Top 10 Financial Tips to Grow Your Practice
While your primary focus is providing excellent client service, it's important to understand how to optimize your business for profitable growth:
1. Create a business plan:
While it’s best to create a business plan prior to your launch, it’s never too late to outline your mission, vision, target market, ideal client and offerings to ensure that your business decisions align to your core values. A well-thought-out plan will include competitive analysis, marketing strategy and financial forecast, which will each evolve over time.
2. Set competitive pricing:
Revenue = price * volume
Conduct market research to determine competitive pricing for your products and services. Consider offering package deals or memberships to encourage repeat business and secure steady cash flow, and discounts or special offers to attract new clients and fill up slower time slots. While you want to remain competitive, ensure that your prices cover your costs and provide a reasonable profit, or income if you’re a sole provider.
3. Optimize capacity:
Revenue = price * volume
Review your schedule, systems and service offerings to ensure you can manage client volume and maintain ideal utilization. Low capacity leads to less income and potential operating loss, while high capacity leads to burn out.
4. Develop a realistic budget:
Develop a realistic budget that begins with revenue based on your pricing and estimated client volume and then accounts for all fixed and variable expenses, including payroll, marketing, rent and any other operational costs. Review your budget regularly and make adjustments as needed to ensure that your expenses increase in alignment with your revenue. If this feels overwhelming, or if you are seeking financial benchmarks, I recommend hiring a finance professional to support you.
5. Monitor cash flow regularly:
Keep a close eye on your cash flow by monitoring your income and expenses regularly. I recommend using accounting software or hiring a professional bookkeeper to help you maintain accurate financial records and identify any cash flow issues early on.
6. Plan for taxes and legal obligations:
Familiarize yourself with the tax obligations and legal requirements specific to your industry and location. Consult with a tax advisor or attorney to ensure that you comply with all relevant regulations, including licensing, permits, sales tax collection, and employee payroll taxes (if applicable). I highly recommend setting aside funds for taxes throughout the year to prevent financial strain come tax season.
7. Invest in marketing strategically:
Allocate a portion of your budget to marketing efforts that effectively reach your target audience; I recommend between 1-10% of total revenue. Utilize a mix of online and offline marketing channels, such as social media, email marketing, search engine optimization (SEO), and local advertising. Track the performance of your marketing campaigns to identify what strategies yield the best return on investment (ROI).
8. Focus on client experience:
Happy practitioners = happy clients
As an avid consumer of health and wellness services, and based on my healthcare experience, the key to client retention is experience. When the practitioner treats their clients kindly, and holds a safe space, it impacts their perception. It is equally important that each touchpoint of the experience, from scheduling to payment, is met with ease.
9. Set specific, measurable and time bound goals:
Setting business goals is important to your success, and how you set goals is critical. I work with my clients to ensure they outline clear objectives in a set time frame, and have a metric they can measure to grade performance.
For sole practitioners, your goals may look different than a business with multiple employees and locations. For example, stating, “I want to earn 6 figures” sounds like a great goal, but how do you get there? If you specify, “I will earn $10,000 in April by charging $250 per session and seeing 10 clients per week,” it sounds more achievable. Plus, you can measure your income by reviewing your rates and client volume for that month.
As you grow and operate a larger business, it is important to set key performance indicators (KPIs) to measure your leading vs. lagging indicators. You will want to understand your sales funnel, each step of the client experience and how your pricing, capacity and cost structure vary by offering, and then set success metrics to forecast outcomes. For example, a KPI may be monthly utilization of 70% per practitioner to ensure optimal capacity, which you can measure with a report from your practice management software or EHR.
10. Continuously evaluate and adjust:
Regularly review your financial performance to assess the health of your business. Identify areas for improvement and adjust your strategies accordingly. Stay adaptable and responsive to market changes, emerging trends, and customer feedback to ensure the long-term success and sustainability of your wellness and health business.
By implementing these financial tips, you can strengthen the financial foundation of your wellness business and position yourself for growth and success in the competitive health and wellness industry. Remember that sound financial management is essential for realizing your business's full potential and fulfilling your mission of promoting health and well-being within your community.
