PODCAST - The cost of doing nothing why stalled programs hurt margins
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Now, let's dive in.
Do you know the cost of not launching your e-learning program online course or learning experience program? Well, today on the show, I'm gonna share with you the two costs that you need to be aware of if you decide to never launch your e-learning program. And it all comes down to two very simple accounting principles that I learned when I was on my way to becoming a certified public accountant.
There were two things. The [00:02:00] first one. Is a cost that none of us ever want, and it is sunk cost. Therefore, you are risking sunk cost. What is a sunk cost? Well, sunk cost is a cost that you have already invested in. You have already paid that you can't get back. It could be. Monetary. It could be your time, your team's time.
The point is a sunk cost is something that. You can't get back once you've spent it and you're not getting any ROI return on the investment once you spend it. I was very upset when I first heard about what a sunk cost is, and as a business owner for the past decade, I have definitely had my share of [00:03:00] investments that became.
Sunk costs. Well, the great thing is your e-learning program doesn't have to become a sunk cost because once you actually finish your e-learning program and get it live, everything that you invested in it now becomes an investment that you can get ROI from. That's what an e-learning program is. It is an investment.
It is an asset. This is also an asset. And why is that? Well, no matter if you are building your online courses, your learning experiences, your e-learning to train your team members. Or as a product that you are looking to sell, it becomes an asset for your business. Because by capturing the best knowledge of your best people and training and empowering your other people with that knowledge, you [00:04:00] are going to have more efficient and effective.
Employees. This means that your current employees are gonna be able to do more and achieve more, which means that you're gonna save money on having to hire new employees. Instead, you're gonna get more out of your current employees if you end up selling your e-learning program as a product or as part of a product or service that you already.
Sell. You are creating a passive income stream for your business that you can sell worldwide. You are no longer limited by the location of your business. So I highly recommend that you avoid the sunk cost risk and instead create an asset with your investment. 'cause the ROI. Is unlimited now. At the time when I was studying to become an accountant, I was going to one of the top 10 accounting schools in the country, if not in the world, the University of [00:05:00] Denver.
And we were learning a bunch of different things and I knew when I was in school that I ultimately did not. See myself having a career in public accounting, but I still loved math and what accounting was teaching me as a business owner because at the same time I was heavily into entrepreneurship and this next cost may have been the biggest and most important principle that I learned while studying to be a certified public accountant.
Opportunity costs. So yes, you have invested money in creating your e-learning program. You've invested money, you've invested time, and you have invested other resources as well. Well, what if I told you that the marketplace is suffering because you have not finished your online course or e-learning program.
[00:06:00] Learners who could be learning from you are suffering because your program isn't out there. And what does this relate to? Opportunity costs. Well, by not finishing your program, you are not only punishing the marketplace, the value you have that you can be sharing globally with your learners as a product that you're selling or with your team members so that they can be better and provide even more value in the marketplace.
This. Is what the opportunity cost is for your business. And typically, my clients who invest in creating an e-learning program for their business are making anywhere from a hundred K all the way to $1 [00:07:00] million per year. And this is businesses. Of various sizes, and if you set up your e-learning programs, as I teach on this channel, on my podcast, and in my programs, you are going to be spending a fraction of what you're making on your program.
My clients typically only spend max five. It's a 10 KA year on their technology max, and more likely it's around one to two KA year. Well spending one to 2K or five to 10 KA year, even if you're getting. A hundred thousand dollars a year of revenue. This is amazing. ROI. But Johnny, you're not including all the staff time.
Well, [00:08:00] that's why we always wanna start with one program, the highest ROI program, not just for us, but for our learners, and we focus our time and our energy there, and once we build it and we put it into our technology, really. There aren't that many costs. The only cost becomes executing a marketing strategy, and that's where you can have all your people spend their time is what is the best way to sell this program.
And the great thing is once you have an e-learning program, depending on what type of business you are, you can even get. Higher and better results. But once you have an e-learning program, your e-learning program becomes a marketing tool for the rest of your business. And I share exactly how different businesses can do this in my video and podcast episode.
All about the seven types of businesses that get the most ROI from [00:09:00] having an e-learning program. Your business may be one of those businesses, and yet again, this is on the low end. On the high end, we're talking about millions. Of dollars per year, Gale, without head count, you can scale this without having to hire more people.
You can keep your same team and continue to build revenue. Now what if you are planning on using your e-learning program to train your team members, train your employees well? Have you ever heard of the 80 20 rule or the Pareto principle? Here's what it is. Do you know that 80. Percent of results are created by 20% of efforts.
