The Magic Formula in Marketing
Tune in to this week's episode to find out the magic formula for marketing your clinic or studio.
Welcome to this episode of the Treat Your Business podcast, I am really excited to bring you this episode because we’re going to be talking about something that’s really relevant right now.
If you’re listening to it, as it goes live, we are apparently according to the media in the middle of a recession or an economic crisis.
So I want to talk to you about how we can ensure that we are (a) still here at the end of this challenging period, because it will end and we will come out the other side of it. And (b) how we can make sure that you are going to actually make money as we pass through this this challenging time.
In todays episode the key discussion points are:
Introduction to today’s episode.
Makeover your marketing in a day! Here is the waiting list link!
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…
00:00:00 – Introduction to today’s episode.
00:06:42 – Why you need to understand your margins
00:08:58 – The importance of reoccurring income over one-off events.
00:15:12 – What does it really cost you to see a patient in your business?
00:19:23 – What would be good for you to work out?
00:21:51 – Are your prices making you any money? Or do you have to go through a price rise?
00:27:07 – Why price rises must be dictated by your margins.
00:29:07 – What you need to be doing in marketing right now to get clients through the door.
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 the treat, your business podcast, I am really excited to bring you this episode because we’re going to be talking about something that’s really relevant right now. And if you’re listening to it, as it goes live, we are apparently according to the media in the middle of a recession or an economic crisis. So I want to talk to you about how we can ensure that we are a still here at the end of this challenging period because it will end and we will come out the other side of it. But also how we can make sure that you are going to actually make money as we pass through this this challenging time. Google have just announced plans to layoff 12,000 people, Microsoft is laying off 10,000 Amazon is looking to hit 18,000 layoffs by the end of the year, meta stripe, left Twitter Wayfair all of these big businesses are all laying off 1000s of people. Is it the end of the world? Well, we’re not even close things are really, they’re still good. We have just had some of our best months in our physiotherapy and wellness business. But we can’t escape the consequences of the last three years. You can’t do what you did as a business owner and expect things to change. So for those of you who are still thinking back to what we did, pre pandemic and expecting that to that work in our business, we’re dealing with a very different marketplace now. So we’ve got to accept we have to do things differently. We need to be focusing on different things. But are you ready for it? Are you truly ready for this next 12 month period? And if you’re listening thinking, oh my goodness, I don’t know if I am I don’t know what I should be doing? I don’t know what I should be focusing on? Well, don’t worry, because you’ve still got loads of time to prepare. And it’s never too late as a business owner to course correct. But what I would say it does get harder, the longer that you wait to course correct. And burying our heads in the sand not really being clear about our numbers. And our strategy for this next year will mean that many business owners are going to really really find the next 12 months extremely challenging. And the reality of it is for many business owners, they won’t be here in 2024. Last year had challenges the year before her challenges this year has got challenges and all I would say is welcome to running a business but where there is chaos, I always think there is opportunity. So today’s podcast is going to focus on three key things that I think you need to be doing as a business owner in the health and wellness industry right now to make sure that you are going to make more money in a recession number one margin. Now if your business is struggling to get hold of profit margin, you’ll be in a very difficult position by the end of 2023. And what I mean by that is the very basic level the cost that you sell your service at minus all the expenses that it costs to run that service, and then deduct your your taxable VAT if you’re if you’re battable. And then what you make out on the other side of it. Okay, that is your margin. So as the market tightens its belt. And that’s what we saw. I actually think we saw it in September and October. I know looking at my numbers in my physiotherapy wireless business, we definitely saw and, and speaking to many clinic owners across the country, speaking to Michael, who, who runs all of our marketing, hm DJ, he’s a fantastic company that worked with many physio clinics across the country. Everybody saw a downturn, the market tighten its belt, because we were in a state of fear. And on my previous podcast, I’ve talked about this, we were told by the media, we were put into a state of worry and panic about all of our energy bills going up significantly. And yes, they have increased, perhaps not quite to the level that we thought we were in the middle of a fuel crisis. You know, the cost of our petrol and our diesel and running, our cars was going up, everything seemed to be costing more money. And so what we think we saw in September, October was that market tightening its belt, we actually then saw in November, December, and in January, quite a big boom again. And as I say, we’ve had some extremely good months. But as the market does tighten its belt, as people start to think about what they need to cut, it will get more expensive to get the same people to say yes to your services, it’s also going to get more expensive to deliver those services. And that ultimately