Financial Planning
By now you should:
- Have a realistic understanding of the first aid training market in your area
- Have a plan to differentiate your business from others
- Have attended (or plan to) further first aid training to develop your own knowledge and understanding
- Have attended (or plan to) a teaching qualification (and assessment qualification if not included)
- Have observed (or plan to) other trainers
- Have gained (or plan to) some first aid experience.
- Have decided how you will certificate your training courses
- Have decided how you will operate your business (sole trader or Limited Company).
Now is the time to start thinking about start-up costs and ongoing costs.
For many people this is their first though is “what to I need to buy?” before they have considered any of the point above. They have now made a financial commitment to a business (either from savings or from a loan) and because they have not thought things through they have a pile of equipment in the garage, gathering dust with no bookings coming in.
If you have considered and acted upon the points above, one of the few things remaining now is to purchase the equipment needed to deliver your training.
This is about hitting a sweet-spot between overspending on too much equipment you may not necessarily need (and potentially over committing financially) and underspending in order to save money but not providing enough equipment to deliver a credible course or using cheap, poor quality equipment which reflects badly on you.
Here is a minimum equipment list for a one-day Emergency First Aid at Work course:
Fixed Equipment
These are you one-off purchases you need to get things going. They represent a large initial outgoing but yu only have to buy them once, compared to you consumables which will need to be replaced regularly. That said, nothing lasts forever and fixed equipment will need to be replaced eventually.
Vehicle
It is unlikely that you will need a new vehicle to begin with but you must at least have a vehicle to begin with and it must have at least enough space to be able to get everything in. To begin with you do not need much equipment but some of the equipment – especially the CPR mannequins – are bulky. It must also be reliable as you can expect to do some serious mileage as your business grows and that till take its toll on your vehicle.
Let’s not be too precious about this; whilst arriving at a venue in a brand new executive vehicle sets a good impression your ability to deliver a high quality training course will be remembered long after they have forgotten what vehicle you turned up in.
Laptop / Tablet and Projector (£1,000 - £2,000)
Again, you may already have a laptop but if not you will need one. It does not have to be new or top-end as it will only be running videos and PowerPoint or Keynote for training delivery and it is perfectly possible to run a large business with just office software, email and a web browser.
Slideshows are the standard training delivery tool – not necessarily the best - but certainly the default setting for many. In many venues there will already be a projector you can plug into but if not you will need your own projector (as well as an extension cable and connections). The price of these have come down exponentially, starting at around £250. The brighter the better – it is not always possible to completely ‘blackout’ a room.
6 x CPR Mannequins (£450 - £1,000)
The Laerdal Little Anne is the iconic feature of any First Aid course. These start at around £200.00 each but they are available as a pack of four for a slight discount. Alternatives are available including the CPR Prompt (£90), The Simulaids Brad (£230) and Prestan (£185).
We have tried all of them and with the exception of the CPR Prompt they all work well. The Laerdal Anne and Prestan models also feature feedback technology to provide learners with a visual representation of their CPR which many find useful.
Some Awarding Organisations will dictate the number of CPR mannequins you have available – usually 1 mannequin per 2 learners.
4 x AED Trainers (£700 - £2,000)
In an ideal world you would have a selection of AED trainers to reflect the actual AED unit your client will be using. That can come in time when your business has developed and your bank balance is more comfortable. The principle behind an AED is that they are so simple to use, anyone can use them. Whilt there are about 30 or 40 different makes and models available on the market, any generic AED trainer will prepare candidates to use any specific AED.
The Universal AED Practi-Trainer represents great value at around £230 compared to ‘Model Specific’ AED trainers which can be £300 - £600 each. The Universal AED Practi-Trainer is also available as a pack of four for £820.
Some Awarding Organisations will dictate the number of AED training devices you have available – usually 1 AED trainer per 2 or 3 learners. Four AED trainers is a reasonable number for up to 12 candidates.
