? Once you have identified your training products, you can identify the current RTOs delivering each training product by selecting the link on the training product record on the national training register. Just look for “Find RTOs approved to deliver this qualification”. As an example, the following link will provide you a list of the current RTOs delivering the qualification ICT40518 – Certificate IV in Programming (Click). Looking at the data on Job Outlook compared with the number of providers for this qualification, it is interesting that programming is an area of very strong growth and there are only 14 RTOs delivering the qualification. Some of these 14 providers might have it on scope but most likely don’t actually deliver the qualification. This is common. The only way to really find out is visit their website or call and ask. I would also look at the relevant qualification at the AQF level below and above this level to put together a list of the top competitors. By investigating the top 10 competitors, you can do a comparison of mode of delivery, course cost, payment schedule, funding or subsidy arrangements, delivery locations, extent of advertising, entry requirements, website quality, facilities and resources, target market, training schedule, et cetera. If you really want to be cheeky, you can contact these businesses and make an enquiry to determine their level of customer service and course structure. By appreciating your competitors, it will inform your decision about the training products to be delivered and to identify the opportunities in the current market.
- Availability of training material. I often say to clients that developing or acquiring and customising the training and assessment material is the elephant in the room in regard to the time and cost of registering the RTO. Very few clients either have the capacity or the expertise to develop course material. I have certainly supported clients through a development process and actually really enjoy teaching proper course design along the way, but this takes significant time. If we are talking about a unit of competency only course then, not so bad. If we are talking about a qualification with multiple units of competency, the development of the learning and assessment material for a course like this can take up to 12 months working on a part-time basis. I know that sounds like an outrageous amount of time, but seriously people generally think they have way more time that they actually do.
- It is much more common for a client to purchase course materials from a commercial supplier. Of course, we offer such products in our assessment packages (Click) and there are a myriad of other material suppliers based both in Australia and overseas. I will provide an article in the future about selecting commercial learning and assessment resources; however, the key things to consider are the availability, currency, license restrictions, compliance and cost. I should just say that it is extremely rare to find commercial resources that are fully compliant and ready to go. If you are buying commercial resources, you absolutely need to factor in time and cost to review and customise these resources to ensure they meet the requirements of training package and support your mode of delivery. Don’t complain about non-compliant resources after the audit outcome. I am telling you now, they are all non-compliant, so you just need to factor in the time and cost of customisation and conduct it as part of the process toward registration. Note. That last sentence is seriously the single most important piece of advice in this article.
- Getting resources from a friend who works in a current RTO or planning to re-badge the material from the RTO you work with? Ok, if that describes you, that is copyright and intellectual property theft. It is wrong and an infringement of other peoples rights so forget that as an option. Also, don’t assume that just because you can get the materials from a current RTO that they are compliant. Seriously, I can say with about 95% certainty that they are not compliant. “But, the RTO just passed audit”, it doesn’t matter, the likelihood that the auditor actually sampled that unit or qualification and the risk that the auditor was a lightweight are factors to consider. Get your assessments audited by an assessment expert who has audit experience before you blindly rely on them being compliant. Also, if that person gives you advice about what changes to make, make those changes to the letter and then get them to check the final product.
Once you have completed your market analysis, identified the training products, conducted your competitor analysis and identified viable course materials, you can then settle on a final list of training products to move forward with in your planning. Keep an open mind as you move forward. As you progress through the process, you undoubtedly will learn new opportunities, but always make decisions based on good analysis.
The mode of delivery
The mode of delivery clearly has a significant impact on the expected setup costs. There are four main modes of delivery to consider. These are:
- Classroom delivery. Classroom delivery includes really anything that is campus-based or delivered at the RTO premises. This takes into account not only delivery in an actual classroom but also workshop delivery and practical training at the RTO. It really encompasses anything where the learner actually attends the RTO premises or training venue. The costs associated with classroom delivery are fairly obvious including facilities, equipment, staffing, et cetera. If your training involves lots of practical skills, classroom delivery is often the best choice particularly where you can schedule cohorts or groups of students at the same time in order to achieve an efficiency in the learner to trainer ratio. The biggest cost in most businesses is the wages of employees such as trainers. Whilst it is attractive to outsource the equipment and resources to a workplace delivery model, this often results in training being delivered one-on-one and is less efficient than training being delivered by one trainer to 15 students at the same time. Just something to consider.