is going to eat into your profit level. So if you haven’t ever dug into your numbers, and really understood the margin that you’re making on each service on each thing that you do in your business, because I know a lot of you have very diverse businesses, you might have Pilates, you might have Pilates classes, you might have Pilates one to ones, you might have physiotherapy services, you might run ultrasounds, you might have Shockwave, all of those will have a different level of a different margin on them. So we want to be making sure that we know what our margins are. Because ultimately, we need to be pushing the things that are making a better margin, particularly at this time, there’s two main ways to increase your your profit margin, and very simply, number one is to reduce what it costs you to run them. So looking at how we can reduce our expenses, reduce our overheads. And number two is to charge more money. Now, if we’re not actively working on those two things right now, I would urge you to reprioritize and make it happen. You’ve probably listened to my podcast previously, you may have been on some of our free training within our Facebook create community. And we’ve just talked quite a lot about how to price rising and recession, I would really encourage you I’ll pop it in the show notes. So you can go and listen back to that training session. But I would really encourage you to think about cutting the fat out of your business and really prioritising price rising. Understanding your margins allows you to then plan how much you want to price rise by and how much you need to price rise by because that that kind of old will just put it up by 50 P A session or a pound a session that might not solve the problem for you that might not create the margin that you need to survive over the next 12 months. The second most important thing we need to talk about is expense matching. Now this means that in your businesses in your physiotherapy clinic, you have reoccurring expenses every month to run your business that could be your rent, your rates, your insurance, your card machine, your mobile phones, a reoccurring amount of expenses. So therefore, surely we need a reoccurring income. But most of us are very much focused on one off income events. So this is where we are running our business on a complete Pay As You Go system or short court very short courses. So we’ve got these one off quick cash bursts. But what we’re doing is we’re forever chasing. Wouldn’t it be nice if you opened your your business on the first of February on the first of March, and you already had reoccurring income allocated for that month that matched your expenditure, which meant that Anything over that you then start to make profit. And it’s not that pressure to chase that sale to chase more leads, Chase more inquiries and constantly feel like you’re on that rat race. So that expense matching is being able to prioritise reoccurring income over one off income events. And I’m talking very much about what we’re seeing right now. out as where you need to spend your time where you need to push your energy. But that doesn’t mean reducing your price. So I want you to put less priority on quick cash and more priority on continuity. So to give you an example in our business, we have two main ways that we have reoccurring income streams. So we have a Pilates membership, where people pay every month, over a 12 month period to come to 46 classes within the calendar year. Okay. And then we also have a, we have a diamond programme in our massage services. So we have gold, platinum and diamond and diamond is a reoccurring monthly direct debit that that gives people one or two massages a month. Okay? Now we have a big push in our business over the next quarter to actively increase our reoccurring income. So as well as a big driver towards how can we just stop focusing on one off small events that might bring small amounts of cash into the business and how can we reprioritize our energy and our time and our marketing to grow our membership, okay, in both our massage and our Pilates departments. And the third key thing that we need to be focusing on is leads, leads, leads. So when the belt tightens, you will need more leads, that means more inquiries more people inquiring about your services to sell the same volume, as you maybe once did, perhaps pre recession and pre COVID. Or when fear, which is what we’re seeing right now floods the market and doubt increases, you’ll need to talk to more people in order to make the same amount of money. You might be having people ringing your clinic, but they’re ringing lots of people before they make the decision of who they’re going to work with. Okay, so we’ve got to think about when we are passing through a recession, when we’re in, in a challenging period, we must not go under a rock and stop spending money on marketing, we must be driving leads into our business, we’re going to need more of that to sell the same volume as you were doing. And what’s really important is to not rely on your organic growth, many, many business owners that I talked to have grown organically and and I would say five to eight years ago that was very much how we grew, we grew organically, we grew on word of mouth, we grew on people telling other people about how great we were. And to increase your business, you’ve got to increase the most expensive thing, the most expensive asset and that is your time. If you focused on organic growth, you’re going to have to commit an enormous amount of time to grow and get the leads through the door that you need to sell, or to make the money that you need to make. And I would say chucking money at ads. So non organic, right. So this is where you pay money to Google or to Facebook or Instagram. just chucking money at ads that don’t work is not going to be a smart move either. The biggest safety net, most people I speak to. And the biggest safety net you can give yourself is a big