Grow Your Therapy Business

Ok if you are thinking… “I don’t need to know this”… I hate to break it to you but it is crucial if you are serious about your business.

What do I mean by contribution?

If you have rented a room at a clinic you have to pay for that clinic whether you use it or not. These sort of costs that stay fixed whether you do 2 sessions or twenty are called ( not surprisingly!) fixed costs.

What are all your fixed costs?

In addition to fixed costs there are costs that go up as the new of sessions ( sales) go up… for example couch roll, oils etc. These costs are called variable costs as they change depending on the number of sales made.

So if you take the sales price for each session ( say £38) less the variable cost of each session (say £3) you are left with the “contribution” of £35 for each session. Why is it called a contribution? Because it is a contribution to fixed costs. So your first sales will be making a contribution to fixed costs and when that cost is covered ( called the break even point) you start making a profit.

To work out your break-even quantity divide the total fixed assets by the contribution per session. If your total fixed costs are £700 in a month, taking the contribution per session of £35 you will need to do 20 sessions in a month just to break-even ( £7,000 / £35). It is only who you get to the 21st session in the month that you start to make a profit.

What is your break-even sales quantity?

When you have different products or services you can work out a contribution for each product or quantity and calculate the optimum contribution to cover your costs. Thus you may have a contribution per session of £45 for each hour and a half session for say aromatherapy and £35 per hour session for reflexology. Thus the contribution per hour if £35 for reflexology and £30 for aromatherapy. If you are restricted to the number of hours you can rent a room in a clinic the optimum contribution would be to maximise the reflexology sessions.

What is your optimum contribution for each product or service?

Obviously the more products and services that you have the more complex the interaction is…. but it is worth having a sense of which product optimises contribution so if you have a clash of resources you can make a better decision based on real figures.

The more information you have about your optimum contribution the better decisions you will make and the better financial results you will get.

Good luck.

Inevitably we start as vendors ( or experts for hire) to our customers, but how do we make them become fans or a long term trusted client partner in the jargon?
The aim of all selling is long term client or trusted partner.
How do you become a long term trusted client partner?

It obviously takes time to start breaking down the barriers and distrust of a new supplier, especially if your customer was loyal to the previous supplier.

1. We start by understanding our customers.. what they need what makes them tick…. this shifts to us being able to make suggestions and set the agenda.
2. We consistently over-deliver on our promises and
3. we are seen to be collaborating with our customers ( even in the context of therapists this can be seen as jointly attacking a problem.. so we seem to be tackling it together).
4. we listen to their concerns and take those into account and adapt as necessary.
5. we provide a specialised ( unique) service that the can only get from us.
6. we have a sense of shared values

In larger firms there needs to be many layers to the connection including engagement at the executive level.

The really interesting thing is that research has shown that sometimes mistakes are made, some that could potentially affect the relationship we have with our customers…. the critical factor as to whether it destroys our relationship or strengthens it is the response to a problem… does someone take on the clients particular problem and actually go out of their way to solve it and communicate that back to the customer.
Research has shown that the long term client relationship can be enhanced to a level greater than if there had been no problem in the first place. IN other words we have higher loyalty than if there hadn’t been a problem.
An example of this is me with my holiday insurance – I have a loyalty to Direct Line…
When I ended up in hospital in Spain with severe food poisoning Direct Line actually permitted my partner to stay with my four year old daughter and did not charge for the extra telephone calls even though both of those were out of the normal remit. The additional cost to Direct Line was probably £350, so not an inconsiderable cost. Yet I have remained loyal because when it was necessary they actually treated us as human beings and allayed our fears when we were vulnerable. I know other people have had horror stories when they have had to claim on holiday insurance. For me it is worth paying extra to have that peace of mind.

So what are you doing to make your best customers long term trusted partners?

In the current economic client it is more crucial than ever that you become a trusted partner… even though it may be tempting to cut the budget of those “additional, discretionary items”… it may be exactly those items that are keeping your clients loyal. The critical thing to know is why they are loyal to you… in myu case with Direct Line it is peace of mind… they are not the cheapest travel insurance but I am confident that if I need to call on them I would be treated as a human being not just another claim.

What is the biggest problem of working for yourself?

Not indulging in non income generating activities. What do I mean by that? Spending lots of time on giveaways that lead nowhere and with no goal in mind. Ok you could challenge me what about these blog posts? Well the intention is that once you realise that I give real value for money and you can trust that I am genuine you will buy some of my offers ( books CDs or coaching programmes). Obviously the take up will be

What percentage of sales are from your top 3 customers ( or class of customers)?