- Online delivery. Online delivery includes virtually anything that is digitally or remotely delivered. This includes traditional web-based learning activities delivered via a learning management software, video conferencing, teleconferencing, email, virtual classrooms, web-based chat rooms, distance learning, et cetera. Clients often see online delivery as a way of reducing the delivery cost and particularly their development cost. This can be the case but is often not. People often underestimate the cost of designing and developing online learning particularly if the client is after a specialist area of delivery and is looking for a particular quality outcome. There is the cost of the learning management system, content authoring software, the online learning developer, a web programmer, content purchasing, web hosting, website design and development, et cetera. Many of these costs are ongoing and not simply experienced during the development or start-up. You will need to have all of the learning developed fully before you apply.
- Workplace delivery. Workplace delivery is often the saviour of the small private provider. Workplace delivery model assumes that the RTO has trainers and equipment that is portable. The trainer attends the client’s workplace and delivers training on-site. This is often suitable for unit of competency only training such as first aid or confined space training but is also quite suitable for traineeship and apprenticeship training where the trainer attends the workplace and delivers training on the job one-on-one with the trainee or apprentice instead of the trainee or apprentice attending the RTO premises. As indicated earlier, this can often be quite expensive in terms of wages but it can reduce the cost to the RTO in terms of supplying all of the equipment and facilities to enable the training to occur. I have seen many models like this over the years and there are both advantages and disadvantages. The employer may see this as an advantage because the training is often delivered in the context of their own workplace, it can foster a positive workplace learning environment and it reduces the need for employees to leave the workplace therefore reducing the loss of productivity. The employer may also recognise the disadvantages of disruption to the workplace operation due to training occurring and tying up space or equipment to deliver training, et cetera.
- Blended delivery. The blended delivery model is overwhelmingly the most common model that we see today in the modern, small to medium size RTO. This is where we have a combination of the modes of delivery identified above. As an example, let’s say I am delivering a course in Aged Care. The course is delivered over 24 weeks which is equal to 6 months. The learner attends the RTO for classroom-based training for the first 12 weeks (term 1) four days per week. Parallel to this classroom training, the learner is also exposed to some online learning to engage in the course content and to complete self-paced assignment activities. The learner also participates in some practical training in a basic simulated training environment at the RTO premises. In the second 12 week block (term 2), the learner now attends the RTO only two days per week but is also required to attend work placement two days per week over the 12 weeks. The trainer will attend the workplace and undertake observation assessment of the learner performing tasks on the job. All along, the learner is continuing to engage in online learning and completing written assignments and submitting workplace portfolio evidence online. This blended mode of delivery involves all of the modes identified above. It is actually quite rare now to see courses which are delivered using only one mode of delivery. The blended mode of delivery is the new normal.
You can see, from the information provided above that coming up with the mode of delivery and identifying the particular costs of developing all of the arrangements and materials in support of that mode of delivery will have a direct impact on the cost of setting up the RTO. The cheapest way to deliver training is often classroom delivery using short term room hire with groups of students teaching cognitive skills such as business and administrative skills. Using strategies such as ‘bring your own device’ can further reduce the costs of providing suitable IT facilities to support learning delivery. Imagine delivering a part time Diploma of Business completely remote using a combination of online learning and timetabled virtual classroom sessions on Zoom. All of these options need to be considered in the cost before you launch yourself into the RTO registration process.
