How to Launch an RTO

Welcome to the RTO Superhero podcast with me Angela Connell Richards. Each week we break down the standards for RTO's 2025 and turn them into clear actions you can use. You get real examples, compliance tips and straight answers for running a quality RTO. Let's get started. So, you've decided to launch an RTO. This is a big journey to go on when you decide you want to start an RTO. And for those that are on podcast today who have been in the training industry for a while, you know how difficult it can be to maintain your ongoing compliance. Things have certainly changed a lot within the training industry with what are the requirements for setting up an RTO. And if you're even thinking about buying an RTO, the amount of work that is involved is about the same as setting up a new RTO. And we'll be covering that today in the podcast. So let's begin with what is an RTO. A registered training organisation can deliver nationally recognised training around Australia. They can issue certificates that are recognised across most countries around the world. And you'll have the ability to be able to apply for government funding and training ships following 12 months of registration. You also have the opportunity to be able to meet industry needs and what are specifically are their needs within industry. You may also be interested in delivering training to international students. And that is where international students come into Australia and you're delivering training for them to then take back to their home country. This would be a cry-cost provider. So Commonwealth Register of Institutions and Courses for Overseas Students. The provider is responsible for reporting student attendance and academic monitoring to the Department of Human Affairs. With RTO registration, you can also offer nationally recognised training qualifications. There are some additional registration requirements for LACOS courses if you decide you would like to deliver English language courses as well. So who is the Red Guestree body? The Red Guestree body is ASCWA, the Australian skills quality authority. They have strict requirements for submitting your application to the government. ASCWA are responsible for auditing your organisation's prior to gaining registration. And an authorised auditor from ASCWA is responsible for auditing your organisation. Or what now is called assessing your organisation so they conduct an assessment. To find out more about ASCWA, go to ascwa.gov.au. So the process for applying for registration with ASCWA is quite extensive. ASCWA determining your capacity to deliver quality education. You need to ensure that you are ready to commence training with all the required resources at the time of submitting your application. There cannot be changes following submission. This includes your location, trainers and training products. When you apply for initial registration, you need to demonstrate financial viability and also conduct a self-assessment of your capacity to become a registered provider. So what this means for you is you need to ensure that you are complying with the vocational education and training framework. So this includes the standards for registered training organisations, the Australian qualifications framework, fit and proper person requirements, financial viability risk assessment and data provision requirements. And if you are going for a Christchurch registration, you also need to comply with the Education Services for Overseas Act, ESOS Act and the associated legislation under the ESOS framework. And this also includes the National Code of Practice for Providers of Education and Training to Overseas students. There are a range of ASCWA forms that need to be completed as well. This includes a fit and proper person form, which is a form to identify every senior person within the organisation is able to demonstrate that they are a fit and proper person to be able to operate an RTO. And this includes whether you have any family members who may have worked or owned an RTO in the past, so they want to check all of your background when it comes to ASCWA. The CEO is required to sign a statutory declaration declaring that they will be responsible for all of the compliance within the organisation. You are also required to complete a financial viability kit demonstrating how you will meet the capacity to deliver training and assessment. And you will also be required to complete a self-assessment tool to demonstrate your preparedness for registration, very similar to an internal audit. The documentation that you need to submit with your application includes a strategic business plan, a profit and loss prediction, training and assessment strategies for each training product you wish to add onto your scope, training and assessment tools, staff matrix, policies and procedures and your marketing material. So as you can see, there is quite a lot of documents that you'll need to have in place prior to your submission to ASCWA. Popular to believe there is a big area where a lot of people don't understand all of the requirements of the documents that you need to submit. There is quite a few and there's also a self-assessment that includes a checklist that you have everything in place for your submission. There are additional requirements for CRICOS and this is you've got to have a 9B building approval for the building that you wish to deliver. You need to provide a building floor plan, have a timetable for your CRICOS register, include an international student prospectus that outlines who you are, what you do and all of the training products that you wish to deliver. You need to have a letter of offer, template, student support services in place and if you are putting Ellicos on your scope, you need to also have an academic manager. We often get, "Should I become an RTO or expand into CRICOS?" What is the market like right now and what should I do? Well, this will all depend on your current circumstances. Are you in business right now? Do you need to have training background? Are you currently delivering non-accredited training for an RTO or are you an RTO right now? If you are delivering non-accredited training, you really need to identify does your industry require to have nationally recognised qualifications? Because there's no point in becoming an RTO if it's not a requirement of your industry. You really need to go to your industry and ask them. Do you have access to an international training market? If you are thinking about becoming a CRICOS provider, do you have access to that market now? If you are in business now, it might be that you're offering a service in consultation. Do you really need to add an RTO or training arm to your business? How will it work with your organisation that you currently have? Another question that we get asked quite a bit is whether I should buy an RTO and is it worth the risk? The big thing is with buying an RTO is it's just about the same amount of work as it is to set up an RTO from scratch. When you buy an RTO, there is a process that you need