5 LMS Budgeting Mistakes SMBs Often Make When Implementing A New System

5 Budgeting Mistakes SMBs Often Make When Implementing A New LMS
Summary: When you’re planning to invest in LMS, the budget is a primary factor. But which particular expenses should you have in mind? In this post, I highlight budgeting mistakes that SMBs often make when implementing a new learning management system.

Common New LMS Budgeting Mistakes Of SMBs

With any type of software or digital product, there are ‘hidden costs’ that frequently get lost in the mess. They include things like hosting fees, hardware, and on-boarding. They might also include transport (self-hosted servers are bulky and will need to be delivered and installed). Certain features may not be included in the basic package and will, therefore, have to be paid for separately. What are some other bits of the LMS budgeting that may have slipped your mind? And are there any cost factors that SMBs, in particular, must consider when implementing a new system?

5 Mistakes To Avoid When Creating Your LMS Budget

1. Underestimating Active Users

The average LMS has a per-user payment package. You’ll probably pay X amount for up to Y number of users. If you add anyone above the cap, you pay an extra fee for every new user. But if your user-base goes below the cap, you continue to pay the base fee. This can end up getting unnecessarily expensive, so be sure about the number of staff who will consistently use the LMS. Occasional users can share a guest account to avoid extra billing. And if your user-base goes too far below the cap, consider a smaller, more affordable package with a lower user limit. Also, verify the vendor’s definition of ‘user.’ Some might count everyone who creates an account, while others only tally those who are active.

2. Opting For The Lowest Price

In supermarkets and retail stores, you’ll often find three items in a given range. One is priced super high, while the other’s cost is ridiculously low. Then there’s a median price point, which is what most people opt for. They don’t realize this strategy is deliberate. That ‘median’ item was purposely positioned to offer the best profit margin of all three products. In the software space, this principle plays out a bit differently. One of the most common LMS budgeting mistakes is solely considering the price point. The people who make financial decisions aren’t always technically knowledgeable, so they’ll buy the cheapest LMS. Often without consulting IT, HR, or L&D. As a result, they might buy something inadequate. Then they’ll end up spending more on plug-ins, supplementary products, or an entirely new rapid authoring tool. You must consider all upkeep costs to ensure you get the best value for money, even the ones that are related to platform development. Also, factor in LMS implementation times, the learning curve, and payroll hours.

3. Not Being Clear On Why You Want It

Another risky habit is to follow trends. You may purchase the LMS just because everyone else has one. Peer pressure may even influence which LMS brand you buy. But if you don’t know the ‘why’, you’re throwing money away. For example, you might invest in a certification LMS when your staff doesn’t need documentation. Or you may get LMS with hi-tech simulation tools for a workforce that’s barely computer literate. And completely uninterested in digital gaming. Maybe you have picked one with a superior authoring tool but no features for payroll, asset tracking, time sheets, or automated reporting. In all these cases, you’ve wasted money and time. Survey your team to get their feedback and identify their needs. That way, you can craft your LMS budget more accurately and choose an LMS for SMBs that actually lives up to expectations, without going overboard.

4. Overlooking The Cost Of Non-Compliance

One of the most common questions in personality tests is ‘How do you feel about deadlines?’ Some people have intense levels of anxiety and panic attacks. Others think deadlines are arbitrary. This can be risky for corporate compliance matters. The former attitude could have you spending a ridiculous amount on an LMS for SMBs, to ensure you get your compliance certification in time. The latter may ignore purchasing the compliance content until the last possible minute. In the former case, the cost of the LMS may surpass the cost of non-compliance penalties. In the latter, you could end up paying thousands of dollars in fines. So, before you pull out your credit card, do a cost-benefit-time analysis and make your decision based on that.

5. Forgetting To Factor In Compatibility

LMS probably isn’t the first piece of software you’ll buy. (Unless of course you’re a new, digi-savvy business, in which case it’s definitely the first thing you’ll buy.) Ordinarily, you already have some kind of system for payroll, timesheets, customer care, and invoicing. Modern LMS can cover all the above (plus training) on a single platform, but if you do have distinct software, you need to be sure your training purchase is compatible with existing systems. That includes authoring tools and CRM platforms. Otherwise, you’ll end up tossing everything out and spending even more money to replace it.


Creating an LMS budget you can stick to is a delicate balance that has very little to do with the list price. There are lots of other matters to consider before you finalize that payment. You want to be sure you get the best value for your price point, and that you don’t get saddled with added costs. Confirm how many consistent users the LMS will have, don’t just run to the cheapest product. Instead, know what you’re buying this LMS for, because that’ll influence the features you look for – and pay for. Get a clear cost of non-compliance (fines plus recovery), and ensure your new purchase is compatible with existing software. You could also calculate whether it’s more sensible to replace them all with a single, streamlined, sensibly priced, multifunctional platform.

Finding the right LMS doesn’t have to be a resource-draining ordeal. Use our online directory to evaluate all the options and stretch your LMS budget. Select your must-have features, ideal pricing model, and use case to simplify the process.