The first thing I would say about consulting fees is, don’t try and do this yourself without any advice. I don’t care if you use our services or you find another consultant that you are happy with, get yourself some advice. Registering an RTO is complex. At least on a weekly basis I receive an enquiry via the website or a phone call from a prospective client who has had their application rejected by the national regulator. It is amazing to me that in many cases, the prospective client has not utilised a consultant and has prepared and submitted the application themselves. The thing about the application process these days is this, the application and application evidence needs to be spot on. I wrote an article a while back on the application evidence requirements, which is worth reading (Click). The regulator will determine your application based on the initial evidence you provide so everything needs to be right in the application evidence. There are no opportunities to submit new or additional evidence prior to the application outcome being decided.
Now, what can you expect to pay in regard to consulting fees? You absolutely need to get at least three quotes. Ask around the industry for recommendations about consultants who have a proven track record. One of the things that you will find very quickly is that Newbery Consulting is the only company in Australia that advertises our costs online. We have a fixed and published costs to register your domestic RTO for $11,000.00 with the initial payment being $7,700 and then $3,300 when you are listed on training.gov.au (Click). No other consulting company in Australia will tell you publicly how much they charge to register an RTO. It is not uncommon for a client who approaches me to assist them to fix an application to hear they have paid their previous consultant up to $30,000 or $40,000. Seriously, I am not joking! Some consulting businesses will present you with a standard package (fixed cost) and some will quote you on daily rate (cost plus). From our market analysis, we know that the average quoted consulting fee is about $25,000. I know, that is a ridiculous amount of money to pay and particularly when the application fails. The consulting fee will depend largely on how much support you need. If you want the consultant to do it all, it will cost a lot. If you are doing the groundwork yourself and are simply getting advice from the consultant, you can expect it to cost less.
What we offer. Our RTO registration service (Click) is $7,700.00 for a domestic registration. For that cost we supply the client with their complete RTO policies and procedures, all of the necessary forms and administrative tools you need to administer training and learners, the initial subscription to RTO data which is our very popular AVETMISS student management software, a detailed project plan with all of the actions necessary to submit the application, the application structure development in Dropbox and finally, two days of consulting support. We get most clients application submitted within this two days but if the client needs additional day they can purchase this at RTO support (Click). Now, this is a fairly comprehensive combination of both products and consulting support with the structure to get the application submitted. When you compare available consulting services you need to consider both the cost of the products they offer and the services they provide. You certainly should not be paying any more than $10,000 for your consulting support.
One of the costs that is not often considered by clients in registering their RTO is the cost of the accountant to undertake the financial viability risk assessment. I often point out to clients that they will need to identify an appropriate accountant who can undertake financial viability risk assessment. The default response from most enquirers is “oh, financial viability won’t be a problem”. This sort of assumption is based on their own assumption about their personal financial situation and generally does not take into account the financial position of the business which are two very different things. I won’t dive too deeply into financial viability but suffice to say that it is a lot more complicated than most people consider. You can see a snapshot of the evidence to support financial viability at the following page (Click). When the client initially goes to their everyday accountant to ask if they can complete this financial viability assessment, the vast majority of accountants confirm that they can and “just come and see me when you are ready”.
I have observed over a period of about 10 years since financial viability became a requirement that the vast majority of accountants when required to actually undertake the financial viability risk assessment then decide that they are not able to do so. Various reasons will be provided such as, I don’t have the required qualifications, my professional indemnity insurance does not cover me for that sort of activity, I have never undertaken such a risk assessment previously, I have no training in financial viability risk assessment, I simply don’t feel confident in signing such a declaration, et cetera. So, this is the first trick in getting your financial viability risk assessment completed, is finding an accountant that is both qualified and fully informed to complete the assessment.