to go through for change of ownership. As an RTO and if you are a CRICOS provider, you are not permitted to transfer your registration from one legal entity to another. However, where a change of company share holdings occurs but the ABN and ACN or the entity registered with Asquare does not change, then the provider may continue as long as they notify Asquare with the change of ownership. Asquare refers to this event as a change of ownership. Change of ownership is where Asquare actually considers is a significant risk to the organisation. The change involves the same process as initial registration as I discussed earlier. Asquare considers change of ownership as the purchaser avoiding the scrutiny applied to initial applications. Changes to company share holdings of 50% or more are considered a significant risk. Asquare has applied additional scrutiny when notified of significant changes of ownership and in the 12 months after the change of ownership, this scrutiny is applied to ensure providers are appropriately prepared to deliver courses. continue to be resource to deliver. quality training outcomes and comply with the regulatory requirements. And this includes the requirements of fit and proper person requirements. The process for change of ownership includes that both the current CEO and the future CEO are required to notify ASCWA of their change of ownership within 90 calendar days. This includes the completion of a fit and proper person form for changes of 15% or more of change of ownership with shares. The new owner will be subject to a self-assessment and a compliance assessment. If there is more than 50% of a change in ownership within the first 12 months, the new owners will be required to complete a financial viability risk assessment. They'll also need be required to complete Section A of the self-assessment tool for change of ownership. This must be included with your supporting evidence detailed in the tool. There are two versions of this tool, a standard version and a version for Alicos providers, so you'll need to check these out. Where there is a 100% change of ownership within a 12 month period, the training provider or their parent entity, ultimately the owner, has a change of ownership with 100% of the share holdings over a 12 month period. Both Section A and B of the appropriate assessment tool for change of ownership must be completed and submitted to ASCWA if provided, if the provider has either no ongoing students or not had more than 10 students complete a course within the last 12 months of registration. The first response to change of ownership once they're notified and they receive that notification that there is going to be a change of ownership, you'll be required to do the following. There will be a compliance assessment whereby you'll be required to provide evidence of compliance with the regulatory framework. Self-assessment tool for change of ownership. You'll need to focus on whether the new owner has sufficient resources in place. New of your RTO to determine there is sufficient support for students. If non-compliant regulatory action may be taken, and we have heard of a number of cases where RTOs, where someone has taken over an RTO and then they lost the whole registration. You've got to be really careful with this. This increased scrutiny is for the first 12 months and it applies to all changes in registration within that first 12 months. This includes an addition to scope. The risks of buying an RTO, it is not quicker than setting up an RTO. You need to complete the whole process of change of ownership to be deemed critically non-compliant. The RTO registration may be cancelled due to not meeting ASQUER compliance requirements. You may lose a lot of time through the whole process and may have to begin again. You may also waste a lot of money by buying the RTO and perhaps hiring the wrong consultant to rectify non-compliances, which could you may end up with no RTO in the end. The worst part is you may end up with a record with ASQUER, which will increase your risk if you decide to set up another RTO down the track. What's the difference between buying and setting up your own RTO? Buying an RTO takes longer to buy an RTO because you've got to go through this whole process. We'll be required to go through the same process as an initial registration. You put a cancellation of the registration, waste time and money, or new owners are audited and may need to add more qualifications. Whereas if you're registering your own RTO, there is a lower risk to four non-compliances. You learn along the way the importance of compliance and there are no hidden surprises or skeletons in the closet because you know what has happened throughout the whole process of the RTO. You also get to choose the training products that you wish to place onto your scope. When we're working with initial registration clients, the first thing that we focus on is begin with the end in mind. You may already have a company set up or you may want to set up a new entity. RTOs can be registered under a range of structures including a proprietary limited, sole trader, trust, public or privately listed. But from our experience and for the best structure, we recommend a proprietary limited structure. This could be under a trust, so it might be that you currently have another company and you want to set up an RTO and have it as a separate entity. You could run this under a trust structure. Who should you have in your RTO? We've helped many RTOs who are me and myself and I RTOs, so it might be just you running the organization. You don't need to have a whole team to set up an RTO, but you do need to have someone with a range of experience in the training industry to help you through the whole process. As a Cricos provider, you will also be required to have an academic manager and a student support officer. And of course, you're going to need trainers and assessors who are going to be able to deliver the training products that you add onto your scope of registration. So how long does it take to set up an RTO? According to ASCORE, it can be anywhere between 12 and 18 months and it just depends on where ASCORE is at the time. Our process is for submitting an RTO application can be anywhere between three to six months. Our process for Cricos can be a bit longer, so it may be six to 12 months, but it depends on the time frame and how much you can commit to the process before the submission. We often get asked, do I need to have an expert or be an expert in the training industry to set up an RTO? You'll need to have a good understanding of your organisation and the training industry before going to audit. You'll also need to have policies, procedures, forms and documentation in place to meet the government requirements and all the legislative requirements. We recommend that you hire qualified and experienced trainers who have a minimum of three years industry experience. CEO and directors do not need to have any experience within the training industry, but they should have at least some experience as