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Management

Establish a training budget

By Taskmaster
Thursday, 01 March 2012

Taskmaster

This article first appeared August 18, 2011.

 

There are two things businesses always say they love – their people and innovation. But here’s a challenge: Look at your budgets for the next year and tell me where this “love” is highlighted.

 

If you are serious about innovation and training, both should have separate budget lines. That is, you should be able to tell me exactly how you much you plan to spend on research and development and training this year.

 

Can’t do it? This money is hidden in other lines? Well, your passion is a bit weak, isn’t it?

 

Establishing a separate training budget is a great idea for a number of reasons:

  • It actually forces you to think about regular training for your staff and for yourself.
  • It shows to everyone in the company how serious you are about training.
  • It’s a great talking point in reviews. Offering staff training is a great incentive.
  • It’s a great talking point in recruitment.

The training budget doesn’t have to be big, but it does need its own place in your overall budget.

 

Get it done – today!

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Comments (2)

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nwsmith01
There are so many pluses for maintaining a training budget no matter what your size. In my experience (I'm a business trainer and small business owner) very few micro/small business start-ups and operators commit to training. The rationale I commonly hear is that there just isn't enough money. It's a fact that for most small business operators, the only resource they think they have control over is their time (that's another story). Money is always in short supply. But I always say... "there is always more than one way to skin a cat" (sorry to all you cat lovers).

In my opinion, it doesn't matter what size your business is, which stage your business development is at or how much cash flow (ergo profit) your business is generating, there is always some way or someone to help you out with the skills and knowledge you need to get your business humming.

Take a step back for a moment and look at the broader business community and you will soon see that those people running highly successful businesses and companies have relevant qualifications in areas of their expertise as well as business finances, management and marketing etc. At the other end of the spectrum are those that didn't realise they wanted to get into business and are approaching their entrepreneurship from the bottom up. Get their business going (the hard way) and learn on the way, often a difficult journey.

The barrier many small business owners need to break through is from 'unconscious ignorance' to 'conscious ignorance'. That is, discovering what it is they don't really know about running a business but should.

Here are a few tips for those of you going solo, just starting out, testing the waters, trying to make it work or operating on a shoe-string budget or even no-budget.

1. Go talk to someone. Call your local university, tafe or community college and ask to speak to a careers advisor or business trainer. They will tell you what you need to know. You don't need to enroll... it's just a fact finding mission. Even so, if you shop around you could find a Cert IV in Small Business for $2000 to $3000 and there are often payment plans.

2. Join a business group. Chambers of Commerce are not only a great way to network but can also provide a wealth of information, inspiration and motivation from those who have trod the road before you.

3. Find a mentor. Don't take on your uncle Bob or the next door neighbour as a mentor. It could end in disaster. There are often mentor programs running in many areas. Find out if there are any business incubators in your area. They often have funding through the NEIS scheme which provides a qualified mentor and a cert IV in Small Business (conditions will apply).

4. Contact and advisor from The Business Enterprise Centre (BEC). This organisation is in part, government funded and has offices in all metro and major regional centres. Consultation is free plus they usually have a great workshop program available at minimal cost (mostly $25-$30 per session).

5. Reading and research. There are many books plus a host of up-to-date and relevant info on government websites about anything business.

Business is all about money, and money is a very serious business. Learn how to make it (product and marketing). Learn how to keep it (business finance).
Nigel Smith , March 06, 2012
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nwsmith01
Developing a training budget is a great idea. The big questions are...
How much will you allocate?
What training do you need?
Who in your organisation will be trained

As a qualified business trainer I can tell you that you need to start with a training needs assessment. This is imperative. Otherwise you may be applying training budget dollars unnecessarily and wasting hard earned profit. This will ensure the best ROI.
Nigel Smith , March 06, 2012
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