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How Much Does It Cost to Develop an Online Course?

| December 12, 2019 | 11 min read
Learning

Whether it’s worth to create a course or not is a question that many people so eagerly want to get an answer to. But, how much would it cost? And, is it profitable?

The short answer is “YES it can be quite profitable!” The long answer requires a more in-depth analysis.

Creating and selling online courses is a highly profitable business with the potential to open up a passive stream of income.

But, how much does it cost to create one?

Knowing all about the course creation and development costs upfront can help you come up with the right plan to create a course, and deciding on the best price tag for your courses.

This article attempts to make out an estimation on the cost of the course development process taking into account all the categories of costs that go into it. These categories are:

Ready to dive in? Let’s go!

Category 1: Course Creation Costs

There are many factors to consider when creating an online course. The costs that are associated with it depend on:

Course complexity – Which course materials and equipment will you use?

Each course uses different multimedia elements that determine how engaging the course is. It could be text, graphics, animation, video, audio or more enhancing tools. Some courses may require fundamental knowledge in their creation but some others are more complex and time-consuming.

Length of the course – How many hours of work are you investing in it?

There are all sorts of types of courses e.g. mini-courses, masterclasses, MOOCs amongst others. The longer the course is the more content you will need to create for it. This also means, the more time you will need to spend on it.

Course creator – Are you creating the content yourself or hiring a professional?

If you are hiring other people to help you out e.g. instructional designer, SME – subject matter expert, web or graphic designer, videographer, marketer, or translator for your courses, you should expect higher costs in all areas of course development.

Course Materials

When choosing what type of content and course materials to use in your course, you have to think about the following:

Answering these questions should help to determine if your learners will be able to comprehend or work through them based on their learning pace and technological capabilities.

Online courses fall into different levels depending on their interactivity and complexity. The higher the level of interactivity (in the learners’ use) and complexity (in content creation) is, the more expensive a course tends to be.

Now let’s see how the different levels of interactivity work out as described by Christopher Papas at eLearning Industry.com:

Level 1 – No interaction: Passive eLearning interactivity

A course which uses PowerPoint presentations, simple video, audio, graphics and quizzes of True-False or multiple-choice test questions. It focuses on delivering information in a classic text and image design that makes no use of interactive games or simulation.

Level 2 – Limited participation: Limited eLearning interactivity

A course that makes use of animation, audio narration, basic drag and drop functions, and more interactive media. It blends theory and practice in an attempt to instill motivation.

Level 3 – Moderate interaction: Moderate eLearning interactivity

A course that includes various video types, different forms of audio, simulations, complex drag and drop functions, detailed branched scenarios that provide a more personalized learning experience. It is less theory-focused and more practical.

Level 4 – Full immersion: Full eLearning interactivity

A course that encourages learners to interact fully and give feedback. It makes use of serious games, avatars, simulated job performance exercises, customized audio and video, stories, scenarios. It includes high-end interactive elements that are complex, more expensive and need more time to develop.

When planning your course choose your materials wisely so that they respond well to your learners’ needs and abilities.

Also, decide how interactive you want it to be. Some platforms including LearnWorlds comes with interactive features like interactive ebooks or interactive videos, assignments, polls, etc. that can help you create highly interactive courses, without spending a lot in developing and editing before-hand.

Content Creation

The cost of creating content for your course is time-relevant which means you have to think about how many hours you or the freelancer professional will need to work on it.

If you are hiring freelancers for the job, the cost formula is this:

(Hourly rate of Instructional Designer x no. of hours) + (hourly rate of Subject Matter Expert x no. of hours)
=
Cost of your online course

According to Salary.com, the average hourly rate for an instructional designer in the US is $36.

For a Subject Matter Expert (SME), this depends on the topic but an average hourly pay rate is $42 as listed on Salary.com, so we are using it as an indication for either hiring internally or a freelancer.

Costs may vary a lot depending on quality, experience and country of the professional you will hire:

estimating the cost of creating course content on a table with prices
*An estimation of the costs and the time needed to plan and create the course content.

As you would expect, the less time the instructional designer and SME spend on the project, the more money you save.

If you are doing it yourself, you reduce costs massively. For example, you can come up with good content and develop a course scenario while saving tons of money. Then, you can ask an instructional designer to review and edit your work.