in business so that they're able to be successful with running their RTO. Another question we often get asked is, estimate a startup cost for starting your RTO. So there are a number of fees that you need to consider when you're starting your RTO. There are ask for fees and for an RTO is $8,800 and for CryCos, it's $9,900. But you're also required to pay fees for the audit process and that can be any amount and that is really dependent on how big is your scope of registration, how many training products you're putting on your scope and what the whole process of that audit process are your charged audit fees. With registration and setup, we recommend that you need to have a minimum of $75,000 for an RTO and for CryCos, you're going to need a minimum of $100,000. This is to cover all of your training and assessment tools, your student management system, training rooms that you may need to hire or have permanently in place and any staff that you need to have in place as well. The way we find others fail is they're very limited in the understanding of what to expect at an ASCRA audit. They don't have sufficient training and assessment strategies in place. They don't have delivery and assessment plans to demonstrate how they're going to have the capacity to deliver the training. The trainers and assessors do not have sufficient skills or knowledge and they're not able to demonstrate this through their trainer's matrix. The assessment tools do not meet the training product requirements. You do not have the capacity to deliver what they included within your financial viability and business plan. Don't have policies and procedures and documentation that meet all the compliance requirements and the training facilities do not meet the training product requirements or you don't hire the right team in the first place. The risks of setting up without expertise can be big to you and your organization. This can be personally and also business. This includes loss of money, missing crucial documents at audit, not being properly prepared for your ASCRA audit, wasting a whole heap of time, stress can be financial and emotional, being overwhelmed with ASCRA requirements and end up being imposed with a sanction. So what happens if you are non-compliant? School provides an assessment report following the assessment. Asquire no longer has rectification and reconsideration processes, so you need to get it right the first time. If it's a minor risk, you'll be provided with a recommendation for rectifications that you can undertake in the future. But if it's a critical risk, your application may be rejected and you'll be given the option to apply it again. So if you really want to solve your Asquire audit risk and you really want to get your RTO kick started, we really recommend that you hire a team of experts, people that have a good understanding of the RTO requirements and the legislative requirements. You could navigate registering your RTO on your own, but the risk that you have there is you need to work out how to prepare your RTO for initial registration on your own, identify the best training products to put on your scope to get the best results, you need to identify what you think will be compliant or non-compliant within your application, and you take the risk of going to an Asquire audit on your own. You may waste time and money and discover your non-compliant and did not meet the registration requirements and spend money to fix the RTO following your Asquire audit and end up getting overwhelmed and stressed. The real cost to this is losing that time and money, losing focus on what is your real goal and getting rejected by Asquire. You may even end up in tribunal spending more money or another consultant to fix your non-compliance. Where is if you hired an expert and someone who actually really knows what they're doing with over 30 years of experience in the training industry and experience with compliance requirements and Asquire audits and has proven systems and practices within their organisation, you're going to have a lot more success rate when you get to audit. One of the things that we do at Vavacity is we make sure that we not only consult you through the process to gain your registration, we also coach you on the business side of running your RTO. We have weekly masterminds where we're coaching you and keeping you accountable on how to grow your business. We provide online training, webinars, one-on-one coaching. We also have over 30 years of experience in the training industry. We have extensive experience in writing policies, procedures and documentation to meet the compliance requirements, which is going to be crucial moving into the future because the standards are set to change. We are undergoing a vet reform at the moment and all of the legislation will be changed. Some of the things that you need to be aware of when you're hiring a RTO consultant is to make sure that there are no hidden fees. This is one thing we're proud of at Vavacity. We are transparent when it comes to our fees and your expenses are genuinely what we want to do is to save you money. When we work with our clients, we provide you with training and expert support. We click calls from our client liaison officer, monthly webinars on how to implement the policies and procedures within your organisation. We also prepare you for your ASCOR order. We have a range of online courses that we offer that also guides you and coaches you through the whole process. I implore you, if you are looking at setting up an RTO that you get an expert on your side, someone that can help you that has a systematic approach to gaining your registration, including industry recognised leader on your side and expertise in the industry to get you through quicker. Quicker. We can get you started straight away, but you need to really look at who is the ideal consultant for you, who's going to be your dream team when it comes to setting up an RTO. Do they have the experience? Do they have the knowledge? Do they have the connections where they can connect you with other suppliers within the industry? That is my how to launch an RTO. There is a lot of processes in there that you need to have in place, including making sure that you have all of the policies, procedures, forms and documentation. You need to have a strategic business plan, a training and assessment strategy for each training product you wish to have on your scope, and you need to be able to meet all of the financial viability risk assessment requirements and assistance with submitting your ASQUA application online. If you'd like to know more about how the VASITY can help you, you can go to VASITY, www.vavacyty.com.au to learn more about how VASITY can help you. I hope you enjoyed this podcast, and I'll look forward to catching up with you again soon. Thanks for joining me on the RTO Superhero podcast. Use today's insights to strengthen your systems and lift the quality of your delivery. Subscribe, share the episode and keep building a strong and accountable RTO. See you next time. [BLANK_AUDIO]