Storage (£20 - £100)
Think about how you are going to store and move all of your equipment. With the exception of the CPR mannequins we use Peli-Cases which are idea; they are strong, easy to carry, stack nicely but they are very expensive. To begin with we used a combination of plastic storage boxes from discounts shops and large sports bags. They don’t have to be fancy they have to be robust and clean. If they match it looks nice. That’s it.
Consumables
These are the items you will go through on courses and never get back. These are a continual cost for every course you run. They don’t add up to much for each course but over a year they can and this all comes out of your profit.
Gloves (£5 per course)
A box of 100 of Small, Medium and Large non-powdered vinyl gloves will cost you about £5 each. You can expect to go through a box on average per course. Of course they will not all be used at the same rate so stock up on the ones you go through most.
Don’t be precious about using these gloves. Encouraging candidates to put on gloves for each activity will develop their muscle memory and increase the likelihood of putting on new gloves each time.
And don’t ask candidates to reuse gloves. Not only does it contradict infection control guidance ) ‘oh but they’re clean because they have only been used in training’ ) it looks like you are being cheap.
Replacement Lungs for CPR Mannequins. (£6 - £12 per course)
Replace the lungs of each of your CPR mannequins after every course. Most brands charge around £80 - £100 for a pack of 100 lungs.
Some consumables are so cheap it is difficult to work out the cost per course. These small items include:
- Whiteboard Pens (£5)
- a selection of wound dressings (£5)
- a selection of triangular bandages (£5)
- pens for candidates (£1)
- bin bags (£1)
Overall each course will probably cost you around £5 - £10 in consumables. Which doesn’t seem much but if you are delivering a one-day first aid course every year, that is £500 in trivial items which are being thrown away so it is worth, not cutting back on them, but accounting for them in your pricing.
For a basic course the initial expenditure on equipment is around £2,000 - £5,000 and, except for travel, it has cost you a few quid in consumables you will need to replace for the next course. In terms of business start up expenses, this really is no great shakes.
This low start-up cost is another reason why so many see first aid training as an ideal business opportunity and why there is so much competition.
Of course, you may already have a laptop and you don’t have to buy everything new to begin with but this should be considered a minimum. Turning up to deliver a training course to 12 candidates with a flip chart, two CPR mannequins and a bag of bandages, and then charging them, say £500.00 for 6 hours work is not going to guarantee repeat business. Yes, you have made £500 for a day’s work but you won’t be doing this every day and furthermore if the client decides you weren’t good enough they will go somewhere else next time. That is £500 you will never earn again.
If you provide the best quality service you can – and providing enough equipment of a suitable standard is part of that – you will have repeat business from that customer and other work from referrals. Because you spent a little bit more initially you are more likely to have more work coming in more regularly without spending a penny on advertising.
This is not to say that the more you spend on equipment the more likely you will find work. You can spend a fortune on exotic, high quality equipment which may not be used and if you have had to use a loan for these purchase you may financially overstretch yourself without the work coming in. If you are not delivering paediatric first aid for example, don’t buy paediatric CPR mannequins until you need to.
Insurance
Public Liability Insurance
As you will be working on someone’s property – be it an individuals home or a business’s office you will need Public Liability Insurance as a minimum. Public Liability covers the costs of compensation, associated expenses and any legal costs that are incurred as a result of damage or loss but not from those relating to your professional practice; if someone fell at your premises or if you accidentally damaged their property, for example.
Professional Indemnity Insurance
Professional Indemnity insurance (also called Medical Malpractice or Medical Indemnity in the context of First Aid associated businesses) protects individuals from claims of negligence due to accidents, errors or omissions due to your professional practice.
Such a claim may be based your professional practice may be due to performing the wrong technique, the correct technique but badly, or the provision of inappropriate treatment due to misdiagnosis.
This level of insurance may also cover the individual for losses experienced by the claimant as a result of advice offered by the individual in a professional capacity. This is especially important for training providers.
Legal Cover
Many Public Liability and Professional Indemnity insurance policies will have this included as a standard. If it is offered as an optional extra for a few extra pounds don’t quibble. It is all very well having insurance but if you cannot afford the legal fees associated with it, it isn’t much help.
