Marcus Sellen

Marcus Sellen, founder and CEO of vocational training and English language business the Selmar Institute of Education, explains what Gen Y are looking for – and it’s not just money.

 Sellen, who founded the company seven years ago, says revenue has reached a record $13 million and full-time staff numbers have doubled to 120 as corporate demand holds up nicely.

Sellen, who owns about half of the business after selling down four years ago, adds that registered training organisations are ripe for consolidation, but Selmar is yet to receive an offer after the takeover of rival Franklyn Scholar by Kaplan Australia.

First off, could you give me a run through of how your business is tracking?

We had a very successful year last year, so had over 100% sales growth again and have increased our student numbers significantly. Our base staff number has increased by 100%; at the moment we are at about 120 full-time staff.

How old is the business?

Seven years old.

How much revenue?

We went over $13 million.

Is that a record for you?

Absolutely. We ended last year at about six, six and a half, so we have doubled our revenue.

Beautiful. How did you make it happen?

Being very focused in our markets, making sure we have a target strategy on how we are going to acquire clients and ensuring the product offering to our students is the best in our market space.

But what is the market like at the moment? Are you seeing any signs of softness?

I certainly haven’t experienced any softness, but I do think that the market is becoming far more quality-driven, so they are looking for good-quality programs where students can get employment outcomes.

Where you are partnering with a corporate organisation to deliver their in-house training, they are looking for a lot better quality than there was in the past, so the importance of quality is becoming greater.

I think they are the two main drivers – it comes down to quality at the moment. People are looking for strategic alliances with employers; students if they are a job seeker or a high school graduate can look at doing a vocational course and getting into some paid employment.

Who are your main competitors then?

Well, in Victoria Franklyn Scholar is a main competitor of ours.

They’ve had a bit of activity in the past few months.

Yes, they have very recently been bought out by Kaplan.

Does the Franklyn Scholar deal, making it the largest registered training organisation in Australia, pose a challenge to you? And do you see consolidation as the way of the future?

I think that all of the people with a voice in our industry are stating that the industry is too large and that it needs to shrink down in size to have larger corporatised organisations.

We met with some consultants last Friday to do some market analysis and he said that we would be one of the first RTOs [registered training organisation] that he has come across asking for this level of information in either the professional consulting or educational industry. We have governance and advisory boards that we report to, but he doesn’t see that in our industry.

Is that because they feel their size doesn’t justify that information?

A lot of them are mum and dad operators that have a very good product to sell that is their own skill-set that they are delivering, and so they really are SMEs with a handful of staff.

Have you had any interest?

We haven’t had any interest, no. I haven’t pursued anything.

Would you want to sell?

Don’t know, don’t know if I want people to know if I want to sell or not. Look, I suppose they say for the right price anybody would sell, wouldn’t they.

We haven’t had any offers and we haven’t been exploring that space yet. We are probably about two or three years behind where we want to be with regards to any acquisition.

Where would you like to be?

Probably looking at getting into interstate work. At the moment about 95% of our business is in Victoria and we are doing very well but we are looking at expanding into the other major capital cities across Australia.

Are there difficulties in expanding interstate with regards to rules and regulations?

Yeah, there are. There are different requirements in every state, sometimes they have individual jurisdictions. It is a sometimes complex task to navigate your way through the different states’ rules, but at the end of the day the training is still the same, the qualifications are the same, the students’ expectations are the pretty much same. You’d think it would be easy but it’s not.

I can imagine. I remember speaking to Franklyn at the time of the Kaplan sale and they said registered training is still very much a cottage industry, and state-by-state there are nuances.

Absolutely. We’ve mastered Victoria, we are probably second in Victoria to Franklyn Scholar with regards to volume of students. Our plan now is to identify how we would grow presence interstate, and we are looking at whether we do merger and acquisitions with existing providers who have built up a similar reputation to what we have.

At this stage we are 100% organically grown. We haven’t made any acquisitions to get to our current position.