In my local town two estate agencies have closed up and moved on. Both had had successful thriving businesses and employed half a dozen people directly and indirectly. Neither of them had just a few customers, but they did just have one class of customer, one specialised in first time buyers, one in the top end properties. Ironically the estate agency that did survive was the one that had rentals and was an agency for mortgage advice as well. In other words they had other sources of income.

In research I carried out for my book, “Set Up a Therapy Business: A Step By Step Guide” where I asked successful therapists what other forms of income they had to supplement their therapy income this is what they said.

What would you do if your top customer went out of business? Or moved away?

This is some of what the successful therapists do:

1. 
 sell other related products. If you sell to your existing
client base they will buy from you because they trust
you and you gain an extra income stream, so it is a winwin
situation. :0)
2. run workshops/ classes/ teaching. This was by far
the most popular source of other income for the
therapists, with 62% of therapists responding saying
that they run workshops or group sessions of some
kind. Again for each hour you give your time more
people can benefit. The attendees also benefit from a
reduced cost per head, so yet another win‐win
situation.
3. The next most popular solution was part time
employment. Obviously this doesn’t have to be
working for big corporates or selling out your values.
Of those who stated what form of employment they
did, it ranged from working at university, working on
reception at a clinic in exchange for a reduced room
rental, to working in a small charity. Clearly this would
not be at a high hourly rate but is in keeping with their
values and gives a regular wage coming in ( or reduced
costs).
4.  Running an unrelated or related business. Again
this can be in keeping with your values. Examples from
the therapists included running a nutrition business,
editing a well‐respected ethical paper and running a
small media company. What would have been really
interesting to find out is whether they had any
crossover from one business to the other and whether
they employed staff.One advantage of having your own business that does
employ staff is that you can “leverage” their time too.
They get paid a fixed salary and you receive their skills
for a piece of work or so many hours. It can be a
headache having staff, though, including having to pay
for them whether the clinic is busy or not, so you need
to balance the pros and cons.

   A couple of the therapists run busy clinics employing a
number of therapists. This is a higher risk strategy as it
requires more funding to start up in the first place and
they need to fill the clinic in order to cover the cost of
the premises, but it does give rental income from the
hiring out of room (plus the opportunity for cross
referral).

5. Writing. Some of the successful therapists also made
extra income writing books, articles (and websites!).
The advantage is that as well as earning an income
from the writing it also made them appear as an expert
and is free marketing. By putting your contact details in
readers can also contact you directly.
6. Learning additional therapies giving additional
options to their existing customers, or learning
additional skills within their therapy ( for example
reflexology in pregnancy).

The key to earning more than the average salary is getting
additional income streams. Don’t make yourself vulnerable by relying on just one income stream.

The above information is an extract from the report ” Successful Therapists Reveal The Secrets of Their Success” a copy of which is available at no charge from my website
 http://www.setupatherapybusiness.com

You know what it is like when you are driving a long journey that you really must take… you start by dreading it and really think Is it worth it?

Or what about if you are trying to lose weight and you have target weight but three weeks in when you are eating a lettuce leaf and would kill for a mars bar… or maybe just kill! what can you do to keep your motivation up? Say more affirmations? Just try harder?

What about if you congratulate yourself on what you have done so far…. driving a long journey promise yourself a coffee break 2 and a half hours in or when you’ve driven so many miles. Or maybe with the diet give yourself a treat when you hit a smaller milestone… maybe losing 5 pounds… and no the treat doesn’t have to be chocolate!

Similarly in business. If you have been following this series of questions you will know that you need to have a clear view of where you are going and a detail of what you will achieve within a creation time frame and you will have broken that down into annual goals, next month goals, next week goals and finally today’s tasks.

You have been doing that right?

If not, maybe you need to ask yourself how committed you are to really make a huge shift in your business… and if you have been doing a different way of keeping yourself motivated great… maybe you would like to share it in the comments box on the blog it is always useful to get feedback on what works and what doesn’t and suggestions for improvements.

Maybe you have been beavering away doing all those things… but how do you keep yourself motivated looking into the future with the goals as far away as ever? One way to motivate yourself is to take stock of where you have been and what you have achieved to date. We are so good at criticising ourselves ( and others) about the things we haven’t achieved that we forget to celebrate what we have done so far…

In order to celebrate what we have achieved to date we need information. Hard facts and figures that we measure and can compare against.

To know when to stop and take a break we need to know how many miles we have driven and how many hours we have been driving and we measure those with the odometer and a watch.