You can do the same with more complex online learning material – videos, quizzes, puzzles, and assignments:

estimating the course of creating video course content on a table with prices
*An estimation of the costs and time needed to create video course content.

This table shows how you can create a video going through the different development stages.

Depending on how long the course, you can expect to go through the same process for creating puzzles, quizzes, assignments. But since these are often easier to create compared to a video, there can be a slight reduction in the development time and costs.

Additional costs might come up if you need to hire a professional cameraman to shoot the video footage. The higher quality of the video you wish to produce adds up on the costs quickly. You can avoid these costs and do most of the work yourself hiring people where you won’t be able to deliver.

Essential Equipment

A laptop and an internet connection is a necessity to create and sell online courses. Assuming that you have these covered, the next step is to search for multimedia software that can make your course development process easy and affordable.

If you are creating videos, screencasts, webinars, or podcasts, you will need to choose reliable video editing software e.g. Camtasia, Screen-O-Matic, Adobe Premiere Pro, etc. and buy a microphone, a video camera and a lighting kit that helps to create professional videos.

At LearnWorlds, we have come up with a list of elearning tools that can help you choose and compare equipment that is more suitable for you. It tells you how much each costs so that you can easily compare prices head-on.

On the list, you can find many different options whether you are working on a small or big budget.

Online Course Platform

The learning management system (LMS) that you are choosing has a huge role to play in your course development, so make sure you pick one that meets your most essential needs in terms of features.

You can get down to evaluating different LMSs, just make sure it won’t take too much of your time.

Read reviews and be prepared for it. Once you make your choice, start developing your school – build your landing page and upload your course:

Many course platforms make it easy to start an online school, set it up and prepare your pages and content. However, if you are not comfortable with even simple technical stuff and want to hire someone to prepare your school/academy, then this might come as an extra cost:

estimating the course of setting up an lms on a table with prices
*An estimation of the costs and time needed for each activity.

When choosing your LMS, check how much it charges for the subscription. If you already have a WordPress site for your company, choose an elearning platform that can connect with it.

With LearnWorlds, for example, you can connect your school on a subdomain and then use the WordPress SSO plugin for a seamless transition. Alternatively, there are many cheap plugins for a WordPress site like Sensei, Lifter LMS, WP Courseware, LearnDash or other WordPress plugins. When using those, you will also have to keep in mind other hosting, server and maintenance costs.

We do suggest LearnWorlds as an all-in-one solution, and you can try it for free from here.

Each platform you may choose has a different cost. As mentioned above, WordPress would include a fixed price + hosting, while cloud-hosted platforms come with a monthly/yearly payment.

For example, with LearnWorlds, you have three pricing options:

1) Starter – $29/month
2) Pro Trainer – $99/month
3) Learning Centre – $299/month

These levels come with different features in each level and you can have everything you need to start an online school with 299$ per year using the starter plan.

Category 2: Business Costs

Business costs are easy to overlook but that doesn’t mean they should. Quite the opposite; you should be on the lookout for less-obvious or hidden costs – for example, those found in your website hosting and customer/student support services.

Online businesses are never complete without a website and the more professional your website looks the better it is for your business. A good idea would be to start with finding the best domain name for your website.

Domain Name

Costs on registering a domain name for your business range from $10 per year up to $100, a thousand or a million depending on the type of domain name you choose. An old domain name is fine like good old wine, but it’s usually expensive, and there is always the option of registering a new one.

Need help? Check out this list of domain name hosts to choose the most suitable for you.

FYI, the hosting option you choose ties up with the course platform that you decide to work on. With LearnWorlds there are no additional hosting costs and you can build your school using the all-included features that come with your subscription.

Student Support

Your students’ support is essentially your customer service point. Have you thought about how you are going to handle student inquiries and which times are you going to be available to talk to them?

You have the option to offer on-call support and let them know beforehand what your working/login hours are so that you are ready to answer questions and give adequate feedback. Make sure to include the costs of this type of communication as well.

For example, if you are using Skype or Zoom, paid subscription prices start at $2,95 and $14,99 respectively. If you are not sure yet, this review from SoftwareAdvice on alternative video conferencing software offers a great deal of information to help you decide.

Also, how much time are you willing to dedicate to your students? This could be 2 hours a day if you have 100 students, or 1 hour if you have 50. Don’t forget, this works along with demand.

Additional Costs

Other business costs include legal, accounting or hiring costs.