list of people who already like you know you and trust you. So most of you who have got huge databases of people that used to visit you that like you know you entrust you that may have just forgotten about you, they’ve got the habit of coming to see you something else has taken that place. And we know through marketing that it takes many, many, many times, I think I read two different things, and one tells me it’s seven and one tells me it’s 18. So let’s just go somewhere in the middle of 14. But we know it takes a lot of times to people for people to see you. Before they make that conscious decision, I need to go and walk in with them. We need to have a multi layered visibility strategy. We can’t just rely on organic growth anymore. We need to have marketing taps that we can turn on and off and multiple ones of those. So what I don’t like to do is have all our eggs in one basket at any one time, particularly in the online world because you don’t own that data. You don’t own Facebook, you don’t own all the leads that you have in Facebook physically just turn it off tomorrow. So we want to make sure we’re spreading our marketing and looking at that multi layer visibility strategy where we’ve got lots of different things working for us, but not ignoring the people that are already in our network. And there’s lots of other ways. We can reduce expenses. We could sell more to our current clients. We could diversify our offering. We could look at our tax strategies. We could look at leveraging our debt So there’s lots and lots of ways that you can make more money and they’re in a recession. But those three main things we talked about was margin expense matching and lead generation. So I want to bring this back to margin and talk about that a little bit more. What does it really cost you to see a patient in your business? Or what does it really cost you to teach a Pilates class in your business. Now, I’m going to give you an example here. So let’s say for example, you have a physiotherapy clinic. And your physiotherapy clinic is roughly 1000 square foot, okay. And in that physiotherapy clinic, you’ve got three treatment rooms, you’ve got a toilet, you’ve got a reception area, you might have a stock room. So you can just kind of picture that premises. For me, now, you’ve got three treatment rooms, which take them about 500 square foot, and the other 500 square foot is your reception, your toilet, your stock room, and the place where you leave your mop and bucket, for example. So half of that square foot is your income generating square foot, that’s where you can make your money in those three treatment rooms. Okay, now, business owners could look at it and go, well, the common sense thing would be to get rid of your reception area, have a Virtual Receptionist, and don’t even have a space for that, and put a fourth treatment room in because that is income generating, okay, that doesn’t always work for everybody. We could put another two, maybe three treatment rooms in our reception space, but we don’t at my business doesn’t align with that I like a reception team. I like people to meet and greet. We have a community of people, people stay for coffee, it’s very, very important to us. So half half of your square foot is your income generating space. Now let’s say that you’ve got expenses every month that equate to 5000 pounds, right? So if that your all your overheads are 5000, you’ve got three treatment rooms that can make you money. And you might work. You could say to me, Well, we open our treatment rooms from eight in the morning till eight at night, Monday to Friday cater, okay, so we’ve got 12 hours in a day, where those three treatment rooms have got the ability to generate income for you. But your costs are whether you’re open or not. So it costs you 5000 pounds before you even open your clinic door. Okay? Because whether you’re working in it or not that midnight, it’s still costing you money. So what I want you to try and work out is how much is that total space costing you per hour? Because then we can start to think about what if I’ve got three treatment rooms. And actually Katie, only two of them are in use for two thirds of the time, then your 5000 pound is only split between those two treatment rooms two thirds of the time. But what you’re actually paying for is the whole premises 24 hours a day, seven days a week, 365 days of the year, whether you’re open or not. So the obvious ways to then make more money is to either get more people in your clinics so that your rooms are in use for more time, open more. So you know lots of small businesses close by holidays between Christmas and New Year. I really don’t encourage people to have a lot of closure time if you’re trying to grow your business. Okay. It blows my mind. When businesses closed for two weeks over Christmas, your two weeks downtime. I’m happy with it if you forecasted for that. If you’ve decided for the other 48 weeks of the year or 50 weeks of the year, you’re going to make enough money to be able to close at Christmas great. But most of us haven’t forecasted that closure in. Okay, Christmas furrows I forecast to 75% of our total turnover. I focus 25% less and in December, because I know I have a big team. I have a lot of people that need time off. I have. We have Christmas Day Boxing Day and then the bank holiday closed, we open between Christmas and New Year. So there is some downtime, but I’ve also got less team in. So I’m never going to do the same amount of turnover as I did in November. So what would be good for you to work out is it cost me 5000 pounds to run my business and open 12 hours a day across three treatment rooms. That’s 36 hours. But you might say to me, well, there’s absolutely no way that we would have a patient in every minute every half hour. I would say usually on a 12 hour day we would factor in that we would probably see patients about 10 and a half hours within that room. Because you’ve got team