Strategic Income Planning
By Angie Patrick
Strategic Income Planning
By Angie Patrick
Who doesn't enjoy a raise? A raise means someone acknowledges you and your efforts for another year of service. It means you have performed well at a certain level and now it is time to reward your efforts by raising your earnings a little. A raise is something we have all come to think of a synonymous with doing a good job and being rewarded for that good job in a monetary way by our employer. No, I do not believe anyone ever said, "What? A raise for me? No Thank You!"
But what if you are self-employed? What if "the boss" who so graciously divvies up raises happens to be the same person as the purchaser, the scheduler, the therapist, the marketer, the janitor and the chief bottle washer? How do you give yourself more money from a business you think you run like a tight ship, and a workload and that is at maximum capacity? You look for new ways, that's how. Money hides in the darndest places, and finding ways to eke out a couple more percent here can add up to a net pay raise overall for you. I want to look at a few places your money is hiding from you, and give you a few tips on how to coax it back into your pocket.
Preventing Client Churn
In most businesses, churn happens naturally for a variety of reasons. But sometimes, it is because of specific reasons and these may well be reasons you have control over. Before we can look at why customers leave, we need to first have a means to identify they have left.
Now, I understand many clients come for a specific issue and then once that issue is resolved, they stop coming. We all want to be known as the therapist who helped Jimmy with his frozen shoulder before his big golf game. But do we just accept Jimmy will not be returning because the issue has found resolution? When this happens, do you just allow them to go or do you offer other means to serve their needs and provide education to support this? I am sure you are familiar with the old adage, "An ounce of prevention is worth a pound of cure." These are clients that have experienced your talent and skill first hand, likely are candidates to continue to visit you to prevent issues. It takes education on the importance of prevention and the means to keep in contact with that client long after the initial issue has resolved. A client who knows you will likely return if they have received good service, been treated well, and have seen the value in what you provide. These same clients that are now better as a result of your care may well wish to remain under your preventative care to ward off future issues. This is a client you can count on, and can rebook. But if you just allow them to leave without providing alternatives, you have to work hard to find a replacement client.
When a client does make the decision to leave, do you ever learn why? Do you notice they are no longer booking with you? It is more common than you might believe to have a client slip through your hands unnoticed. Having a means to track client visits and reach out to them on a regular basis is important. Whether you do this through personal calling, a newsletter, or email; customer outreach is hugely important to a successful practice. Knowing when a client leaves as early as you can detect it, will give you the ability to call and check in with them and learn if they are in need of making an appointment or have moved on to other pastures. If they have moved on, I always think it is important to try and determine what prompted the decision to leave your practice. This conversation need not be confrontational, but more informational. Perhaps they had a bad experience, one for which you were wholly unaware. Learning about it and finding the root cause to prevent re-occurrence can save you future client departures for the same reasons.
The money and time spent keeping a client is far better spent than spinning through new client after new client that seldom return. I am not advocating fabricating reasons or issues that compel your client to return out of fear. I am advocating your taking a preventative stance, and sharing with them what you know to be true. Regular massage brings along with it many significant health benefits. Educating your client on the benefits of regular massage can help you keep your client happy and satisfied, and your booking calendar full.
Eliminate " No Show" Clients Early On
We all have them, those client that book a block of time, and then on the day of appointment they don't show up and you find yourself sitting on 60-90 minutes of booked time. This happens and is part of life, but working to nip this behavior in the bud is the best means of prevention. There are a few ways you can help alleviate this issue.
First, consider spending time the day before reaching out to your clients by phone to remind them of the appointment. Sometimes, this will enable you to learn ahead of time any challenges the client has come across in making the appointment allowing you time to rebook. Second, consider a " no-show" fee. If a client has booked with you and fails to show without contacting you in enough time to work to rebook the time, then a fee could be charged. Having explained this fee and the consequences up front can help eliminate this issue fully. No one wants to pay a fee, but additionally, no one wants to be "surprised" by one either. Clear guidelines need to be set up and discussed before a client books so they know what to expect.
