How much does it cost to start your own Registered Training Organisation (RTO)?
If you’re thinking about starting your own RTO, this is one of the first questions you should ask.
To be realistic, you can’t expect a simple response like “$50,000” without taking into account a few variables. Setting up an RTO isn’t easy.
For first-time RTO owners, as well as veterans of the business, taking into account all of the aspects that contribute to RTO set-up cost and financial feasibility is the first step.
Taking the time to research and analyse each facet of establishing an RTO can be regarded as a significant investment.
Consulting Fees & Annual Registration Fee
One of the most significant cost factors of an RTO is the Annual Registration Fee. If you do not pay the Annual Registration Fee and Consulting Fees of an RTO in Australia, your training may be void. An RTO may deregister you if they are non-compliant with Australian Standards. To protect yourself against such a risk, you should consider hiring an independent RTO audit service.
Depending on the number of qualifications, the initial registration fee for an RTO in Australia can be as high as $11,000. Consulting fees for this service may range from $5,000 to $25,000, but this fee may be much lower if you are setting up the RTO yourself. Consulting fees for an RTO include attendance at a registration audit, preparing policy documents and forms, training and assessment strategies, and identifying and implementing effective systems and procedures.
Accounting Fees
The process of accounting for Registered Training Organisations (RTOs) is complex, due to the highly technical nature of the activities involved and the strict compliance regulations. These organisations are regulated by the Victorian Registration and Qualifications Authority (RQA) and are nationally recognised providers of training. As a registered training organisation, you must comply with the Australian Qualifications Training Framework (AQTF), which lays out the requirements for registering.
The ASQA will examine the business’s financial health, whether it is financially viable and compliant with tax obligations. The auditors will assess the financial management systems of the organisation, and the accuracy of its forecast projections, including underlying assumptions based on aspirations. They will also assess the organisation’s financial systems, including fee structures, enrolment, student support, marketing, and training.
Facilities and Equipment
Starting an RTO is not a small undertaking. It takes considerable research and effort to get approved as an RTO. Several registering bodies will require evidence of qualifications, experience, insurance and more before an RTO can be registered. In addition to demonstrating compliance with quality standards, an RTO needs to meet the standards for training and assessment in the Australian Qualifications Framework (AQF).
The initial registration fee for an RTO is $500 for lodging. Then, $8000 is required for the assessment of the first qualification. Additional qualifications, units of competency or delivery sites will require additional assessment. Once registered, annual registration fees will depend on the scale of the course offerings. The costs of running an RTO may also depend on physical infrastructure, staffing, legal and accounting fees, and marketing strategies. Depending on the scale of the RTO, the costs may be significantly greater or lower than the initial cost.
Get in Touch with Australia’s Top RTO Consultants
Changing the lives of others is what your business is about. Helping your business succeed is what Fronto Advisory are about. Save time, unnecessary headaches, and money by working with RTO consultants who are familiar with all RTO policies and procedures in Australia. Fronto Advisory has assisted businesses in transitioning from sole traders to larger, more lucrative businesses.
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