Education and training businesses, particularly Registered Training Organisations (RTOs) and vocational providers, play a crucial role in building skills, careers and communities.
You know the space well:
- Government funding cycles
- Compliance frameworks (ASQA, NZQA, etc.)
- Industry-aligned delivery models
- Trusted trainers and admin staff who keep things moving
But here’s the problem:
While you’ve trained everyone else for what’s next — you haven’t trained anyone to take over from you.
In Australia and New Zealand, many training organisations were founded 10–20 years ago, often by education entrepreneurs, tradespeople, or passionate professionals.
Now, those founders are approaching retirement, grappling with burnout, or simply ready for something new — but the succession plan doesn’t exist.
Compliance is complex. Student delivery is dependent. And few founders feel confident that someone else could “run it properly.”
That’s where Employee-Led Buyouts (ELBOs) or Management Buyouts (MBOs) offer a powerful, practical path forward.
The Unique Succession Challenges for RTOs and Training Providers
RTOs and training businesses aren’t like other service firms. They face a unique mix of:
- People-dependence
- Regulatory oversight
- Contractual and funding complexity
- High trust with learners and industry partners
And that makes selling — or stepping back — difficult.
1. Compliance is Heavy and Personal
In many RTOs, the founder is still the Responsible Person with ASQA (or NZQA), and often holds the knowledge for audits, assessments, and funding rules.
2. Founders Still Wear Too Many Hats
You might be the Director, the Business Development Lead, the audit response writer, the trainer of last resort — and the person who unlocks the building.
3. Staff Are Capable — But Don’t See a Path
You have great trainers, student support staff, or admin leads — but they’ve never been shown how to lead or own the business.
4. External Sales Are Risky
Selling to a private buyer or national chain may bring payout — but often leads to cultural change, staff loss, and diminished learner experience.
Why Internal Succession Works in Training & Education
ELBOs and MBOs allow you to transfer ownership to the people who already understand your systems, values and delivery — without selling out your vision.
Here’s why they’re a great fit:
1. Staff Know the Learners, Systems and Standards
They’ve already mastered funding rules, unit packaging, session planning, and compliance cycles.
2. Stable Cash Flow via Contracts or Courses
Government-funded programs, employer-paid courses, and repeat intakes create steady revenue — ideal for vendor-financed exits.
3. Trust = Retention
Staff and students often stay because of the culture. Internal transitions preserve the rhythm and relationships that matter.
4. Purpose-Driven Leadership
Emerging leaders in education are often values-led — which means they care about more than just profit. Give them a pathway, and they’ll stay to lead.
What Is an ELBO — and How Does It Work?
An Employee-Led Buyout (ELBO) is a structured succession plan that allows you, the founder, to exit gradually by transferring ownership to internal team members.
Typical ELBO Components:
- Vendor finance — You’re paid over time using profits from the business
- Employee share schemes or discretionary trusts — To enable buy-in without requiring upfront capital
- Leadership coaching — To support your team as they grow from operators to owners
- Governance and compliance transition planning — So regulatory and audit continuity is protected
- 100-day plans and dashboards — To align the new leadership team and sustain delivery
Key takeaway: Your team doesn’t need personal wealth — they need a clear, supported plan.
Real Case Snapshot (Anonymised – Australia)
Business: Multi-site RTO delivering qualifications in community services and aged care
Revenue: ~$4.5M
Team: 18 staff across admin, delivery, and student support
Challenge: Founder nearing retirement, responsible for compliance, funding negotiations and leadership. Three senior staff had been in the business for 7–10 years but had no equity or succession path.
Solution:
- Structured MBO with 3 senior leaders (Academic Manager, Ops Lead, Compliance Officer)
- Vendor finance over 5 years
- Transitioned Responsible Person status to a new Director with coaching
- Implemented board and monthly reporting structure
Outcome:
- ASQA re-registration passed post-transition
- Staff retention remained above 90%
- Founder exited after 30 months with full payout achieved
Source: Blue Harbour Capital engagement (anonymised)
Why Founders in Education Are Choosing ELBOs
“I want to retire — but I don’t want the business to collapse without me.”
Internal succession keeps learners and staff on track.
“My team already knows how to run it — they just don’t know how to buy it.”
We help design the deal and coach them into ownership.
“I don’t want to sell to a chain and see it become unrecognisable.”
ELBOs preserve your brand, model and mission.
“I need a real exit — but I want to leave it in good hands.”
You can step back gradually while protecting value and purpose.
How Blue Harbour Capital Supports RTO and Training Transitions
We help training providers and education founders:
- Structure internal buyouts using vendor finance and equity-sharing models
- Coach internal leaders into confident, compliant business owners
- Build post-deal governance, planning and performance monitoring
- Maintain funding, regulatory and licensing continuity
- Create a succession roadmap that aligns with your personal, financial and legacy goals
We don’t buy training businesses.
We help you hand them over — successfully and sustainably.
Five Steps to Start Your Succession Plan
- Clarify your ideal exit timeline
- Do you want to retire fully? Step back gradually?
- Map your internal leadership team
- Who’s already delivering, managing and leading?
- Get a business valuation
- Including funding mix, learner outcomes, staffing model and compliance readiness
- Explore structuring options
- Vendor finance, share trusts, hybrid ownership, governance
- Plan the transition
- Regulatory handover, staff engagement, learner continuity, leadership coaching
Let’s Talk Succession in Education & Training
You’ve built a business that changes lives.
Now it’s time to design the next chapter — for your learners, your team, and yourself.
Reach out to Blue Harbour Capital for a confidential succession conversation.
We help education founders exit with clarity, purpose — and confidence in the team that takes over.