that going to need lunch, you’re going to need team that need change over time between rooms. And just logistically that would be how I would forecast so I would run People saying 10 to 10 and a half hours will be used within a 12 hour period. So you might then say, Okay, well, I’ve got 30 hours a day that my clinics open, that can jump in those rooms can generate income 30 times five, five days of the week is 150 hours, that we could be making money in our clinic. Okay. And it cost me 5000 pounds a month to rent that space. So 150, if you’re open 52 weeks of the year, you would times this by 4.3. But you might want to work out how many weeks you’re actually open for, okay, because not all of you are going to open for 52 weeks of the year. So just figure that out, work out how many weeks you think you’re actually open for manage the bank holidays, if you decide to close for those, etc. And then you want to work out 5000 pounds in one month, 150 hours over the month roughly is about 600 hours in the month. 5000 pounds, divided by 600 hours means that every single hour, it costs a pound 33. So then you’ve got well it cost me a pound 33 plus your staff cost. So plus however much you’re paying your freelancer or your employed member of staff to run that session for you. So that back now it might be another 25 pounds. Okay, so now we’re up to 33. So you know for that, that session is costing the business 33 pounds, and you’re charging 50. Therefore, you’re making 17 pound margin on it. Gross margin, because I’ve not taken tax off that. So what we want to get you be able to get you to understand is for one hour in your treatment room, what does it actually cost you. Because then you can start to really understand are your prices as they are now making you any money? Or do you absolutely have to go through a price rise because the cost of your delivery has gone up so much that your margin has been squeezed. Let me give you an another example. If you run a Pilates service, so you might be a physio that teaches Pilates or you might be a pastor’s instructor. And you might say to me, Well, I have 12 classes a week, Katie, and I teach 48 weeks of the year. Okay, so you have the potential to do 576 classes in a calendar year. Now, you might say to me looking at last month, last year’s expenses, it cost me 60,000 pound to run the business. Now, if you do 60,000 divided by 576, that means it is let me just do the maths on that 60,000 divided by 576. I wish I could do that in the head 104 pounds per class to run. I’m just gonna let that sink in for a minute. Because when I run this, I run a session on on price rising again, you can go to our Facebook community and listen to this. And I go through it in detail with some slides, which makes it easy for you to absorb. But people were absolutely mind blown about what margin they’re actually making. And everybody left the call and decided instantly that they needed to put their prices up. So it’s costing you as a partisan structure. If you teach trial classes a week, because you’re 60 grand a year, it’s costing you 104 pound to run each class. Now, you might say to me, I can get 15 people in my class, and I charge each of those people 12 pounds. So you have the capacity on each of your classes to get have a revenue of 180 pounds. We’ve just worked out it costs you 104 to run. Okay, so you are making a 76 pound gross margin on each of your classes. So 76 pounds, okay, some of you might be really happy with that some of you might think actually, that is not going to 76 times 576 means that you make about 44,000 net profit in the year gross net, because I’m not taking your tax off. Okay, you might be happy with that. But that’s the level of detail that you need to know to work out whether or not you’re making margin and whether or not the cost of delivery is going up and that your margin has been squeezed. And you have no other option, but to put some prices up in your business. But what this also tells us is that if it costs you 104 pounds to run your class, how many people do I need in that class to break even? So if you say you charge people 12 pounds for the class 104 divided by 12 means that you need 8.6 Now we cannot have a point six of a patient or a client so let’s say nine so you need nine people in your classes to break even. So that could mean that you could look at your timetable and think well any classes that are running that are nine and below are losing me money. Therefore we’ve got a business decision. Do I I keep those classes running, or do I need to merge them? Do I need to put prices up? Do I need to actively market to get them to a profit making status. So some ideas in terms of increasing your margin is to have more activity in your premises. So look at how much downtime you have. I’m not suggesting that you will need to just work more hours, okay, most of you that I speak to are really time poor, you’re really busy for the CO owners as it is, you’re already working lots of clinical hours. But it might be suggesting that actually, you need to make your time in your space more more effective, more efficient, more productive. So we can get that space working for you. Rather than you just only being the person that works in it. You could offer expand, think about other things that you could have within your business. Diary management, this is something that we see all the time is that people are really inefficient with their diaries. So in COVID, most of us had 25% downtime on our diaries a day for cleaning, because we were gapping by 15 minutes. If you look at that over the day is 25% of time lost. Can you now squeeze that? Can you now change that? Can you add in ad hoc 15 minute breaks if you need to, but not every after every patient? Making sure that if you’ve got admin team that they’re managing your diary effectively, so that you are working as efficiently as you possibly can. For example, if a member of staff starts at eight in the