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Break-Even-Analysis---E-Learning-(elearning)-Guru-100s-of-

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					Break-Even Analysis
Step 1: Step 2: Step 3: Step 4:
Total Costs for Development of e-Learning Total Costs for Development of Classroom Trng Total Cost per Student for e-learning delivery Total Cost per Student for classroom delivery

$ $ $ $

350,000.00 59,560.00 168.00 1,284.00 260

Break even will be achieved with student #

When is this formula used? Many e-learning initiatives have large initial costs (to develop the training, to buy the titles, or to install the LMS), but over time they will "save" an organization money when compared to other delivery options (e.g., typically classroom-based training). Break-even Analysis looks at the relationship between fixed costs, variable costs, and returns, and will tell you exactly when the project will begin to save money. In other words, if you have a break-even of 245, that means for students number 1 - 244 the cheaper solution would be the classroom-based one. You break even on student number 245, and then with students 246 and beyond the initiative actually begins to "save" money.

How do I use this calculator? Just type your data into the yellow-highlighted boxes above and the Break Even Number will be calculated for you. How do I calculate these costs? For Step 1, estimate e-learning development costs by adding up development of course (e.g, design, script, programming, artwork, license fees, hosting, etc.). For Step 2, estiate classroom-based training costs by adding development of leaders guide, participant manual and perhaps any train-the-trainer sessions. For Steps 3 and 4, calculate delivery costs by adding up any instructor burdened salaries, travel expenses, student salaries, and/or opportunity costs, and student travel. Often elearning solutions will yield huge savings from a reduction in travel, and if total learner time is reduced, you will see a lower salary or opportunity cost. For Steps 3 and 4, first figure the total investment and then divide by number of students to get your per student values.


				
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