How To Finish What You Start
The topic of this week's podcast is "how can we finish what we start".
Welcome to this episode of the Treat Your Business podcast. In today’s episode I’m going to ask you a big question.
The question is… “Are you being an ostrich when it comes to knowing your numbers in your business?”
We often bury our heads in the sand when it comes to knowing the numbers, and it’s hard to have the time. I hear all the time that people, business owners actually struggle to spend any time on their business, let alone thinking what their business is going to do moving forward or what their business is currently doing.
So with that in mind, the key points I’ll be covering in today’s episode:
The Treat Your Business podcast is sponsored by Jane. Jane is an all in one practice management software with helpful features like online booking, admin scheduling, integrated payment processing, and charting. But there’s more to Jane than you might think. The team at Jane cares a lot about the problems you face as a practitioner. One of those problems is the prevalence of no shows and late cancellations in practices.
So they’ve made it easy for you with a few simple tools built right into Jane. That includes the ability to implement an online booking payment policy, send out unlimited text and email reminders, and enable waitlist management features to fill those last minute gaps that were preventable.
Come and see Jane in action at Jane app. And if you know you’re ready to sign up, then you can mention the code Thrive1MO for a one month grace period on your new Jane account.
Book, chart, schedule, invoice, process payments, and run your whole practice online.
You’re listening to treat your business with Katie Bell, the podcast for health and wellness business owners that want and need to give their business the treatment plan it deserves and needs so that you can create more time back in your lives to give you the income you deserve and work hard for and to create more freedom and flexibility in your lives to enjoy the things you love to do. Whether you are a physiotherapist and osteopath, a sports therapist or maybe a Pilates studio owner, I’m determined to share with you bite sized episodes full of tried and tested tips from my own real experience of growing a successful physiotherapy and wellness clinic and from working with many businesses to do the same. So if you’re tuning in and feel like you’re on a hamster wheel of patients admin, life constantly juggling working and being with the family, and feel like you’re doing a rubbish job at both not making the income you thought you would by running a business and generally feeling overwhelmed with everything that you have to do, then keep listening. The treat your business podcast is sponsored by Jane. Jane is an all in one practice management software with helpful features like online booking, admin scheduling, integrated payment processing, and charting. But there’s more to Jane than you might think. The team at Jane cares a lot about the problems you face as a practitioner. One of those problems is the prevalence of no shows and late cancellations in practices. So they’ve made it easy for you with a few simple tools built right into Jane. That includes the ability to implement an online booking payment policy, send out unlimited text and email reminders, and enable waitlist management features to fill those last minute gaps that were preventable. Come and see Jane in action at Jane app. And if you know you’re ready to sign up, then you can mention the code Thrive one M O for a one month grace period on your new Jane accounts. Welcome to this episode of my podcast, I’m going to ask you a big question. First of all, and the question is, are you being an ostrich when it comes to knowing your numbers in your business, we often bury our heads in the sand. And it’s a it’s hard a to have the time. I hear all the time that people, business owners actually struggle to spend any time on their business, let alone thinking what their business is going to do moving forward or what their business is currently doing. So everything’s very reactive, we often get our profit and loss report. So we get our monthly tax return, but our yearly tax return back from the accountant. And it’s everything that’s happened. It’s al past data. So you can’t take any actions, you can’t do anything about it. It’s really hard to know what numbers you actually need to know in your business. Because you could there is 100 ways that you could analyse how your business is performing. But it’s making sure that when you spend time looking at this, you’re looking at it for the right reason, and you’re getting the right numbers back so that you can track your business performance. And then the third thing is really, really hard is to track them on a regular basis is not to just look at them once put them down and then look at them again, when you’ve got a bit more time or perhaps when you’re in a position where you need more money, or you need more cash because your business is not performing. And that makes it prompts you to look at the numbers. So in our last episode, we talked about getting really clear about what it is that you want in your life and in your business. And we’ve talked about personal values and an alignment of those values in previous episodes. And now I want you to start thinking about the money aspect of it. Okay, I want you to think that money is the results of achieving those things that you set out to achieve achieve those business goals, those, those personal goals. Money is there as a result of hitting what we chose to hit in our year ahead of business or in the month ahead. You want your business to deliver to you a personal income that allows you to go and experience travel freedom, flexibility, be able to take the kids to do certain things be able to have a monthly massage or see a personal trainer. We can’t ignore the fact that money and numbers have to have to drive our