Last Minute Training must hire or become Toronto’s “Kijiji of training”
Last Minute Training
2017 Danforth Ave., Suite 200 Toronto, ON M4C 1J7
Last Minute Training could be, as its owner puts it, “a Kijiji of training.”
But that would require venturing into unfamiliar and expensive territory — selling to consumers instead of businesses. Alternatively, the company, which finds and fills vacant seats in IT and computer training courses, could stay on the same path and maintain its focus on the corporate world. But this won’t be cheap either — sales must increase for profits to grow, which means investing in a salesperson without any guarantee of returns.
At the moment the business is profitable, but cash is tight, and the company can’t afford to make a strategic mistake. Either route will require a significant expense, and likely require taking on an investor.
Founded in 2005 by Louis Trahan, a former marketing executive, Last Minute Training claims to help vendors improve profits by turning empty seats into sales, while giving career-climbing course participants the chance to gain in-demand knowledge, often at a discounted rate.
It’s a valuable matchmaking service, especially for training providers with fixed overhead costs.
“You have to put bodies in seats because you have rent, you have structure costs,” says Trahan. Last Minute Training pools together those vendor courses and draws in buyers — mostly professionals looking to polish their skill sets — by offering discounts, which start at a minimum of 20 per cent. The company earns its money through course posting fees, buying and reselling courses, and sales commissions.
This business model has seen Last Minute Training grow from zero to five full-time employees over the past 8 years. Trahan estimates sales will increase from $1.3 million in 2011 to $1.5 million in 2012. His ultimate goal is to perfect Last Minute Training’s service offering in Canada and then expand into the US, allowing the company to ramp revenue up to $15 million within 3 to 5 years.
That’s a small piece of a very big pie: according to industry website Trainingindustry.com, the 2011 spend for corporate and government training activities in North America was approximately $130 billion.
Trahan sees two paths ahead of him. By becoming a broader online marketplace that caters to consumers and includes personal development training – such as photography and cooking classes – the company could become that “Kijiji of training,” and gain a much larger, and more profitable, customer base.
This path is complicated. Trahan’s model is similar to that of last-minute travel websites. But they’re plugged into central booking systems for airlines and hotel chains. Training providers use a variety of systems to fill seats, meaning no similar system exists for Trahan’s company. As a result, Trahan’s staff have had to input all 8,000 courses listed on their website manually.
“The information can’t be 100% accurate because we don’t have a live connection with a registration system,” explains Trahan.
By increasing the volume of courses available, he would also have to greatly increase his overhead by taking on more staff to enter all that data and keep the website up to date.
To solve this problem, Trahan is considering building a proprietary training inventory system at an estimated cost of $250,000. This would probably require finding an investor, which Trahan would rather avoid.
His second option is less radical — keeping the business essentially the same, but expanding his sales staff to find new, and better serve existing, corporate training customers. Trahan hopes a full-time salesperson can move about $3 million a year worth of courses by focusing specifically on large corporate accounts. But he estimates it would cost over $100,000 to pay and train a professional salesperson, and take up to a year before the company sees an impact on revenues.
The costs are so prohibitive that failure to generate such high results could prove to be a drastic setback. And Trahan can’t be sure if his sales estimates are realistic or overly optimistic.
“$3 million a year is more than double his current total revenues, which have taken him 8 years to build,” says Jim Stewart, founder of Toronto-based business strategy firm ProfitPATH.
And finding investment is a challenge, especially if Trahan decides to shift his business model.
“Shifting from B2B to B2C is big step for any company,” says Stewart, adding that Trahan “will struggle to attract investment (without a) clear growth path.”
Trahan, for his part, remains undecided.
“If (either option) doesn’t work, it’s a really tough pill to swallow,” he says, but “sometimes you just need to pick a direction and move forward.”
Then he says, he has one question to ask.
“If you miss, do you have enough reserves to try again?”