To know how we are doing with our diet we may weigh ourselves our calculate our body mass index or maybe see how many inches ( or dress sizes) we have gone down within a period of time.

Similarly in business we need to look back and see how much profit we have made, how much cash we have in the bank, how many satisfied customers we have served and compare that with what we thought we would have by now.

Ok so I am going to do my magic trick.

I would like you to answer this question:

Have you made as much profit as you planned and got as much cash flow in the bank as you anticipated?

Ok and hear is the magical answer…

You just said “no” in your mind.

Hmm sorry you are right it is not a magic trick, but there is a serious point…. we very rarely get the outcome we expect ( and if you are one of the 1% who did congratulations.. can you repeat the same or better results next time?).

Sometimes we get there but it is delayed, sometimes we get knocked off course.

The first step though is to be really clear on where you are.

How far have you come down your business road?

To answer that you will need to put together key information for your business and I recommend that you state that not just in terms of sales but also in terms of overall profit and cash-flow. If you are unclear of the difference between them do contact me about my Business Learning resources.

Good luck!

We are now half way through the questions so it is a great place to take stock of where we are.

Are you spending many hours on Facebook and Twitter and LinkedIn not to mention Youtube or Google plus ? Do you have a Facebook page and are you sending out autoresponders using a system such as Mailchimp ( which a very dear friend of mine who isn’t very technical insists on calling chipmunk)? And how many youtube videos have you uploaded?

Why are you spending hours on social media?

Everybody is telling you you must get onto Facebook and twitter etc but if you don’t know why then you are wasting your time and energy. I came across one person on Facebook the other day they had nearly a thousand friends but had not posted a status for about three months. He must have spent a lot of effort to get to that level of followers but then let them down by not following up with them and providing valuable information.

Why Do You Use Social Media?

1. to build up trust and a long term relationship with your customers. When life was completely online you could pass the time with shopkeepers and get to know who you could trust… we then to the convenience of the supermarket ( I wouldn’t recommend trying to chat to the assistants there it will probably result in you being evicted and them being docked some wages for wasting time!). Online you do not know who to trust and as we all know from the news stories of hackers and fraudsters that the internet gives them an easier opportunity to take people ” for a ride”. As you get to know and interact with people on a personal level on social media people will open up to you and drop their suspicion and guard, and when they can see the value in what you have to offer if it meets their needs and concerns they will buy from you.
2. to get feedback on new products or services. On forums I have seen people asking for feedback, to complete surveys to request samples etc. A way to get virtually instant feedback on an advert is to place alternative adverts on google’s pay per click and compare the “click through rate” on the alternatives… choose the one with the higher rate and you will have a more effective offline advert, rather than waiting to find out which works best .
3. to give immediate responses to concerns that customers have.. it is an opportunity to make good a problem. Get it wrong and you have a pr disaster. get it right and you will enhance your reputation. Stuff happens. It is often how a business deals with a problem that can make the biggest impact on a brand’s reputation… better to take a one time hit than a long term drop in reputation.
4. to have the opportunity to sell your products and services. You can promote specific exclusive offers to your list or friends, that will make them feel more special.
5. make it interesting and people will share with their friends reaching a much greater body of people than you would otherwise do.
6. to be found by the search engines such as google and drive people to your website
7. as part of a coordinated marketing campaign
8. to publicise and give valuable content to your followers/ friends circle
9. to play farmville and bejewelled and talk to your mates. But be careful that your personal messages and activity are consistent with your business brand.

How Do You make your social media effective?

1. Link up your blog posts to your social media using something like tweetdeck or hootsuite, rather than spend ages flitting from the different media. Be wary though that LinkedIn has a more professional image than twitter, so you won’t necessarily want to tweet that you’ve just eaten five beefburgers on the trot and feel sick and have that automatically posted to your linked in account. Fortunately you can choose to exclude certain posts to certain “streams” ( i.e social media accounts) using hootsuite and tweetdeck.
2. blog/ tweet/ post on topic using your key words in the copy…. but not all the time, people like to know that you are a real person.
3. interact with people on your friends list, particularly if they make relevant comments or ask questions. If a potential customer asked you a question would you ignore them and get on with what you are doing? I don’t think so… unless you happen to be one of the bar staff at my local pub of course.
4. post comments on blog forums and join groups. For example for therapists there is a new Facebook group set up by Tracy Mason do check it out.
   https://www.facebook.com/groups/BusinessSkills/?id=142597542505405
5. Be clear in your own mind about the purpose of your presence online using social media and be consistent.
6. If you find other people’s content that is relevant you can easily share or retweet that and it gives you credibility even though you haven’t spent ages writing it :0).