morning, and your your admin book them in a session in at 815, might seem silly, but you’ve lost 15 minutes of doubt of time there and of revenue. So getting your admin team to work for you as well. You could have more classes, that’s an obvious an obvious point. You could add get more clients, you could get more staff. Now that will increase your cost your overheads, okay, but you want to be able to see at what point did those stuff then make you a lot more money. You could find cheaper suppliers, and you could charge more. So a price rise in your business, I can probably guarantee that most of you it is an absolute must. And it must be dictated by your margins. Figure out your margins first, before you decide how much you’re going to price rise. Don’t do it by 50 P, don’t do it by 75 P. Okay, everybody’s expecting everything to go up, you will probably be one of the only businesses that aren’t praying about price rising. If you don’t, how do you price rise? You set a date, you just decide when it’s going to happen. You communicate that to your clients in a real professional way. Be really, really clear with your communication. Just justify it through value. Okay, what will it allow you to do by increasing your prices in your business it might be that you want to invest in a new machine, it might be that you want to invest in a new piece of programming for exercises, it might mean that you want to bring on a new speciality that means people are going to be impacted and they’re going to benefit from having a women’s health specialist join the team. Avoid essaying I’m not even sure if that’s a word, but you know what I mean, don’t just go on and on and on and on. And don’t keep Don’t apologise, don’t say sorry, just it is what it is justify through value and be human be you personalise it wherever you can, okay, most of you are the faces of your business people want to see your face, they want to hear it from you, and set a deadline, set a deadline for when this price restriction is going to put in place and give them a call to action. One of the nice ways that I like to do it in our business is that we say to recognise your loyalty as a one of our loyal current clients, we are giving you the opportunity to buy X amount of sessions keep it small, less than five upfront at your current price by x date, and then it that the price rise will kick in. What that means is by the time by the time to come and pay again, they’ve forgotten what the price was anyway. So today’s session is talks about margin how we can make more money in a recession. And I hope you found some of those tips really useful. The other thing I’ve talked about is Leads Leads leads leads it is so important. And next week on next week’s episode, I’m going to be talking to you about your next move in marketing what you need to be doing in marketing right now to get clients through the door. This is perfect if you don’t know what you need to be doing in your marketing, if marketing to you feels expensive, feels like it doesn’t really work. Maybe you’re saying that you know word of mouth work for me. Why can’t it just work for me again? You might say I’m rubbish at marketing. You might worry about putting yourself out there. You might hate social media, or you might be spend loads of time on social media, but it’s not actually delivering more inquiries and more leads into your business. This creates this unpredictable business it means that we can’t wait we’re so worried about what’s going to book in for the following week, we’re worried about what if people stopped booking in, we’ve got that fear of failure, we’ve got that fear of putting ourselves out there because of imposter syndrome and what people might think of us. Now, next week episode is going to talk about your next movie marketing. But I want to share something very exciting with you that at the end of March, we have got a a brand new course launching for you as a business owner who hates marketing thinks marketing expensive, don’t know what marketing you should be doing. Spending loads of time procrastinating around your marketing, and have got that fear of failure fear that imposter syndrome, worried about where your bookings are going to come from worried about that sort of unpredictable income stream that you might have. Now, if you want to join the waiting list to know about this course first and join our, our waiting list to be the first in because we’re only going to have so many places on this how to get more clients in one day, we are going to do it all in a day. I know that sounds crazy. But you are time poor, you are really busy business owners, we are not going to stretch this out over weeks, we are going to get it and action it and implement it in one day. So I’m going to be asking you to take one day out of your clinic, I’m going to tell you when it is we’re going to be lots of notice. But we are going to do it between half past nine and half past three in one day. It’s going to be intense, it’s going to be great. So if you want to be the first to know about our course it’s going to launch at the end of March The tune is going to be two dates that you can choose from. It’s going to talk about how to get more leads and inquiries and clients in your business in just one day. Then go to the show notes just underneath this, this podcast and there will be a link there for you to join our waiting list. Thank you for joining me on today’s podcast. I have loved talking to you about numbers and margin. And I hope you just take one thing from this and go and implement it in your business. I look forward to chatting again on next week’s 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 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.
Katie – Jane Team: 32:42
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 jane dot app. We’d love to meet you and see if Jane is the right fit for your practice.
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