This means that 80% of the results you are getting in your business are being [00:10:00] created by. 20% of your staff, 20% of your team, and if we take this even deeper, what is 80% of 80%? 64%. And what is 20% of 20%? 4%. This means that 64% of the results in your business are created by 4% of your staff. And the flip of this is that 80% of your staff are only creating 20%.
Of your results. Well, what if we just completely eliminated the waste in your business? How do we do that, Johnny? We do it by taking the knowledge of the [00:11:00] 20% of the 4%, and we teach
the 80%. And when we teach the 80%. Now, instead of just having 20% of our workforce, 20% of our teams creating 80% of our results in our business, we have a hundred percent of our team creating the top results in our business. The 80 20 rule no longer applies to us. We are five x-ing the results we're getting in our business without hiring more people.
Without spending more money. Now, once you have all of your people performing at this high level. I do recommend that you give your employees a raise because giving them a 15% raise is gonna cost you a lot less than hiring a new person. [00:12:00] On average to hire someone and pay them a hundred thousand dollars a year is gonna cost about $150,000, and they're not gonna be productive for a whole year, and they're probably not gonna be in the 20% after that year.
So let's capture the knowledge. Of the 20% or better yet the 4% and teach the 80% and five x our business. Now, what if you did both of these things, created a new profit center and increased the productivity of your team? By five x. This is the opportunity cost of not finishing your online course, your e-learning program, and getting it across the finish line, which is why I wanna share with you my four step process to help you get your e-learning program across the finish line.
This is what I [00:13:00] call my asap. Method asap, as in as soon as possible, and I want you to get your e-learning program out there as soon as possible because I want you to turn those sunk costs into. An asset and I want you to capitalize on the opportunities for your business. That could mean seven figures of a passive automated income stream for your organization, or five x-ing the effectiveness and efficiency of your team, members of your organization.
Or both? Well, my first step of my ASAP method comes back to my time in accounting. Audit. I worked in public accounting very briefly and I did it [00:14:00] because I met the most amazing people at PricewaterhouseCoopers. I got hired to work on the Risk Assurance IT audit team and the director on that team. Mike to this day, is an amazing mentor of mine.
We actually connected on the Lord of the Rings being both of our favorite movies of all time, and that was the only thing. I talked about in my interview with him when I was interviewing at all of the public accounting firms. I chose PWC because of the people and because of my passion for the entertainment industry and their book of business, including some of the top movie production studios at the time.
Well, ultimately, at my time at pwc, I learned the importance of auditing. The systems of our clients. Well, we did it because we wanted to make sure that the IT systems [00:15:00] supporting the accounting for the organization were safe and sound, and we made sure that they were following the proper guidelines that public companies are required to do for reporting purposes.
Now an audit. For your company, your organization means making sure that your business is operating at its best ability. This means identifying any hidden costs related to your business, related to the e-learning program that you've already started building. Maybe you're overpaying on the technology. You should be paying less.
Then $10,000 a year on your technology, depending how large your organization is, much closer to maybe a thousand to $2,000 a year. We also wanna look into the opportunities that we discussed today and how those fit in with your business. So we're really doing it as. Assessment of your business. So if your program is [00:16:00] stalled right now, it's as simple as you taking a sheet of paper and making a bullet pointed list of how e-learning will best serve your organization.
And what you are willing to spend on it to get the ROI to actually uncover these opportunities that we talked about today in your business. That's why we start with an audit. One thing that people do when they start building an e-learning program is instead of looking at the business reason why we're doing it, we get excited about the idea of.
Oh my God. We can build all these courses and sell them. We can build these powerful learning experiences and serve so many people. This would be amazing. Instead of looking at how does it serve the business, we start with an audit because we start with the ROI. What is the ROI that we are looking to get for our company?
So I want you to audit whatever you currently have. [00:17:00] Write down that bullet pointed list, and then we move on. To the next step. Step two is simplify. It can be easy to bite off more than we can chew. When we are looking at building an e-learning program, we're thinking about all the different departments we can support.
We're thinking about all the different courses we can sell, all the different learners we can serve instead of what is one learning experience that we can develop that's gonna bring ROI to our business. Let's build that. Get the ROI and use what we make on that program. Either what we save by training our team members more powerfully or what we make by selling that program and reinvest that into the business and build more programs.
