Why most training providers don't know their true cost per course

What people usually count: direct costs

Most training providers are familiar with their main direct costs, including:

• Trainer or instructor fees, whether in-house or external

• Training materials such as manuals, digital content, licences and certification fees

• Venue or facility costs for face-to-face delivery, or platform costs for online training

• Travel and accommodation for trainers or delegates where required

• Equipment and consumables needed to deliver the session

These costs are visible, easy to invoice and straightforward to track. Because of that, they naturally become the foundation of how many courses are priced. The challenge is that they only represent part of the picture.

The hidden and indirect costs that often get ignored

Behind each course sits a layer of work that is rarely reflected in simple costing models. These are some of the most common areas that go uncounted:

Administrative time
Bookings, scheduling, coordinating trainers, managing rooms and equipment, sending joining instructions, handling payments, issuing certificates and managing compliance all take time. For many providers, admin time can equal or exceed delivery time, yet it is rarely costed properly.

Opportunity cost
Time spent on manual admin is time not spent on sales conversations, account management, improving the delegate experience or developing new courses. The business impact of this lost time is real, even if it never appears on a spreadsheet.

Resource inefficiency
Poor scheduling can leave trainers under-used, rooms half empty and equipment sitting idle. These inefficiencies still carry cost, even when there is no revenue attached to them.

Cancellations, changes and rework
Late cancellations, no-shows, rescheduled sessions and compliance failures all introduce extra work and extra cost. These issues often sit outside standard pricing calculations, yet they can significantly affect true profitability.

Impact of poor experience
Hidden cost also shows up through lower repeat bookings, negative word of mouth and increased complaints. Poor administrative experience often costs more in the long term than delivery issues ever do.

Why traditional pricing and financial assumptions aren't enough

There are several reasons training providers struggle to build accurate cost models:

It is simpler to total visible costs than to track time, effort and inefficiency across multiple teams. Many providers simply do not have the data to measure indirect cost accurately.

Delivery itself is variable. Delegate numbers fluctuate, sessions move, and last-minute changes are common. This makes it difficult to apply a consistent cost per course without structured systems.

There is also a natural tendency to focus on revenue and delivery quality first. Operations often get attention only when something goes wrong. Over time, this leads to gaps between perceived profitability and actual performance.

How to calculate a more accurate true cost per course

A practical way to improve cost visibility is to work through a simple but thorough process:

1. Map the full delivery journey
   List every step from first enquiry through to post-course follow-up and certification. Include all admin touchpoints, not just delivery.

2. Assign time and cost to each task
   Estimate how long each task takes and apply a realistic hourly rate for the staff involved. This should include salary and overhead, not just basic pay.

3. Add fixed and variable overheads
   Include software, systems, facilities, equipment maintenance, insurance and compliance activity. If detailed figures are not available, apply a standard overhead rate and refine it over time.

4. Account for inefficiency and risk
   Build in allowance for cancellations, changes, downtime and rework. These costs are part of normal operations and should be reflected in pricing models.

5. Calculate cost per meaningful unit
   This may be per course run, per delegate or per qualification issued. The important thing is consistency.

6. Review the model regularly
   Staff costs, venue rates, software and admin effort change over time. Treat costing as a living model rather than a one-off exercise.

What this means for pricing, profitability and growth

Once training providers understand their full cost base, several things tend to change quickly:

• Pricing becomes more confident and defensible because it is rooted in reality rather than assumption.
• Margins become more predictable, which supports better forecasting and planning.
• Inefficiencies become visible. When time and effort are measured, problem areas tend to reveal themselves quickly.
• Growth becomes more controlled. Rather than adding volume and chaos at the same time, providers can scale with clearer understanding of capacity and cost.

How a TMS can help with hidden costs

Technology plays a key role in shifting hidden cost into visible data. A well-implemented training management system reduces manual scheduling and duplicate data entry, automates routine tasks such as communications, payments and certification, and improves visibility across trainer utilisation, room usage and delegate attendance.

It also provides reporting that highlights bottlenecks, rework and inefficiencies. When time, resources and workflow are visible in one place, cost stops being an estimate and becomes something that can be managed.

Conclusion

The true cost of delivering a course extends far beyond trainer fees and venue hire. Admin effort, inefficiency, downtime, rework and overhead all contribute to the real cost base, yet they are often overlooked.

If you cannot confidently describe your full cost per course, it is worth stepping back and reviewing how that figure is calculated. Mapping the full process, assigning realistic costs and reviewing the model regularly can reveal where margin is really being made and where it is quietly lost.

Clear cost visibility enables better decisions, stronger operations and more sustainable growth.