business because ultimately, ultimately, what else are you doing it for? I want you to really start to focus. If I want to make 100k 500k My business that’s okay, that’s an okay number to look at because you’re looking at the top line number you’re looking at sales revenue. In our in our industry, number of patients we’ve seen through the door, number of packages with solid number of Pilates classes we’ve taught, but I really want you to start to focus on the profit or you looking at your bank on a weekly daily basis as a gauge of how well you’re doing. Are you paying yourself what’s left At the end of the month, after all your bills have been covered, and all your expenses have been covered, because this will mean that your income is really variable. So some months, you’ll be able to pay yourself a little bit more, some months, you’ll be able to pay yourself a little bit less. And we don’t want you to be in a position where you’re taking more money from your business and it’s making. And in the end, you then oh, you’re businessman, a particularly relevant if you’re a limited company, you get into a position where you are then owing the business money, because you’re taking too much from it, that isn’t enough profit at the end, to pay you what you need to be able to live. So I want you to shift your focus into you being a cost in your business, you are not just a sort of byproduct, you are not just the thing at the end that gets thought about you are a cost
because if you couldn’t see your patients, or you couldn’t teach your Pilates classes, you’d have to pay somebody to do it for you. Because ultimately, for most of you, you wouldn’t have a business otherwise, because most most of you, I’m sure listen to this podcast, are still big fee earners within your business. So if you’re not working, the income drops. And ultimately, some people have the goal of working themselves out of the business. And not everybody has to do that. So some of you will want to stay clinical, and that’s absolutely fine. We need to then bring other people in to run your business. So you can say being clinical and hands on. But some of your goals will be to work yourself out of the business. So your business still takes the income whether you see clients or not. And I want you to start thinking about yourself as a cost. Because every time that you sit down to invoice a patient to write an email to respond to an inquiry, to write an exercise plan to actually see the client that is all a cost, you would have to pay somebody else some money to do that for you. So we want to build you in as a cost in your expenses. So it helps us see what that top line figure needs to be to mean that you can take away just salary and dividend, whatever you want to call it or something. And all the expenditure iscovered. And there’s some left at the end of the month. So that you can reinvest in your business, you can have that cash flow, that’s really important. And it might be at the end of the year, you can then take an additional payment as the business owner, but you’ve had your set income that you need every month not only just need to be able to live, but you’ve got your I call it your now better and best income. So for some business owners, we just have to focus on what we need now. Because they’re not even taking enough to be able to live in the way that they want to live, especially as the cost of living is just going up, okay, businesses are still taking that low amount and struggling each month to pay their bills and have enough in the pot to start perhaps going on a holiday or doing extra things or taking the kids here or spending a little bit more on yourself or buying that pair of shoes, there is no no judgement and nothing wrong with being able to provide yourself with these things as a result of running a successful business. So we want to start thinking about you as a cost on those lines that you see in your profit and loss reports on those lines that you see on the your expenses, you are one of those. So forecasting in your business is deciding how you’re going to get to that end goal. It can help you look at a look and decide on your actions. So if you think about let’s give you an example and say, right, I want to make 3000 pound, I want to take home 3000 pound every month, okay, what we need to look at is that’s a cost, you’ve then got all the expenses of running your business, and then you’ve got your tax payment as well. So we need to build that into it. And all of that added together will mean that you have a total number that your business has to do. And that total number means you can pay all the bills you can pay yourself and you might want to build in some what I call operating profit at the bottom which is that money that you can reinvest or you can let build up and you can decide what you do with it at the year end. And then we’ve got that top line number. So it might be for me to take 3000 pounds home as a salary as a dividend as whatever and then I’ve got 7000 pounds of expenses. Then actually I need 10,000 Coming in at the top. Now when we think about that number we think 10,000 It seems like loads of money I don’t know how I’m gonna get there and your brain when it doesn’t know the how it stops you from taking really good action. So what we need to be able to say to the brain is okay 10,000 pounds of revenue is going to come from 5000 pounds of that is coming from physio sessions. To and Half 1000 pounds of that is going to come from massage appointments, and two and a half 1000 pounds of that is going to come from Pilates classes. Or you might have a business that has only one element to it, you might be a sports therapist, and therefore 10,000 pounds of revenue is only coming from sports therapy appointments. But I still look at that and think, Well, I still don’t know how I’m gonna get there. So then you start thinking, right, okay, well, if my average session cost is example, 50 pounds, and I need to make, let’s say 5000 pound of Sports Therapy sessions, or physio sessions or
