Your 2024 Game Plan with Katie Bell
Discussing strategic planning for the upcoming year. Emphasising the importance of reflection on the past year's successes and challenges
Welcome to this weeks episode of Treat Your Business, the podcast for Health & Wellness Business Owners. This week I’m discussing ‘Bigger is not better’.
What if, rather than serving your business, your business served you? Imagine that hey! Most people treat profit like an afterthought. Most people and traditional accounting methods treat profit as, we look through everything and then profit spits out the bottom. Most treat profit like an end result, and we’ll just focus on the growth element of our business.
So today I am going to be challenging that thought approach and discuss:
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.
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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. Bigger is not better. What if, rather than serving your business, your business served you imagine that hey, most people treat profit like an afterthought. Most people and a traditional accounting methods treat profit as we look through everything and then profit spits out the bottom. Most treat profit like an end result. And we’ll just focus on the growth element of our business. So growth comes first profit comes last. Now, money is the foundation, okay? And without enough money, you can’t take your message. You can’t take your services out there, you can’t help as many people as you want to help. And in our industry, so many of you that I talked to are so passionate about what you do, and making that massive impact on people’s health and wellness in any area, whether it’s children’s physio, whether it’s whether you specialise in the neuro aspects of stuff, whether you are a sports therapist, and you’re really focused on the rehab of sports injuries, you’re so passionate about getting your service out there and helping those people that often profit is an afterthought. So money has to be the foundation, because then the more money that you make, the more you can get yourself out there, the more people you can help, the bigger impact you can make. And without money, we are slaves to our business, which is the whole reason most of
us started our business in the first place is to be free. Whether you’ve always been in private practice, or whether you have moved from the NHS into private practice, there will have been a reason way back when that you started this and for most of you, it will be driven around, you want to be able to really make a difference to patients and you you have got bigger aspirations for your life. And you want to be able to control and be in charge of how you work with patients and what your patients get and what outcomes that you can deliver to them. But because we get so sort of focused on I guess our patients and the results and just giving the best and giving as much as we possibly can, profit always seems to come last and then never ever seems to be quite enough money at the end of the month to pay the business owner the salary that a they absolutely deserve. But be they weren’t because of the number of hours that they have worked in our business. So I imagine you are listening to this right as kind of like an entrepreneurial superhero in your entrepreneurial capes, racing round, but your your powers that you’ve got as an entrepreneur can only yield and give as much power as your energy source provides and your energy source is money. So we all think if we grow if we focus on growth, profit will take care of itself. Wrong. money issues arise when a few things can happen. Sales don’t like the word sales because we don’t sell we solve people’s problems. When appointments or class bookings, or follow up sessions, reduce pay when they slow down. The other aspect of it is quite the opposite is when appointments and class bookings and classes increase the speed up. So therefore your expenses jump as well. And you don’t create that consistent cash flow. consistent cash flow is really hard to sustain in a business, because you will have drought periods that happen and often unexpectedly happen as well. And what happens when your sales start to increase, your revenue starts to increase, your appointments start to increase, you start to do more, your expenses jump up to match
that. And then you kind of get locked in at that new level. Because all of a sudden, you’ve got that extra staff member, or you’ve got extra cost of delivering those services, you need more equipment you need, whatever it is those costs go up as well. And then you locked in at that new level. And you’re absolutely not seeing any improvement in your profit levels. And it really baffles me when businesses are just focused on getting bigger all the time. Because, as we know, increasing the size of your business, bringing more staff members on getting satellite clinics getting additional studios, it doesn’t guarantee bigger profits. Okay, they absolutely can deliver you more profits, but it doesn’t mean that you’re going to double your profits, which is often what we think, oh, I’ll just take this business, I’ll just do the same over there. And I’ll just get more profits as a result of it. Because you will have more challenges, you will have more opportunities, more staff members always provide more challenges for you to deal with. So I want you to really know that profit, profit isn’t an event. It’s not something that happens at the year end, when you finally get your tax return back from your accountant, and they go so, Jamie, you have made 130,000 This year, and you have made 25,000 profit. It needs to be part of every transaction that happens in your business. Every week, that wheat bag you sell every appointment that you see, every room rent that you have profit needs to be part of that transaction, because if it’s not stop doing it, profit needs to be a habit. So your job as a business owner is yes is to think about growth. Absolutely. For most of you, you are not happy with where you are right now, and you want to change that. But your job first is to maximise your profit. Pay regardless of the size of your business. Because what you focus on expands. And when we focus on maximising profit, you’ll start to discover new ways to streamline your business, to grow your business. But you’ve got to figure out the things that make profit and stop the things that don’t want. In my previous episodes, I gave an example of a client of ours that was renting her room out a studio out. And when we worked out what it was costing her in terms of her time, and the income that she was generating from the studio rent to this sort of yoga instructor who was just using on a Friday night, she was actually in a net loss position, she was losing money. Because your time as a business owner is worth money. Every minute you spend on your business is worth it might not be that you see that money coming into your business, like I spend two hours doing marketing, and I get paid 100 pounds to do that, nope. When you work on your business, you will see that growth and you will see that increase in profit margin, then flow as a result of it. Because if you don’t, then ultimately you need to stop doing that element of whatever you’re working on in your business because it’s not giving you a