The next thing to consider is the cost. I have seen accountants charging anywhere from $1,200 – $12,000. There was actually a business at one point (not sure if they still exist) that were advertising RTO financial viability risk assessment for as little as $600. From my perspective, this is far too cheap and it raises questions in my mind about their actual understanding of the requirement or their competency to complete a proper financial viability risk assessment. On the other end of the scale, there are accounting companies particularly based in the CBD of Sydney and Melbourne charging in the order of $7,000 – $12,000. In my view, this is just an outrageous cost. Do yourself a favour and avoid any accounting firm who is quoting you this type of fee.
Of course, it does depend on what you are asking the accountant to do. If you are expecting the accountant to prepare the entire business plan, financial plan and all of the associated evidence then of course this will cost more. I would strongly recommend that you do your best to prepare a detailed business plan and financial forecast before you go and speak to the accountant. There are some good tools and guides on developing a business plan at the following site (Click). It is really important that your forecast of student numbers, delivery model, equipment costs, wgaes, et cetera, aligns with other documents in your application. For instance, if you forecast 200 students out of one location and you only have enough trainers and training rooms to support 120 students, then there is obviously a problem with your financial forecasts and therefore your financial viability. Increasingly, the national regulator is going to this level of detail to confirm the suitability of the RTO in comparing the financial forecast to the actual capacity of the organisation. There is so much complexity in the financial viability risk assessment and in the supporting evidence. You need to make sure your accountant knows what they are doing.
We have recommended various accountants over the years. I prefer that the client is using an accountant who specialises in RTO financial viability risk assessment as this can be significantly more efficient in terms of time and cost. The two accounting firms that we would recommend you talk to and obtain a quote from are the following:
- Janeen and Peter Andersen @ Your RTO Accounting Specialist – Website and
- David Jepsen @ RTO Accountants – Website
It is often the case that we don’t account for our own time when setting up a business. One of the questions I often ask prospective clients is “Are you planning to do the work yourself or do you have other people to assist you?” or “How much time do you have available to commit to preparing the evidence?”. Of course, the amount of time you need will depend greatly on many of the things that we have presented in this article in terms of your delivery plan, access to good advice and availability of suitable learning and assessment resources.
I would suggest that if you are going to register an RTO and you are currently working full-time then you need to identify a minimum of 5 to 10 hours per week to dedicate to the RTO project and to preparing the application evidence. This may either be your time or the time of the person that you engage for this particular purpose. Either way, there is a cost of time. Most RTO registration projects that stall can be attributed specifically to the client underestimating the amount of time required or overestimating their availability to progress the actions. If you are going to commence an RTO registration project, you need to find a minimum of 10 hours a week. This might be two hours each evening Sunday to Thursday or 10 hours over the weekend. Obviously, how you cost that is completely up to you but if you do not allocate this type of commitment then your RTO application will not progress. Remember that, time is money!
Trainers and Assessors
If you are launching the small business as an RTO then it is likely that you are planning to deliver some of the training and assessment yourself or you will be relying on contract trainers. Unless the client is an existing business with current employees, it is very rare for a client seeking to register an RTO to have trainers and assessors already under their employ. If you are in this category, then you already know the cost of employment. For everyone else, I will focus on engaging contractors in support of your application.
A large portion of the training industry relies on contractors who provide training and assessment services in their individual area of competency. It is not uncommon for trainers to be working on behalf of multiple RTOs at the same time. These contract trainers are typically working as a sole trader with an ABN and depending on their annual turnover (i.e. over $75,000), may or may not be charging GST. The typical daily rate for a contract trainer will vary between $400 – $600 (excl). The vast majority are at the $400 per day level with only those with specific or unique capabilities attracting a higher daily rate. A client recently told me that he is struggling to find good trainers in training and assessment (TAE40116) and is paying $800 per day.
A typical strategy for an RTO seeking registration is to undertake a recruitment process looking to provisionally appoint trainers pending the successful outcome of the application. This means that you would undertake your normal advertising and recruitment process making it clear that you are seeking a contract trainer to engage once the RTO has achieved registration. An advertisement posted via the normal channels will typically attract lots of attention so be sure to be very specific about the types of skills and minimum qualification requirements in order to attract attention from only those who are suitable. Once you have identified a potential trainer, it is a good idea to enter into a contract agreement which involves only engaging the contractor on an as required basis. This is the typical way that most of these contractors work so it is a very normal arrangement for them.