osteopathy sessions, I need to make five grand, and my average cost is 50. Well, if I take 5000 divided by 50, gives me 100. Right, so I need 100 sessions in the diary in a month to get 5000 out the top. Got it. So then each week, you could say, roughly, I need to be doing 2525 sessions a week. So your focus starts to shift not onto the 10,000 pounds, you’re not chasing the money, because that’s the wrong energy. The focus is on the delivery of those 25 physio sessions or osteopathy sessions or Sports Therapy sessions or massage sessions, whatever it is. And that becomes our focus. That’s how many clients I need in my clinic room. And I know as I Fallout 5000 pounds will come. Now to get to your average session cost. Again, this isn’t this is not an exact science, it’s about saying, Okay, if somebody sees me for an initial assessment, I charge them 80 pounds. If somebody sees me for a half an hour follow up, I charge them 50. If somebody sees me for 45 minutes, I charge them 65. So what you want to try and work out is your average session costs. And I usually do that over the hour. So I would look at okay, well I do two half an hour follow ups. So that’s 50 pounds a half an hour, that’s 100 pounds, I
do, my cost for 45 minutes is 75 pounds. So over an hour, that would be 100 pounds revenue, my initial assessment price is 95. So you can add those up, divided by the number of things that you’re doing. So to get an average divided by three in my case, and that will give you your average what your on average charging out to an hour for an hour of work. So you can then start to see, well, that’s many, that’s how many hours of treatment I need in my diary. So five grand falls out the bottom. And that really starts to allow your brain your ego that loves to know the how, Oh, I know exactly what I’m working towards. Now, it’s a much more tangible number. Let’s look at if you were a passes instructor,
okay, and your goal is 3000 pounds, take home, and you want to work out well I’ve got that’s what I want to take home, this is all the expenses in my business, we’ve allocated some towards attack towards tax. So that is what the top number needs to be. Let’s just say that 6000 pounds, okay, for you to be able to take 3k home now that’s you’re doing really well, if you’ve got 50% margin, if your take that. And that’s a great business model. Keep going if that’s the case, but just go with make six grand in the top, you get three grand at the bottom, with everything else taken into consideration. Now what you want to work out is, well how many people do I need attending for a Pilates class, and that becomes your target. If your average Pilates class is 10 pounds, then you need 600 people paying you 10 pounds, or 600 sessions in the month to get six grand out the top three run to fall out the bottom. So you can start to then dig into well okay, if I need 600 sessions, and I’ve got 10 people on each class, that means that I need 60 classes on the timetable in a month. And each week I need 15 classes. Because if I’ve got 15 classes on the timetable, 10 people doing it, then it ended up over the month I’ve got 600 sessions. But you might say oh but that doesn’t make sense. Because I’ve only got eight sessions I’m eight passes on a timetable. So the numbers are showing you that to get to where you
want to be, we’d have to add more classes in which will increase your expenditure. So forecasting is you deciding this is what my what I want to take this is what I want my income to be looking at analysis of past business performance and your trends. So you can look at your past data. And so therefore you can look at your expenditure You can also bring in seasonal trends. So as a business in our industry, we, we do have seasonal trends. And you can look back at your years of data if you’ve been established for a while, and you can look at, on average, when you have months that generally are slightly lower in terms of income. I know in our business that in August, July and August, we naturally
see a drop off. And that’s because a lot of our age range of our clients have kids and they go on holiday. I also know that I have a big, I have a lot of staff. So I have a lot of annual leave in July and August, which ultimately means we will have less ability to make income. So in your business, if you are if you are a leader and you have team and you have employed staff, if you say have 10 employees, each employee is pro rata is entitled to 5.6 weeks of annual leave a year. Okay, times that by 10 is nearly 60 weeks of the year that that people will have, obviously individually as annual leave. So when you’ve got bigger team, you’ll almost never have a week where you’ve got everybody in. Because that’s
how many weeks of annual year you’ve got annual leave you’ve got to predict for. So building all these numbers into your forecast allows you to kind of see not what’s realistic, I hate that word. But what you’ve got the capacity to do. You can also look well, if my numbers are suggesting I’m going to go from 10,000 pounds to 12,000 to 13,000 to 14,000 pounds in revenue in number of sessions that we’re doing a number of, of Pilates classes that we’re teaching. But I’ve literally only got the capacity to do 10,000 pounds of that. That tells us we’ve got to recruit. It tells us ahead of time when we might need to recruit. So if your forecast is showing that say in June, you’re taking that next step, you don’t want to see any more clients, the rest of your team or fall or perhaps you’ve not even got team yet but you don’t want to see any more. But forecast is telling you we’re going to be doing more than we can start looking at in February March, a recruitment plan. Because it’s that B do have principle, we can’t wait to have all the clients to then decide to get the member of staff, we’ve got to start predicting going to get the member of staff here. And I’ve got a marketing plan in place to then get the clients that we need