That's how you should do it, and that's why we want to simplify. What you're building, if we go back to the 80 20 rule, we go back to the 64 4 rule. We wanna identify the 20% better yet we wanna [00:18:00] identify the 4%. What is the one program that you can create today that is gonna have the highest impact in your organization?
And that is the only thing we want to build. We don't wanna build all of them. We can get there. Let's start with one. One of my enterprise Learning Accelerator partnership clients, CoStar, they only have three programs and two of the three make up the majority of their income for their e-learning business, and one of the two makes up at least 64% of the income for their e-learning business.
So together, over the past three years, we have focused on. That one program. It's called the chia. We started with the chia. Then a year and a half, two years later, we finally put some work into the Kata, and now we're looking at, okay, how can we make the chia even better? How can we make the kata even better?
We're not even looking at other programs yet. We know that with the 80 20 rule, we're already [00:19:00] impacting thousands of students, professors, and industry professionals worldwide. At the top universities, top hospitality organizations like Marriott. We are already creating Global Impact and using the ASAP method, they are also saving six figures a year on their e-learning.
Even after paying me and my company, e-learning partners, let's move on. To the next step. Step three is to automate, and we automate in two ways. We automate with our team and we automate with AI team. And AI and the backbone of this is making sure that instead of being distracted by all the bells and whistles and spending 50 K to $1 million a year on an e-learning software, that we get a software that supports our goals that is easy for our team to use, and easy for us to build automations [00:20:00] to serve the business.
Did you know that the first commercially available computer was released in the 1950s and it cost $1 million to purchase? In today's dollars, that's $12 million. And guess what? It does significantly less than our smartphones in our pockets and our smartphones sometimes, depending on what your deal is with your service provider, could be.
Free at most, you're gonna pay about a thousand dollars for a cell phone that is significantly less than paying $12 million for a computer. It's the same thing with e-learning technology. When e-learning first came about, it was very costly to integrate an e-learning software. Even seven years ago when I was building my first program to sell, I spent about $150,000 using.
The least expensive options at the time to get a course out there that ultimately failed because I didn't do an audit of my business. I didn't simplify [00:21:00] what I was trying to offer. Instead of offering just one course, I wanted to offer a whole library of courses and I didn't actually know the problem I was solving.
And instead of automating, using technology that for my size business at the time, should have only cost me a couple grand a year. I did everything wrong and it took me a couple years to launch instead of the ASAP Method is really built to launch A to Z and E-learning program in less than 30 days.
Depending on how large your business is, there are different things that can take a little bit longer. When I'm working with my enterprise level clients, there's a lot more approvals and different things internally that can drag that. Process on? Well, the ASAP method is built to launch a e-learning program in less than 30 days.
Now, depending on how large your company is and all the approvals internally that you need to get, and depending on how customized, you need your valuable e-learning software, it can take longer. But once we [00:22:00] get everything automated, it is time for the most exciting part of this. Profit. And it's not just profit, it's what we do with these profits.
Just like we do with our Enterprise Learning Accelerator partnership client CoStar, we take the profits that we're making from the program and re reinvest it into the program. Setting automations up on automatically serving our learners, letting them know, hey. You finished your chia. Here's the advanced version of the program.
The kata here is all you have to do to sign up. It's all automated, and now they can earn their kata, which helps them even deeper. We reinvest the profits to make the system even better by creating really fluid upsell opportunities, cross sell opportunities by creating automation [00:23:00] so that these certifications that your learners are offering.
Maybe they only last for four or five years. How do we automatically get them to enroll in our program again, to update their license? We take all of those profits to make sure that we are automating all of that, so that we give you and your team your time back while exponentially growing profits with the asset and the opportunities.
That we have created for ourselves. Now, if you want help with any of this, and you are running a company that makes $50 million a year and has either a training department or maybe you started building out an e-learning or training department. But your program got stalled. This is where having an e-learning partner like myself and my organization is extremely valuable to you, and every single year with my Enterprise Learning Accelerator program, I partner with [00:24:00] various organizations and you can find out if this is the best fit for you and your organization by clicking on the link in the description below or in the show notes.
If you're listening to this as a podcast. I'll see you in the next episode. Thanks for tuning in to Learning Transformed Now, if you're designing a transformational learning experience and wanna skip the overwhelm of trial and error. Check out our e-learning platform finder. Just answer a few simple questions and we'll match you with the right platform plus an extended free trial.
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Thanks for listening and I'll catch you in the next episode.
AI is rising and so are.
