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What is the status of the computer training market?

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Hello,

I am considering opening a computer training facility by the way of a franchise. I have taken a number of steps to test the validity of the business concept and the quality of the courseware. Where I am falling down is in getting hold of market research as to the demand for these types of services in my area. Does anybody know where I can get hold of some inexpensive market research for my business plan?

The business will specialise in user / super user / quasi technical training on MS Office, Lotus, Macromedia, and Sage Accounting packages etc as well as offering ECDL.

Any help very welcome. I am based in Bristol.

Michael Smee

6 Responses

  1. Planning
    Market research of where your clients are going to come from is key to your success. It is not a good idea just to view it as a necessary evil to complete a business plan. You need to know who is out there to buy your services before you pay out for a franchise.

    We advise start ups and can recommend good Bristol market intelligence once you have decided who you want to sell to and your target market. The company we use then makes a number of calls on your behalf to ascertain the market need and the existing provision for this sort of service and then reports back to you. A service like might involve 150 calls and intelligence on 95 of those called to assist you.

    The importance of all this is that you know what percentage of your intended market is likely to buy your service and who your competitors are. We often are called in after the client has paid for the franchise and is running out of work faster than they are able to generate it so be very careful in investigating the risk before you start.

    Lime One Ltd
    http://www.limeone.com
    0870 240 4325

  2. What is the status of the computer training market?
    Short and simple is the answer.

    Lotus is in minority market depending on which version you intend to teach.
    The ECDL is a glutted market as is Sage and Macromedia, enter at your own peril.
    Also, what is quasi technical training?
    The straight answer is that by simply searching the Internet you will find out what the competition is offering. This will give you a better idea about what you are getting into. Guess what? If your web site is not up-to-it you will have to spend k’s on marketing.

    The Solution: Look around and ensure that you can use the software (CBT or on-line or clasroom)and ask yourself will I be able to study using what I am selling. The other side of the equation is to look at the competition and ask if you can compete. If you can then go for it, if you cannot then do not waste your money. There are 12,000 plus private training firms in this country never mind the schools, colleges etc.

  3. The ‘cake’ isn’t big, and your slice (if you are going ahead wit
    Hello Michael

    Good advice from Keith Duncan. I have been in IT training for a number of years. I have provided IT training for large, medium and small organisations for end-to-expert users (ECDL; City & Guilds; MOUS and now rebranded MOS; Advanced ECDL), customised and technical training, roll-out projects, etc. and gauging by my own experience, admittedly it may not be representative, the IT training market is declining.

    I am on a long-term three-day a week contract currently (it is good, or should I say very good indeed, as long as the work continues, and it is not terminated early or it doesn’t suffer from sudden death – I have been involved in some IT projects which suffered early death), and I pick up other small IT consultancy work and/or web job to keep myself busy the remainder of the week.

    I have been receiving contradictory messages since the beginning of the year. Some of my associates and contacts claim the IT training market is picking up while others are crying out loud for works (any work! Yes, any work, literary). Incidentally, does anyone else, who is in IT training, receive these confusing messages?

    Like Keith’s said the market is flooded with too many training companies and IT freelancers plus schools, colleges, further & higher education establishments. For your information, the ‘cake’ isn’t big, and your slice, if you are going ahead with this franchise, is going to be even smaller.

    However, I wish you well and plenty of luck with your new venture.

    Robert Anggono

  4. Oh Dear!
    Michael,

    you could not be picking a worse time!

    Look at the key IT training suppliers and websites and then look at information released by the vendors. Most IT training companies are seeing revenues drop by 30%-40% on last year and absolutely no sign of it picking up. Example: QA training just announced £63m losses on £32m turnover (admittedly some exceptional losses as they revalue their business but £8m operating loss nonetheless and training revenues down 38% in 2002 compared to 2003. Example: Spring IT training making a loss IRO £2m on a turnover of £20m (down 25% on prior year). Example: Global Knowledge making a loss since its launch in 1988 on revenues of around £9m, down over 30% on prior year. Example: 3 out of the UK’s top 5 IT training companies are openly up for sale. Example: Microsoft, Cisco, Citrix & other certified course materials vendors reporting drops in the number of course kits shipped in the region of 30% – 40% in the last 12 months.

    My advice is DO YOUR HOMEWORK. Look to the industry analysts, look at the IT Skills Research Group, look at news in IT Training Magazine.

    If you still choose to go ahead, a few simple rules can help protect your future:

    1. Keep overhead costs to ZERO. Don’t employ trainers or support staff – instead, use a network of associates so that you only pay for people when you use them.

    2. Don’t launch a public programme. This requires investment in premises so instead, keep your overheads to a minimum by only running in-company events or by partnering with a non-technical training provider to share facilities and make sure you don’t incur costs for anything you don’t use.

    3. Avoid certified materials. These are expensive (comparatively) and are a commoddity product. Instead, develop your own unique and added value training proposition. Don’t build a whole portfolio in one go, instead focus on the cash cow topic areas and build the rest as you need it.

    4. Budget for 4-6 months with no revenue. Fund the whole thing from your own savings and don’t get into hock with a bank or investment company.

    5. Focus on staying cash flow positive. Don’t stretch your investments beyond your own resource limits.

    For more in-depth infrmation, give me a call.

    Good luck!!!

    Gary

  5. Thank You
    I just want to say thank you all very much for your help recently regarding my proposed IT training venture. The feedback that you have all provided together with the market research recommended, and my own “word on the street” research, have resulted in me qualifying this business out as being too risky in the current climate. I am now exploring other options.

    As my initial investment would have been somewhere in the high five figures, it looks as if this could have turned out to be an expensive mistake.

    Many thanks again

    Mike Smee

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