Q: I have heard many different schools of thought on how much development time should be provided for class development or customized contract training. What does LERN recommend when development time is required? Thank you.
A: LERN says they you should not pay more than 10% of your anticipated operating margin for development costs.Thus, if over three years, you are projecting $10,000 in income with an operating margin of 50%, you should not be paying more than $500 (10% of OM) for development.
In Contract Training, you can sometimes incorporate your development costs into your price, so in that case, it does not make as much of a difference. You, of course, need to make sure that the costs do not result in a price that is out of line with what you can expect people to pay.
On the other hand, if you are looking for how much development time you should pay an instructor in relation to the hours spent teaching, then it would make sense that if you incorporate the prep time into your price and maintain the 50% operating margin, it is not a big issue. However, if you are paying the instructor and cannot charge for the time in your contract price, then the 10% guideline is what we would recommend. That would mean that for every 10 hours of instructional time, you would pay for one hour of prep.
This is a question we have received multiple times recently, so I am going to do a survey of our members to what the standard is--if there is one, among LERN member programs.
Questions
Development Time
Jun 20, 2018 3:26:18 AM
by
Jordan Kivley
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