Establishing and operating a Registered Training Organisation (RTO) can be a great pathway to a fulfilling business career. From delivering recognised qualifications that support students in achieving their professional goals to working with trainers and assessors passionate about teaching, RTO owners have the potential to build a highly successful business while supporting others with broadening their career goals.
Before you get started however, there are many things to consider and various regulatory considerations to understand. This quick guide takes you through the major considerations in setting up an RTO.
Deciding to set up an RTO
Setting up an RTO is a major undertaking that can involve many thousands of dollars and hours and hours of your hard work and effort. If you are in the pre-planning stage where you’re weighing up whether an RTO is the right business for you, it’s the right time to research the industry in detail and find out all you can about running an RTO.
You will need to have a solid business concept that you can turn into a detailed business plan as part of your application. You will need to think about your target market and the industries you will be serving, along with how to engage and attract students. Staff, training and assessment quality, capital, and facilities and equipment are some of the other issues you will need to think about.
Providing nationally recognised training
- Deliver nationally recognised qualifications and courses – RTOs can deliver qualifications ranging from Certificate I to Graduate Certificate level from the Australian Qualifications Framework as well as nationally recognised short courses.
- Provide training for licensed industries – Being registered gives your business immediate credibility and allows you to provide courses that might allow qualification holders to eventually work as a licensed professional such as a plumber or electrician.
- Access funding – RTOs may be eligible to apply for government funding to provide vocational education and training to eligible individuals.
- Provide workplace training – RTOs can provide workplace training according to traineeship and/or apprenticeship requirements for certain qualifications.
The RTO regulatory framework requires certain responsibilities of executive officers in RTOs. CEOs and other executives need to ensure compliance under the Standards, including the provision of accurate marketing and advertising information (Standard 4) and quality assurance (Standard 2).
While no two businesses are the same, it’s possible to generalise about some of the key success factors that will be likely to impact your RTO’s performance. In addition to maintaining registration requirements and access to government funding for courses, these can guide your business plan and strategy, and maximise your chances of success.
- Industry demand – Do your courses address current industry demand?
- Staff quality – Are your training and assessment staff suitably qualified, vocationally competent and do they have current knowledge and skills about the courses they deliver?
- Accessibility – Will your courses be delivered in a way that matches the market’s needs (e.g., distance education, flexible delivery, workplace based, or other delivery options)?
- Information accessibility – Will you make it a priority to provide prospective students with enough information about the course and their career options before enrolment?
- Compliance – will you be able to run your business compliantly to ensure you can keep your registration as an RTO while also meeting the above needs? This means delivering courses that have a sufficient amount of training, assessing your students properly, and maintaining records and policies and procedures that comply with the Standards.
Preparing an application for registration
The RTO application process is a fairly lengthy process that will end with an audit by the registering body. You will need to prepare all the documents required to demonstrate that you meet the requirements for registration under the Vocational Education and Training (VET) Quality Framework. You will need to provide policies and procedures, training and assessment materials, business and financial plans, marketing materials, and evidence of you and any other senior officers or managers being a fit and proper person, as well as financial viability documents.
You will need to get everything ready to run as an RTO as part of your application process:
- Qualifications, training and assessment resources, and trainers – The qualifications and courses that your RTO will provide, the training and assessment materials you will use, and the trainers and assessors on your team, and how these meet the registration criteria.
- Facilities and equipment – The facilities and equipment that you need to train and assess your courses will need to be sourced and available.
- CEO requirements – How the CEO can meet the statutory requirements for their role as the head of an RTO.
- Course delivery – Will your RTO be using face-to-face delivery, online delivery, workplace delivery, or a combination of different delivery modes? How long will your courses go for and how have you consulted with industry in the design and development of your courses?
- Fees – What is the fee structure for your courses?
- Marketing – The marketing materials you will use that ensure sufficient and ethical information is provided to students prior to enrolment.
- Quality control – What systems and procedures do you have in place for quality control?
Undergoing the audit
The audit is typically a one to three day onsite audit, and the auditor will be seeking to determine whether or not you are fully prepared to act as an RTO once you receive your registration. They will review everything from your facilities and training and assessment materials to your quality systems and staffing. If there are any instances of non-compliance, you will be given time after the audit to correct these. Once you have proven to the registering body that you meet the required standards, your organisation will be approved for registration and you can start operating your RTO.
Start-up and ongoing costs*
One of the foremost issues for those planning to set up an RTO is cost. Setting up your RTO could cost you less or more depending on the size of your student body and other factors.
- Student management system – $1,000 – $7,000 per year approximately
- Financial management system – $1,000 – $5,000
- Learning management system – $1,000+ per year – only needed if you are planning to deliver online courses
- Training and assessment materials – $25 – $50 per student, per unit, per course, or $3,000 – $25,000 for a licence for a course
- Lease payments for facilities – Varies depending on location and size of premises
- Materials and equipment – Can vary depending on the course or training package
- Registration application fees – Starts at $8,800 for the base fee and lodgement, plus extra for additional qualifications, units of competency, and delivery site. Capped at $50,000
- Annual registration fee – Starts at $1,130
- Public liability insurance – Starts at around $1,000
- Website development – $2,500 – $5,000
- Accounting fees – $3,000+
- Other IT expenses – These include software and security tools, and they can vary depending on your RTO’s needs
- Recruitment fees – $5,000 to $35,000. This is optional depending on whether you’re using a recruitment company to source staff
- Legal fees – Another optional cost that might be required if you have specific company structuring requirements or need other legal help
- Consulting fees – $5,000 to $35,000, which can cover everything from attending registration audit, policy development, procedures, forms, course information, and training and assessment strategies.
*The above are indicative costs only and may vary significantly.
The benefits of becoming an RTO can far outweigh the costs, but we understand why you may be hesitant to take this step. Contact our expert team today to find out more about how we can help you register your RTO – you can reach us on 1300 676 870 or visit our website now.