return on your investment. So we’ve got to start I said to this this client of ours, okay, it’s taking you loads of time, it’s loads of hassle, she’s leaving your storage heaters on she’s leaving it in a tip excuse my French, and all for basically nine pounds. But then let’s take off the expenditure of that room anyway, which is the proportion of heating, lighting, insurance tax. And then let’s add back all the time that you’ve spent having to go and check that he has turned the storage heaters off. You’ve probably lost about 75 to 100 pounds, in fact probably more I think it was so really start to think you’re a busy business owner you spending loads of time doing stuff what what is making you money as what’s not. Selling equipment is another thing so a lot of business owners carry a lot of stock. And if you don’t have a huge turnover, so you don’t have a lot of footfall that are not buying that stock from you. Then ultimately You’ll be spending a lot of money to not make a vote to not make a lot of money. Make sure that your margins on what you sell things for are worth the time. And the the calculated risk of you buying that stock in the first place. Okay. And there’s loads of ways that you can do that, you know, make sure that when you buy that stock item in spiky balls, theraband, wheat bags, ice packs, that a you’ve got the demand for them be you’ve got some way of upselling them for clients coming through because when clients come to us, and we say to them, Well, you could do the weight bearing, you could do the Thera band, you could do the spiky ball, oh, by the way, we have an equipment pack and just buy it all for 1499. Right now, do you want to do that? Yes, because I don’t want to have to think about this for myself. So you can create that bolt on, you can create that upsell. But we also know our margins on it, we have an amazing week back supplier, which means we can make really significant margins on it, it is worth me doing. We know per metre, what our theraband costs us to buy in, so we can make sure we’ve got the right margins for it, we work out how much each spiky ball costs us so we
can bulk buy, and bring that cost down because we know we sell a lot of spiky balls, for example. Okay, but also don’t hold stock that you aren’t going to sell. Because then you’re going to have to do promotions, then you have to do offers just to get rid of it, because it’s taking up space. So really figure out the things in your business that make you profit and stop the things that don’t. And when you get into a point in your business where let’s say you’ve got a member of staff, and they do, they are a physio, and they they also do massage for you. I know that your margins as a physio appointment will be way better than they were, they will be as a massage appointment. So it’s then looking at the allocation of time and activity to that member of staff because you, you ultimately want them to be making more income more profit. And you can do that by filling them with physio sessions, rather than massage sessions. Again, your data is going to tell you this sort of stuff. So really spend the time to analyse each element of your business and see where you make the most money. And when you focus on that it will expand. When we focus on growth, we kind of scramble to grow at all cost outweigh we’re just doing everything we’re adding all these ideas in with with trucking promotions in there, we’re doing all sorts, we grow all crop costs, including the quality of your life, I speak to so many business owners who are exhausted, overwhelmed, that absolutely knackered they’re on a hamster wheel, they can’t get off. And they are having to grow at their own cost, the cost of their health. When you start thinking about profit first, just a much cleverer thought process, you start thinking about the how can I work smarter, rather than just harder, I had an amazing one of our mastermind clients. And I won’t mention the name because I’ve not asked her if I can mention her, but I’m sure she will be fine about it. One of my mastermind clients amazing. She looks at how she works with her women’s health patients. And she recognised that she could deliver an amazing solution to their problems, but didn’t always mean that she had to be delivering her service face to face because there was always a top out there was always a level she couldn’t go any further she couldn’t get any more patients in in the week she couldn’t. That was her ceiling. So she created this premium way of working with her. That yes included some face to face work but also included some non face to face work some online stuff that went in the background, some ways of checking in with clients. That meant she was making way more profit,