Employer’s Liability
If you decide to operate as a Limited Company (more on that in the next article) you will have to have Employer’s Liability insurance. Even if you are the owner and only person working on the business, you are an employee of your own business.
Equipment Insurance
This is not essential but it is wise as your business depends upon your equipment – if your equipment was lost, damaged or stolen, could you operate. Unfortunatley most Equipment Insurance is very limited; they often do not cover equipment if it is stolen from a room which was not locked or a vehicle – which is unfortunate as that is probably how your equipment was stolen in the first place.
Your Home Insurance may cover your equipment while it is at home but probably not when you are at work. Find out if it covers your work equipment while it is in a garage, your shed or your car?
Vehicle Insurance
Now you are working for yourself and using your own vehicle, make sure you change your vehicle insurance to Business Insurance. It usually only increases your premium by a few pounds but if you have an accident while using your car travelling to work, you may not be covered otherwise. This is a small oversight which may have serious consequences should something happen.
Vehicle Breakdown
This is something else many people overlook. What is the level of cover provided by your breakdown service? If you are miles from home will they get you home? Will they get you to your destination so that you can still get deliver the work?
Income protection
There are many benefits wot being self employed or running your own business but now you are flying solo you don’t have an employer who would normally provide you with benefits of a salaried job. What will you do if your business folds or you cannot work due to ill health?
Private Healthcare
This is no longer the domain of the affluent. Private healthcare cover can be as little as £10 a month and it might mean the difference between being see and treated ina matter of weeks or matter of months. How much time could you afford to take off work if you are waiting for NHS referrals and treatment?
Other Business Costs
These will vary depending on how you operate as a business but remember to include:
- Telephone bills – landline and mobile if you are using both
- Accountants fees
- Professional Memberships
- Software subscriptions (office software, anti-virus etc)
- Website Hosting & Domain Name registrations
The Maths
With these things in mind work out the following:
1. Start Up Costs
What is the sum total of all of your start up costs including equipment, vehicles and any one-off fees to Awarding Organisations.
How will you pay for this? If you are relying on a loan, use an on-line loan calculator to work out the monthly repayment amount.
2. Annual Costs
What will need to be paid annually? These are typically subscription fees to Awarding Organisations, professional memberships, software subscriptions, website costs and accountancy fees. They also include all of your insurances and vehicles bills (e.g. Tax, breakdown and MOTs)
It is also worth including some contingency in here. How much would it cost to repair your car should it break down?
You will need to have this much available every year whether you make any money or not. Divide this number by 12 to work out what you would need to put aside every month.
3. Ongoing Costs
These are either direct debits paid monthly (such as subscriptions and insurances if not paid annually) or other bills such as mobile phone. Some may be ad-hoc such as advertising costs.
4. Bottom Line
From the above work out how much you need to bring in each month in addition to how much you want to earn.
This is your Bottom Line. This is how much you need to bring in to pay all of your bills, keep the business running and pay yourself. These have to be paid whether you work or not.
That is your target to make a living and sustain. No profit, no birthdays or holidays, just the bills being paid.
5. How much work is that?
If we say the average Emergency First Aid at Work course or three day First Aid at Work course is approximately £50 - £80 per person per day and you set a minimum limit of 6 candidates on a course, you minimum income is going to be £300 - £480 per day.
From this, take out your consumable costs and anything else it will cost you to run a course (certificates for a minimum of 6 candidates, venue hire, travel). This is your profit.
How many day’s work will you need to meet your bottom line?
Of course, it is unlikely you will deliver that many courses in your first year so freelancing for other companies is a common practice for first aid trainers who run their own business. We have all done it. There is no shame in it and all income is income! There are also benefits to freelancing- you will work with other trainers and you will learn from. You will see how other businesses operate.
(Just don’t even think about approaching someone else’s clients if you are working for them. That is a kiss of death to your future prospects.)
Let's say for a new trainer the average daily rate is £100 - £150 per day (probably not including travel or accommodation). How many days will you need to work for other people to run your business?
If you are confident you can meet that target it is now you should concider how you plan to run your business...