through the door. So forecasting is it’s a little bit like predicting the weather. And it’s a little bit about being a fortune teller. But you can use past data in your business. You can use seasonal trends, you can look at how the industry is working, you can look at the economy to a certain level. And you can just predict and decide what it is you want to do in your business moving forward. It also helps you identify any ongoing problems because when you looking at it month on month we look at it week on week, you can reduce
the risk of overspending. If you start prioritising profit over turnover, you will start to see where there are better margins in your business. I can’t tell you how many times I’ve talked to business owners who are perhaps that give you an example, renting some of their rooms out, okay. And when they rent the rooms out, they are having to check in that they turn the heating off. I had it one of our fabulous clients to work let me tell you this story. She was renting out her studio to I think it was a yoga instructor or
somebody that was in hypnotherapy, something like that. And this instructor wanted this client to market all of her clients about her classes that are going to run in the studio, okay, because this, this physio got great client bases. And this instructor wanted to use her studio, but use all of her client, her access to clients to build her classes up, okay. This instructor was paying something like 15 1215 pound for the hour to rent the studio out. And this instructor forgot to turn the storage heaters off overnight. So when the physio came in next day, and the place was absolutely overheating, it cost her something like 30 pounds to put have the storage heaters left on overnight, she was charging 12 pounds. It then meant that she had to drive in the next day to check that the heating was turned off. It wasn’t that was another hour of her time. And she then had to email all her clients about this instructors class, which was another amount of time then she had to upload stuff on her website because she was trying to help this woman out. And then I just stopped and said, whoa, whoa, whoa, whoa, whoa, hang on a minute. What she might you’re not making any money because that’s all taxable income as well. So she had this moment of having to step back and think I’m wasting so much time I’m so much energy, because I was chasing 12 pounds a week additional income, when I could spend a tiny proportion of that into getting more people into my business and making 80 pounds an hour. So it’s kind of looking at, again with your forecast, where the lowest hanging fruit is where your margins are in your business. For those of you who are running Pilates classes that are not full, you have an expense to run those classes already. Therefore, to make better margins, you need to get those classes fuller. So you don’t need to increase your expenses, you need to get more people into the classes in the first place to create more profit margin. If you’ve got team members who are not working at a high enough capacity, ie, they’re not seeing enough clients on their on the client list in that diary, you don’t have to add more staff members in you need to make them more efficient, you need to manage diaries more efficiently. Therefore, you can optimise how much profit you make from that member of staff. But you only know this from running your numbers. So the first kind of set and I guess I guess one more thing that I’ve forgotten that I want to add is that we’ve just come through the pandemic. And when we hit the pandemic, we act, there was actually no better time to borrow money. It was really cheap, a really,really, really cheap way of getting money into your business quick and there was the Beatles low and there was a sea bills low and there was loads of ways of getting money quickly. And we decided we would go for sea bills, though we weren’t, we couldn’t go for B bills, because we were too big, we needed to go for the bigger amount. But to get that sea bills loan. And bearing in mind, we needed it fast because you know, pandemic literally came out of nowhere. And we have massive amount of expenses every month to keep going and we were facing shutting 65% of the business. Because massage can go ahead, Pilates can go ahead, etc, etc. I thought I need to protect the business and I need we need to get cash in to protect. If I don’t use it, I can always pay it back. But I need it. To get that seals loan, I had to provide them with a financial forecast. I needed to show them and tell them
what I was planning my business to do over the coming year. So if you’re looking to borrow money, borrow somebody else’s money best way to leverage borrow somebody else’s money to grow your own business, they are going to want to see what your plans are. So having a financial forecast is really important for growth. And there is absolutely nothing wrong with borrowing money. If it’s in a strategic way, if you’ve got a plan to be able to get you where you want to be, we have a cash cow business, don’t we we are where most of us are businesses that see the client and get paid to the client, they get paid. We are very, very minimal debtors in our business, unless you are a business that runs the majority of your income comes from insurance patients. If that’s the case, you need to protect your cash flow, because their payment terms tend to be extremely long. And we also know for many of our insurance patients, the margins are incredibly low because they won’t pay our going rate. And we’ve just made the decision to step away from one of our one of the insurance companies. Do you know if I’m allowed to mention it? Probably can. We’ve we’ve made the decision to move away from one of the main insurance companies, you can probably guess who that is, because the things that we’re being asked to prove and jump through. And the the paperwork being we were being asked to provide was all cost. The fees that they