because she was having that her expenditure to deliver and a cost to deliver was so much less really clever way of starting to think about your business because she started thinking about profit first and growth. Second, when you start thinking about profit, you figure out how to make it consistently. And one of the things that we we often focus on is this bank balance accounting bank balance accounting is when you look at your bank as a gauge of how well your business is doing. Okay. And for most of you it is the worst way to gauge how your business is doing because you can’t use your bank balance as a way of saying my business has been successful or not. Because it will fluctuate at various periods of the month depending on when your bills go out when your tax is due when all of these things that happen so when we bank balance account, okay, and we don’t see enough in what we do is we take on that troublesome client, that one client that you think oh god and never ever want to have to work with her again. But you wind up saying yes, because you bank balanced account it you’ve looked at your bank thought, oh my god, there’s not enough in there. Or we just chuck a new product together and we took it out there. And actually no strategy, we’re not making any margin on it, but we just throw it out there because we need some more money. Or we throw a last minute promotion out, we jump on Black Friday deals, we start giving to for ones out, we start reducing our margins. Again, for every service that we have out there. Or one of the biggest, the biggest things I hear is, I’ll just have to do the work myself. So when we bank balance account, and we think I could have no way I can afford to pay my VA, what you do is you start taking all that all that work back as the business owner, because just because you can doesn’t mean you should. But we often have this mindset of well, I will just do it because I can do it quicker and better anyway. And then we start to stagnate or decline as a business. So traditional accounting methods are sales. So let’s use the word revenue or like number of things done in your business, minus your expenses, all the things that it costs, gives you your profit. Okay, that’s, that’s traditional accounting. So profit is an afterthought. So your, your your Profit and Loss report will say, this is how many physio sessions you’ve done, ie 10,000 pounds worth of income, you’ll then take off your cost of services or cost of sales. So what it has cost you to deliver that service, okay. And that gives you a gross profit margin, then you take off all your other expenses, like your administation, where you rent your heat, your lighting, your bill, all that sort of stuff, then we take off the tax, then we might take off an owner salary, and then we’ve got profit. Or most of all, what happens is, we take off everything we look at what’s left, and then we go, Oh, my salary will just have to be that much. A better way of looking at it is to say, number of sales minus profit equals expenses. So what is my business able to afford? And when we do that math quite often, when we actually allocate the profit, first, we start to see that our expenses are way too high, way too high. So a really good tip is that use smaller plates, okay, this is like a traditional diet technique, isn’t it? If you want to eat less calories, eat off smaller plates. using smaller plates means having more accounts in your business, separate your accounts out. So one of the easiest ways most simplest ways, first of all, is to have a separate account for your tax, a separate account for your profit, and a separate account for your what I call your operating account, your operating expense expenditure account. Three is a baseline, okay. And what you can start to do is you can start to allocate and move money, so that your operating expenditure account never really builds up any, any cash in, because ultimately, there’s enough money in there to pay the expenses. And that’s it. But you’re moving money into your profit account, you’re moving money into your tax account. So you don’t get to the end of the year, and then suddenly have a massive tax bill to find that is so stressful, and you don’t need to do it. Because profit is a habit, if we start having profit is in every transaction, you should be moving money into your profit account. So when I get my profit and loss account back, I know what my corporation tax liability is, I move it into account. I know what my operating profit is a move that out. Now, in a in a kind of very simple system, that works really nicely. Sometimes your profit account needs to come back in, because you need it for cash flow. So you want enough to build up in your operating expenditure account that you’ve got that cash flow, you don’t have to keep buying into your profit, ideally, but if you’re new to this way of accounting, it’s not as kind of cutthroat as that. But if you can use smaller plates, if you can separate out your accounts and start thinking about managing your money in a better way. You will start to build up some profit in your business you will start to build up your tax so you’ve got it there allocated. If you build up profit, and you have you don’t you decide to actually I’m going to reinvest some of it back into the business. But there’s an amount left you get to choose what you do as a business owner. Do you take it as a salary and pay a dividend tax on it? If you if you’re a sole trader then it’s all yours anyway. Because you already pay tax on it because you pay tax on all of your net profit. Or do you keep it in there? Because you’ve already paid your corporation tax on it. And do you do you reinvest it to build another clinic room to bring another member of staff on? That is all line with your financial forecast. And I do want to say that if you feel really overwhelmed by this, if you feel like angry that you can’t manage your money, if you feel bad that you’ve not done that it is 100% Normal. It’s absolutely okay, just start somewhere. Because if you start managing your money better, then you are giving that energy out there that you are ready for more of it, you’re ready to receive more of it. So money management is really, really key. Just start somewhere in terms of looking at all of these things that go on in my business, all these things that I spend loads of time and effort on. And how much profit did I actually make as a result of it. And stop being cutthroat stop being ruthless with where you spend your time. I hope you’ve enjoyed listening to this podcast. Don’t feel overwhelmed, just start somewhere. And I look forward to seeing you in the next one. 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 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 and 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 gene 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 knowledgeable support team ready to help you every step of the way. Come get to know us at Jane dot app. We’d love to meet you and see if Jane is the right fit for your practice.
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