Depending on the country or any other local laws you might need to follow, you might have a company (or freelancer) registration fee. Registration, tax and accounting might add up to your costs. If you are just starting out, you might be able to charge as a freelancer, but be sure to check on local legal requirements and consult a lawyer and/or accounting.

Also, are you planning to hire co-instructor or an assistant to help deliver your online learning webinars? If yes, you should consider this as an additional cost and adjust your business financial plan accordingly.

Category 3: Marketing Costs

Like it or not, you can’t ignore marketing. For online businesses, setting up a marketing strategy comes as a priority. Investing in SEO, ads, and promotion it’s huge in gaining public awareness and can bring huge revenue to your business.

All types of marketing are important to promote your online school, but it’s entirely your choice to invest in them or not.

Advertising, Paid Ads and Social Media Management (SMM)

Paid ads is a quick way to get traffic and your first visitors. You should be very careful when budgeting for advertising and include a limit in spent.

If you have done paid advertising before, then this is a quick way to get students to your course, or you can hire an agency. Agency or freelancer costs vary wildly on quality and budgets, but can start as low as $100 plus your advertising budget.

To start getting course participants who would ultimately want to become your students, you need to start building your audience.

And this is where social media comes in.

If you don’t have a big following on Facebook, which comes first in the list of the most popular social media channels on the web, consider investing in Facebook Ads to further promote your school.

Next, make sure to power up your YouTube, Instagram, LinkedIn, Twitter and Pinterest profiles and set up your advertising campaigns for as little as $1 per day for impressions. To get more information on advertising costs, visit WebFx that lists all the details for each platform and explains how they work.

Also, don’t forget; giving out useful information and advice through blogging can attract more people and encourage them to visit your school. Creating a blog is entirely free and comes as an add-on with your LearnWorlds school (Pro Trainer and up).

Agencies or freelancers can also help here too, managing your social media and the paid promotions there.

Email Marketing

Once you start getting a bigger audience, you will need to build an email list to help promote your courses.

Promoting your courses through email is super easy while using email marketing software. Their prices vary but the best are the ones that help you create personalized email content in the easiest and quickest way.

Before you make your choice, make sure to check how much they cost.

Affiliate Marketing

Affiliate marketing is another branch of marketing that is worth looking more into.

When you start getting affiliates you have zero upfront costs, and you just pay them a commission once they have referred you a paying customer – a student who has enrolled in your course.

With the LearnWorlds Affiliate Management tool which is integrated into your school (available on Pro Trainer or higher plan), the process is simplified to its purest form: affiliate registration, commission settings, management, and reporting are all under one roof – your online school.

This tool can save you from $39 up to $499 per month on using third-party affiliate management systems.

Then, you have to consider the affiliate commissions. Each affiliate will get paid a share of the sale. While you don’t pay in front for affiliate the same way you do on ads, costs here can pile up with partners taking a lion’s share of your earnings.

Podcasting

Have you ever thought about creating podcasts?

Podcasts are an excellent marketing tool since they can easily generate public awareness of your online course business and expand your target audience. The best part is that they are easy to create and don’t cost as much as you think.

To start creating podcasts, you will need a computer, a microphone, headphones, and a podcast hosting platform. Currently, there are many options on podcast hosts and their average prices range from $5 to $50.

For enhanced performance on podcasting, you can invest in the following equipment:

Either equipment you choose, you can find excellent options on podcast creation tools that best fit your needs and economic requirements.

Working on a small budget? No problem.

When creating your first online course, it’s not worth investing in expensive equipment. There are many ways to cut down expenses to the minimum and create low-cost elearning courses that still retain high-quality.

Here’s how…

The main idea here is to simplify your course which can include less complicated tech requirements that will reduce the costs of your course.

Do You Want to Develop Your Own Course?

This article has hopefully helped you go through the different course development phases and provided you with a template on how to calculate associated costs – including money and time, that you need to invest in creating a course.

Now, it’s your turn to decide whether you want to invest in and sell online courses.

With LearnWorlds, you can create and sell online courses easily and quick. Get started with a trial and see where it takes you!

Create a beautiful online school without any technical skills.
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Content Creator at

Kyriaki is a Content Creator for the LearnWorlds team with more than three years of experience in digital marketing. Graduated from the University of Huddersfield with a Guidance degree, she has equipped herself with hands-on experience in education management and career guidance.

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