I have changed what I was going to write about this week as two business coaching clients have presented the same issue this week, so there is obviously something in the air!

And the issue relates to time. They are both successful entrepreneurs with a small number of employees where they still make all the big decisions and are working very long hours. We have looked at the activities only they can do and they have both agreed that that is what they need to focus on. The problem is that they don’t want to let go of anything that they currently do. Not, I have to say because they have some perverse pleasure in working very long hours or thinking that nobody can do it as well as they can … but because they said they don’t have the time/ resources to train someone up or outsource it.
The trouble is if you are genuinely going to grow the business, or at the very least get yourself some real work/life balance and control over your life ( which was part of the reason for setting up your business wasn’t it?) then you need to be able to ask yourself the following:

What are You Prepared to Give Up?
We all fill 24 hours a day if you need to squeeze something in you have to squeeze something out. Yes I know that is stating the obvious but I do see a number of clients who think they can do it all.

One way to see where you are the bottleneck ( and I promise you, as the business owner, you are the bottleneck) is to do a system diagram following the processes that happen in your business and follow where all the decisions and actions are needed with input from you.

Having worked out where the bottleneck is and knowing where you add the most value and what only you can do ( see previous post) you then need to prise yourself away from doing those activities that can be done by others that are holding you back from progressing. That inevitably means that you will have to invest time or money ( or both) rationalising and documenting the process and training someone up and being able to accept that they will not be able to do it as well as you. The biggest concern business owners have is that this will impact on the quality of service to which the question is:

What is the impact if you continue as you are?

This can be done in very specific impacts on their business, their lack of growth in the business, not meeting their goals, impacts on a personal level such as health or relationships.

Ask yourself in relation to your own business.. really be present to the pain and suffering of continuing as you are. Unless the pain of continuing is greater than the inconvenience of investing those resources now you won’t do it. Sorry but that is my experience with a number of clients.

So your task for this week is to check where you are the bottleneck and what you can do about it.

Good luck… and believe me, I know it is not easy to let go, especially when you think ” I can’t afford to do that”. Can you afford not to?

Having spent a day at BestofBristol exhibition on Tuesday it was interesting to see how many people I knew there… either as stallholders or as attendees, all business people and most I’ve met through membership of a number of networking groups.

Why do I go to networking groups?

Is it the breakfast?

No not really … I’m not a big fan of driving for an hour to have a greasy slab of soggy bacon.

It is useful to be around other people who are facing the same sort of challenges… the uncertainty of being self employed… the long hours for little reward. Sometimes it can be helpful to have kindred spirits to talk to…. and yes it is possible to get business through the networking, but it is really tedious if people try to sell to you.

I always approach networking with the aim of meeting new people and wondering how I can help them. In one networking group, 4networking I have bought a new car, changed my web hosting,

When a recession hits, as it has at the moment it is too easy to get taken up with the doom and gloom. Amazingly some of the most forward thinking and innovative companies and businesses have been set up in times of recession… and talking to successful business people the y are often told ” you will never do it”….”you want to set up a cupcake business?” ” No one wants to buy yachts at the moment, you must be mad” . And yet customers do come . They may demand better value for money or a more substantial guarantee but they can still be found… we just may need to be more creative in finding them.

Ok so off the top of my head what can you do to improve profitability?

1. reduce your break-even quantity by reducing your fixed assets that aren’t productive.
2. offer additional products or services to your existing clients.
3. Reduce your operating costs … what can you cut out. If you categorise costs into those that are legally required to do business, those that are critical to carry out business and those that are nice to have….. What can you cut out? What can you substitute without affecting customer service.
4. offer better loyalty schemes to your existing clients, or longer guarantees to make an offer “risk free” . This seems counter intuitive but research has shown this can increase the take up twofold. Personally I have not found the additional take up as high as that.. more like an additional 10% but definitely worth having.
5. reduce the quantity provided rather than put up the price ( this happens a lot in chocolate manufacturer… has anyone else noticed the size of a mars bar is considerably smaller than it used to be?)
6. look at what other successful business are doing in different markets… is there anything there you can model?
7. What other routes to market are there that you haven’t tried and tested? This could include social media, local marketing, QR codes, mobile marketing, different forms of public relations.

In essence to improve profits you need to increase sales, or other forms of income , or change the mix of produce goods and services to the more profitable lines or reduce costs. or come up with something completely new and innovative that supplies a need. Do you know if you are still meeting your clients needs? If not set up a market survey.