How to Start a Computer Training Business

Start a computer training business by following these 10 steps:

1. Plan your Computer Training Business
2. Form your Computer Training Business into a Legal Entity
3. Register your Computer Training Business for Taxes
4. Open a Business Bank Account & Credit Card
5. Set up Accounting for your Computer Training Business
6. Get the Necessary Permits & Licenses for your Computer Training Business
7. Get Computer Training Business Insurance
8. Define your Computer Training Business Brand
9. Create your Computer Training Business Website
10. Set up your Business Phone System

We have put together this simple guide to starting your computer training business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.

Exploring your options? Check out other small business ideas.

STEP 1: Plan your business

A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:

• What will you name your business?
• What are the startup and ongoing costs?
• Who is your target market?
• How much can you charge customers?

Luckily we have done a lot of this research for you.

What will you name your business?

Choosing the right name is very important. Read our detailed guide on how to name your business. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.

What are the costs involved in opening a computer training business?

Startup costs to launch this type of business vary depending on the business model. Many computer educators work from home, traveling to their clients or teaching classes online. Others go big from the start, opening an educational facility complete with state-of-the-art equipment.

Launching a home-based computer education program requires little more than computers, software, training materials, insurance, and an advertising budget. This can be done for $2,000 or less.

Opening a training facility, however, requires a significantly higher startup budget. An 850 square foot facility, equipped with multiple computers, furniture, fixtures, and staff, costs $55,000 to $80,000. Exact costs vary based on your region, the number of team members you employ, and how much equipment you plan to start with.

If you have the necessary computer knowledge but aren’t sure where to start, consider one of the many franchise opportunities. While most franchises have specific rules regarding how much startup capital you must have, many new business owners find that they save money in the long run. Aligning yourself with the right franchise gives you access to a proven business model, marketing support, and brand recognition.3

What are the ongoing expenses for a computer training business?

A home-based computer training business faces few ongoing expenses. Your budget should include office supplies, equipment maintenance, travel expenses, marketing, business insurance, payroll, and printing costs for educational materials.

If you elect to open a training facility, you will need to budget for additional expenses. These include rent, utilities, building maintenance, and additional business insurance.

Whichever route you take, your annual budget should also include ongoing education and certification for you and your staff. Consider this an investment in your business’s future growth and stability.

Who is the target market?

When creating your detailed business plan, spend ample time researching what computer skills are in high demand. Identify what parts of the market are oversaturated and avoid those. Focus on niches that lack quality training. This will help you clearly identify your target market and develop a targeted marketing plan.

Examples of target niches include:

• Individuals who have just purchased their first computer
• Fortune 500 companies who require Microsoft training for their workforce
• Real estate agents who lack desktop publishing skills
• Human resources software training
• Patient management software training for physicians and medical staff

How does a computer training business make money?

Your computer training business will make money by charging a fee for your educational services. Most computer trainers charge a flat hourly rate or a flat fee per class session.

How much can you charge customers?

Pricing will vary depending on the course and educational setting. A basic online computer class might cost $49, while more advanced training might cost $175 per person. The average cost for a private training course is $40-$60, depending on the material taught.

How much profit can a computer training business make?

The estimated profit for the 850 square foot facility we mentioned earlier is almost $49,000 in the first year. The second and third year’s estimated profits are just over $77,000.

Now, let’s look at a home-based training business that teaches three hour-long classes six days/week at $175/person. If each class has seven students in it, this comes to $3,675 per week. While the revenue looks significantly lower, your overhead expenses are minimal. If you have $1,000 in monthly overhead expenses, your annual profits will reach almost $165,000.

How can you make your business more profitable?

Diversity is key in this profession. Offer a wide range of classes and attendance options. Offering access to your training materials for a small fee is a great way to boost your business’s annual profits.

STEP 2: Form a legal entity

The most common business structure types are the sole proprietorship, partnership, limited liability company (LLC), and corporation.

Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your computer training business is sued.

You can form an LLC yourself and pay only the minimal state LLC costs or hire one of the Best LLC Services for a small, additional fee.

STEP 3: Register for taxes

You will need to register for a variety of state and federal taxes before you can open for business.

In order to register for taxes you will need to apply for an EIN. It's really easy and free!

There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.

STEP 4: Open a business bank account & credit card

Using dedicated business banking and credit accounts is essential for personal asset protection.

When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.

Open a business bank account

Besides being a requirement when applying for business loans, opening a business bank account:

• Separates your personal assets from your company's assets, which is necessary for personal asset protection.
• Makes accounting and tax filing easier.

Get a business credit card

Getting a business credit card helps you:

• Separate personal and business expenses by putting your business' expenses all in one place.
• Build your company's credit history, which can be useful to raise money later on.

STEP 5: Set up business accounting

Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.

Make LLC accounting easy with our LLC Expenses Cheat Sheet.

STEP 6: Obtain necessary permits and licenses

Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.

STEP 7: Get business insurance

Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.

There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.

Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.

Is this Business Right For You?

Do you have a firm understanding of computers and software? Are computers your passion, and do you enjoy passing your knowledge on to others? Are you ready to be your own boss and take charge of your own future? If so, launching a computer training business could be the ideal business venture.

What happens during a typical day at a computer training business?

As a computer trainer, you will spend your days educating clients on all things related to computers. From computer basics to advanced software applications, it’s your job to ensure every student leaves with newfound computer confidence.

When you aren’t teaching, you will spend your time honing your own skills and learning about new and emerging industry trends. Your clients will look to you as an authority figure on the subject. Gaining and maintaining their trust means you should know about technological advancements and changes as soon as they’re announced.

While your computer knowledge is what will generate revenue, this knowledge is wasted if you don’t have any customers. Therefore, it’s important that you dedicate part of your time to a marketing strategy and other business-related tasks.

What are some skills and experiences that will help you build a successful computer training business?

Success in computer training requires advanced computer knowledge and the ability to effectively share that knowledge with others. You must be able to communicate with students from all backgrounds and skill levels.

Depending on your business model, you may work in a group setting or provide one-on-one training. Education sessions should be organized and detailed. It’s also important that you remain flexible and patient. Keep in mind, most of your students are intimidated by the very idea of learning about computers. Therefore, it’s important that your passion for computers shines through and that you create a safe and engaging learning environment.

While not a requirement, having computer certifications is strongly recommended. Your certifications will show customers that you possess the skills you claim to have and that you value your own education. Since there are a number of specialized certifications, this will also help in targeting specific niches.

What is the growth potential for a computer training business?

While the computer training sector is competitive, there is significant room for growth. Business owners with long-term growth goals are encouraged to write a well thought out business plan with defined goals and a growth strategy.

The annual average companies spend on general staff training is $3,000, with $8,200 spent on information systems training. Before launching your business, conduct research on where the greatest opportunities lie and focus your energies there. Play on your strengths and offer training programs that set you apart from the competition.