Of course, to prepare the application evidence, you will need support from the trainer to establish application evidence such as certified qualifications, the detailed CV, evidence of current vocational experience, evidence of ongoing professional development, the development of the trainer matrix, et cetera. I often say to clients that it is a good practice to engage the contract trainer a couple of days work to focus on the development of this evidence. This is a demonstration of good faith and often results in better quality application evidence. It is also advisable that you require the trainer to engage in some relevant professional development particularly in relation to competency-based training and assessment.
In terms of the overall cost per trainer, it is reasonable to allocate approximately $1500 per trainer prior to the application. This cost accounts for their time to assist in the preparation of evidence and some just in time professional development. This will usually result in high quality evidence and the sound basis for a commercial relationship with the trainer moving forward once the RTO is registered.
Facilities and Equipment
It’s not really possible for me to provide you a cost estimate for your facilities and equipment. One of the most common questions I get asked is, “Do I need to have a lease on a permanent training facility”. The answer to this question is definitely, no you don’t. The national regulator recently posted a general direction about the resource requirements for applicants seeking initial registration (Click), and identifies the following types of access arrangements as suitable for the submission of an application:
- purchased premises, or
- a current lease, or
- a written agreement to rent a site pending registration, or
- plans by the applicant to hire premises as required, and as appropriate to the training product and strategies for training and assessment.
Depending on the type of training that you intend to deliver, it may be appropriate for your RTO to operate as a home-based business utilising facilities hired on a daily basis. Of course, there are many options to defer or outsource costs particularly in relation to facilities and equipment. As an example, you may not have the funds to buy a forklift to deliver your forklift course, but you can hire a forklift suitable for training on a monthly basis for as little as $290 per week. You may not be able to afford a long-term lease for that inner CBD location you want, but you can hire a classroom in the CBD fully equipped with AV for as little as $300 per day.
As a general strategy to establishing the business, I would recommend that you minimise any long-term (locked-in) financial obligations or asset purchases and focus on utilising premises on an as required basis and accessing major equipment items via a short-term lease or hire basis. Of course, this will result in marginally higher operating costs but it does give you the flexibility and peace of mind in regard to your overall liability. If you find that the training venue you have identified is not working, then you can simply move to a different training venue. It is certainly a desirable situation that if you have no training booked then you are not paying for any facility or asset that is not returning a revenue. Of course, we don’t expect this to happen, but it is important in business that you plan for all contingencies.
I should just point out that adopting a strategy as outlined above will result in higher operating costs therefore drawing down on your available asset and impacting your current ratio in regard to financial viability. There may be an argument to purchase certain equipment items utilising the government’s instant tax write-off; therefore, providing the business asset and correspondingly supporting its financial viability. You obviously need to seek advice from a qualified accountant in this regard.
The key consideration in relation to facilities and equipment is that they need to align with your proposed training product and mode of delivery. If you are proposing to deliver training in Aged Care as an example, and you have not established a suitable simulated workplace to undertake simulated training and assessment, then your application will fail. You need to undertake this level of analysis in the training package compared with your proposed delivery model to identify the necessary equipment that needs to be put in place in support of the application.
Student Management Systems
When you submit your application, you must provide evidence that you have established arrangements to utilise an AVETMISS compliant student management system to issue your outcomes and report your activity in accordance with the national VET data policy.
