How to calculate the cost of implementing an LMS
You must create a realistic budget before obtaining funds for your new training business LMS. The accounting team will probably not log out until they know how much it will cost and how it will benefit their results. The tricky part is looking for those hidden fees that could put you in the red and finding a Learning Management System that gives you the best value for money and minimizes maintenance costs. These 7 tips can help you calculate an accurate LMS implementation budget that is easy to meet because it includes all essential expenses.
1. Research popular pricing models
Is a single license fee better for your organization? Or should you choose monthly subscription fees to avoid high startup fees, even if that means paying more in the long run? The pricing model is the basis of your LMS for the budget of training companies. It tells you how much you must pay up front versus monthly so you can plan accordingly. Free options are another consideration, but be aware of customization and maintenance costs. Free can end up costing you more than paid LMS options when all is said and done.
2. Factor in startup fees
I briefly mentioned the startup fees, but they guarantee their own section as there are many factors at stake. It's not just about buying the eLearning tool and investing in equipment like PCs or tablets for online training. You should also consider the time it takes to get past the LMS learning curve and hosting fees. Do you need plugins or updates from the beginning to maximize functionality? Are there support services you should buy to ease the transition of your team? All of these belong to your LMS implementation budget. Another element to add to the expense sheet is unexpected delays in implementation. A minor pullback could delay your launch and deepen your budget.
3. Determine the best pricing structure for your online training course sales
There are two key reasons why you need to establish your pricing structure before choosing your new LMS. The first is that you know how much you enter. You can estimate your earnings to invest in an LMS that expands your margins. For example, you want to sell subscriptions to your online training course catalog. You may not have enough space in your budget to buy an LMS directly. However, a subscription-based LMS is more feasible, as it will have a trickle of sales every month. The second reason is that you can find an LMS that fits your pricing structure. Some allow you to sell multiple seats, while others are restricted to individual access to online training courses.
4. Calculate Online Training Content Creation
Unfortunately, you cannot invest in an LMS today and launch an online training course tomorrow. The learning management system is the framework, but you still need memorable online training content to deliver to paying customers. How much will it cost to develop online training resources? Does the eLearning authoring tool have built-in eLearning templates to simplify the process? What about multimedia resources? Or will you have to invest in a third-party eLearning authoring tool to create online training courses?
5. Calculate the true cost of your internal equipment
Instructional vendors, managers, and designers are just a few of the people you need on the team. And they probably won't work for free. As such, you should calculate the cost of hiring these key people to develop, implement, and sell your product. Do you need to hire an IT expert to configure the LMS? How about a support team to answer questions / calls from paid clients or students? Will they be given a salary or will they be taken as consultants? Need to account for payroll and a benefits package?
6. Estimate your marketing costs
Marketing costs are not directly related to your purchase of LMS. However, you must promote your virtual product for the learning management system to pay off. You don't want to spend all that money implementing your LMS so that the online training course collects dust. How much does it cost to launch an online marketing campaign? How long will it take and which marketers do you need to have on board?
7. Maintenance account
An online training course does not run on its own. Sure, online students can pay for the online training course and automatically access the content of the online training with minimal participation from the online instructor / facilitator. However, you should still keep the training course online and keep it updated. For example, develop connection modules to generate additional income. Or modify the current compliance course to incorporate new regulations. Even monitoring LMS reports to identify gaps requires resources. Resources that come directly from your LMS for the training companies budget. Another cost to think about is product updates and integrations. The eLearning tool may be enough today, but what will happen in a year when you need to add more users?
If you are getting dizzy from all the costs that come up, remember that the right LMS can be a money machine. You just need a steady stream of quality online training content, a good marketing strategy, and regular maintenance to keep cash flow. That and a trustworthy team of vendors, managers, and in-house experts. You should also reevaluate your LMS budget periodically to ensure it remains realistic based on your changing needs. Business success may compel you to upgrade your LMS package or purchase additional integrations. In this way, you can keep up with increasing demand and rocket sales instead of limiting your potential.
Finding the ideal LMS for your organization is a must when you need to employ an effective online training strategy with maximum ROI. Building Your Brand eLearning 101 eBook: Tips for Choosing and Implementing an LMS for Training Firms that Exceeds Your Expectations will help you discover everything you need to know when opting for an LMS for Training Firms to achieve your business goals .