were paying was probably 60% of our actual clinic fee, I run the numbers and looked at it was less than 5% of our overall turnover. So I made the decision, we were just gonna get rid of it. And yes, it is a risk because a lot of people say well, then I’m going to lose 5% of my income. What actually happened is we created 5% more appointments to fill with private clients who were paying our full fee. So our margins were better. When you know your numbers in this detail, these are the kind of numbers that you can you need to know to then make those big decisions in your business. So ideally, you want to have the majority of your income coming from private paying patients and a smaller amount of income coming from insurance patients, if that’s your business model. And you want to make sure that because private patients your cash flow is always churning, it’s always coming through. If you’ve got insurance patients, your you’re going to have a slower cash injection because it’s going to take a long time. Some payment terms are 90 120 days. You need to be aware of that as well. Business Owner when you’ve got staff and you’re having to pay out the staff member before you’ve been paid as a business, there’s loads of way round ways around, you can protect your cash a little bit more in terms of payment in lieu and stretching out when you make your first payments for that member of staff when they join your business. But you’ve got to start looking at your business performance. Past averages of things that cost you each month, you can cut the fat that way, because you’re looking at your expenditure, you want to start looking at your goals for your life and your business and your income for the next year ahead. And what you want, because that’s the most important thing. And then we’ve got to start to plan for it, we’ve actually got to come up with a plan of how we’re going to get there. Now, you might say to me, Well, I did, I’d like to make 10,000 pounds a month. And I would say to you just shoot for the stars, and you might hit the moon. But what we need to look at is you can’t in a business, strip all the money out as the business owner and expect to grow, there’s got to be an element of especially when you’re very new in business or newly established business, there is an element of gradually increasing How much salary dividend, whatever you’re taking, so that you’ve got the money to reinvest to get to that next level of growth, you can’t strip your account every month. So a forecast helps plan for that gradual increase of your income, that gradual increase of that profit level, not necessarily having to always increase turnover, because growth is not, it’s not all about growth. It’s about making more profit, better margins. So your margins are going to have been squeezed cost of delivery is going up, we used to run at a 74% gross profit margin last month, we ran at 58%. Because cost of delivery has gone, jumped. But I have to know those numbers to make these right decisions in my business. So first steps for you guys thinking about your forecasting is a are you burying your head in the sand. And if you are, pull it out and really spend the time on this stuff, because it will transform how you look at your business. If you feel like you never have enough time and you’re constantly on a treadmill and running round, it’s often because we don’t know where we should spend our time because we don’t know what the numbers are telling us. So try and commit to spending some real solid time and getting to know the numbers in your business. We want to know not that big level I need to make 10k we want to really know tangibly, how many people does that mean I need in my classes and then in my physio sessions, start thinking about you as a cost in your business. What do you want to make each month and that’s where the focus needs to be. And then we add those expenses in and we can cut the fat and we can we can streamline our expenses as much as we possibly can. And that will give us that top line level that we’re going for that goal that we’re aiming for. So if you can from this episode, just go away and either allocate some time in your diary to start thinking about your forecast. Start thinking about what it is you want to earn as a business owner, Don’t be the person that gets paid last. If you have that mentality will always only ever be what’s left over and I can promise you, that will never be enough for you to take what you need. Thank you for listening, and join me for the next episode. Thank you for listening to treat your business with Katie Bell, the podcast that tells you what you really need to hear. And now when it comes to running a successful business in the health and wellness industry that gives you the time, money and freedom that you are wanting for access to our free workshops on how to get more clients in your business, how to make more income in the next 30 days. And to get more time back in your business on life. Head to our free Facebook group today. Treat your business or head over to thrive dash business coaching.com. All of the links are available in the show notes. Hey there, this is Katie from the Jane team. If you’re new to the name, I’d love to introduce you. Jane is an all in one practice management software with helpful features like online booking, scheduling, charting and billing. You’ll also be backed by a knowledgeable support team ready to help you every step of the way. Come get to know us at Gmail dot app. We’d love to meet you and see if Jane is the right fit for your practice.
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The topic of this week's podcast is "how can we finish what we start".
Joining Katie this week in the studio is Customer Experience and Retention expert Fran Smith from 'And So The Journey Begins'.
In today's episode of the podcast, I am joined by Philippa Aldridge who is one of our mindset coaches here at Thrive.
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