There are many choices when it comes to student management system. Of course, we have been supplying the VET sector AVETMISS compliant student management software for over 10 years and in the past two years have redeveloped this software as an online cloud based software as a service (RTO Data Cloud). Obviously, I am absolutely bias in regard to the incredible functionality and affordable cost of our software and totally recommend that you contact us for a free trial. We include the initial subscription costs for RTO data within our RTO registration service fee (Click). We also provide the client with free use of this system for a period of six months from the date the services commenced or until the RTO achieves registration, whichever comes first. Ask one of our competitors if they are willing to provide a six month free usage period whilst you are preparing the RTO application and see what they say. The ongoing usage charges are outlined on the above page but essentially this is $100 per month for the first user and two dollars per day for each additional user. This is an awesome software platform particularly built for RTOs and when you compare the cost, I am fairly confident that you will conclude that this cost is also awesome. As an example, if you had two users on the system full-time your annual costs would be approximately $1,930.00. If you only have one user full-time, your annual costs would be $1,200.00. We don’t charge additional fees for training or support or linking the software with your website via an API, as an example.
Now, you need to do your own research, but you will find in this space of cloud-based student management services there are only about six major players of which we are one. It is not unusual to find clients paying these other systems in the order of $15,000 per year. Do your research and compare capabilities and cost and also try and get some feedback about the support capabilities. I am confident on the basis of those three benchmarks, capability, cost and support that our system is the obvious choice. Get in contact today for a free trial. I am normally fairly reserved in pushing our own products and services but, seriously, this is a no-brainer. Give us a chance to demonstrate our systems capability.
In terms of the application, you will need to provide evidence that you have access to an AVETMISS compliant student management software. Unless the provider you go with is willing to provide you a six-month grace period like we do, probably hold off on that purchase until just before you submit the application. No use paying for a student management software that you are not getting any return on.
Obviously, if you are setting up a new business you will incur all of the normal costs associated with establishing a new business entity and getting in place necessary requirements in support of that. The business.gov.au website (Click) provides an excellent summary and costing template to help you plan for the start-up costs of the new business. The following points are a summary:
- Registrations, including registering for an ABN and Business name registration
- Licences and permits (such as local government approval of the delivery site)
- Domain names registration
- Intellectual Property (IP) rights protection, including Trademarks
- Vehicle registration
- Membership fees (such as industry associations)
- Solicitor fees
- Utility connections and bonds (Electricity, gas, water)
- Phone connection
- Internet connection
- Computer hardware / software
- Staff training
- Stationery and office supplies
- Marketing and advertising
- Website set up
The application fee relates to the fee that you pay to the national VET regulator when you apply and then again when they assess your application. You can access the current fees via the ASQA website (Click). The current cost for the initial application lodgement is $500.00. After they have confirmed that the application complete, you will then receive an invoice for the initial assessment fee which is $8,000.00. If your application is successful, your registration will be approved for an initial period of two years’. In addition to this, you also need to pay an annual registration charge which is based on the number of qualifications on your scope of registration. As an example, if you have between 0-4 qualifications then the annual registration fee is currently $1,130.00. Your initial annual registration fee is payable by 1 July each year and is worked out on a pro rata basis. Definitely check the national regulator’s website for the current fees. In terms of cost planning, you need to account for an application fee of $8,500.00.
Ok, I thought it would be helpful if I provided you with a couple of cost examples based on two different scenarios. Both of these scenarios are pitched as small businesses. The following assumptions are made within the two scenarios:
- The applicant is utilising our RTO Registration service.
- The application takes five months to prepare and submit.
It is so important to undertake proper planning and research prior to launching into any business. Delivering training as an RTO is both a worthwhile and noble undertaking and can be financially rewarding. The application process is complex and involves many costs only to enable the application to be submitted and assessed. The time frame between submitting the application and having it assessed by the regulator can also be quite extensive sometimes as long as six months. Your strategy to apply to become an RTO should involve the necessary expenditure of funds to prepare the application and minimum expenditure on the RTO whilst you are waiting for the application to be assessed. This revenue gap can often be a very difficult thing for some people to bridge.
I hope that this article has helped you in your planning to become an RTO. Please contact us if we can be of any assistance in providing our valuable products and services.
Published: 7th June 2019
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