Lastly, most people want to be respectful of your time, but will take any slack you allow them. Make sure you have clear guidelines as to when to show up for an appointment, and when the appointment is over, regardless of late arrival. If a client arrives late, still see them, but being clear that they have taken up their own appointment time in being late ahead of time makes for a less uncomfortable exchange and can help prevent lateness the next time.
Remember, your time is your money. When you allow your time to be wasted by clients who don't show, or are chronically late, it is you who pays for it. Think carefully about these issues and find a place of comfort you can live with and then inform the clients of your policies. They will work to adhere to your guidelines, and when they cannot, they know what to expect.
Supply Chain Management
As a therapist, you are a consumer of professional products, specifically related to the work you do. Have you ever considered how you purchase your goods as a means to add black ink to your bottom line? Having a strong understanding of your supply needs, timing, and consolidation of purchases, as well as how you choose to pay for them can save you money.
Let's say you are a therapist who orders just what is needed, just in time for the previous product to run out. You order weekly, or perhaps every other week, and order just enough to satisfy the needs of the next two weeks. This is called "Just In Time" ordering, and can work for many. However, if you take a step back, and look at your overall purchases for a three month period, you may be able to detect a specific pattern to your needs. Once you can determine what goods you will likely need for the coming quarter, consider buying these all at once. Look online for price breaks on your favorite brands, or freight incentives, and consider buying in bulk. You can save significantly by the gallon if you go from buying five individual gallons, to buying a five gallon pail. The savings are real and are important enough to take a longer look into what else you may be able to buy quarterly instead of bi-weekly.
Once you have determined that you may well be able to save not only money, but time when you place the planned quarterly order, you may want to consider how you pay for these goods. Many opt for paying cash or using a debit card. This is always good, and can give you real-time accounting of what money you have right now. But with a little forethought, you can structure these buys to provide you rebates, points or cash back on the goods you know you are going to need anyway. In my experience, I have seen successful businesses have a business-only charge card and they search for the ones providing the greatest loyalty benefit to the business. Maybe you prefer a percentage as cash back of purchases, or perhaps you would like to earn points towards a personal reward like that set of gourmet pots and pans you have always wanted. Using a card for these purchases, then paying the card off in full monthly, will help you take advantages of the benefits of using these cards and still alleviate the interest if paid in full each month.
Hire an Accountant
I know, it sounds scary, but believe me when I tell you, your accountant will always help you stay on the right path and help provide direction in a whole host of ways that ultimately save you money. This is the single best piece of advice you can be given in my opinion, and here is why: Do you know what education expenses are deductible? Do you have all the answers in regards to claiming a client gift or dinner, what is deductible and what is not? Do you know if you can claim attending conferences and what mileage can be claimed? How about association fees, or other business related forum fees? Most people don't have this committed to memory, and chances are this is not your center of focus either. Just as your clients hire a professional in your field to provide them with solid advice and care, you should do the same when it comes to your money and the care of your business.
When you hire an accountant, you can let them manage all the financial issues you may or may not have been doing correctly, thus allowing you to focus on building your business and retaining clients. They can worry about filing taxes, returns, exemptions, deductions, and all those things most of us find nebulous at best. An accountant is certainly handy to help you put accounting management tools in place so you can also have greater visibility to the overall financial health of your company. Obtaining the advice of this type of professional is a smart business decision and one that will save you from mis-steps and pitfalls often made when braving these endeavors on your own.
Ultimately, in order to save yourself the maximum amounts of time and money possible, you need to take a close look at your processes, how you do things, and seek ways to improve or streamline them. No doubt, when you take each part of the business management role you play and look to find sleeker more streamlined ways of management, you will not only save time but money, too. For most of us, these two things are one in the same. Any time or money saved can be spent doing things you enjoy, spending time with family, or even just reinvesting it into your business. Isn't this the same we would do with a raise from an employer? Take a weekend, and re-evaluate where you can streamline and consolidate, or improve processes like retaining clients and re-booking. Doing so now can net larger dividends for you in 2016!