Spending money for your practice can be fun! It can also be stressful. As a business owner, I tend to be skeptical when it comes to new expenses because I feel I’ve wasted money in the past on continuing education courses I never used, advertising that didn’t bring in any clients, and equipment that gathered dust. The problem is I’ve passed up opportunities to invest in my business because I didn’t see their value.
These choices become clearer when we have a process to determine if something is worth investing in or not. Some business goals can be achieved on the cheap while others require a large output of cash. Consider these questions to help you decide.
HOW MANY CLIENT VISITS WILL IT TAKE TO PAY FOR?
Calculating your cost per client visit is simple. Divide your average current monthly expenses by your average number of total appointments per month. This is your cost per client visit. To find the number of client visits needed to pay for a new expense, divide the amount of the expense you’re considering by cost per client visit.
This may seem like extra work but knowing your numbers takes the emotion out of spending decisions. If your investment won’t be bringing in more clients or income, it will come out of your profit. A new one-time expense can be absorbed over time. An ongoing expense will require you to raise prices or see more clients to maintain your current level of personal income.
WILL IT MAKE YOU MORE MONEY?
If an expense brings in more money, it’s an investment. These are the things we want to be purchasing. Expenditures are good investments if they have the potential to attract ideal clients, retain current clients, or allow you to charge more. If there’s a contract involved, find out if there is an option to cancel before the term is up in case it doesn’t live up to expectations.
WILL IT SAVE YOU TIME?
For any service that charges by the hour, time is money. Since the time available to earn a living is finite, saving it on other tasks creates extra time to see more clients, take care of ourselves, and enjoy life! Bookkeeping software and online scheduling fall into this category. There may be a learning curve that requires more time up front that will pay dividends once you’re up and running.
WILL IT ENHANCE YOUR CLIENTS’ EXPERIENCE?
Simple, inexpensive things like a space heater or fan, table warmer, and softer lighting make a big difference in client comfort. Be critical of your treatment area and pay attention to client comments to make their experience the best it can be. Continuing education and specialized equipment can be pricey. When in doubt about how much you’ll actually use them, ask your clients if they want these services before you buy.
DOES IT SUPPORT THE BIG PICTURE OF YOUR PRACTICE?
It’s easy to focus on the earnings per client (what you charge minus cost per client) when making business decisions. Take a step back and look at your long-term practice goals. Often what seems unacceptable on a “per client per day” basis makes more sense when we consider how that will play out in the months and years ahead.
Risk is part of being an entrepreneur. Pay attention to how what you’re spending effects your practice and let the numbers be your guide. Don’t be afraid to let go of what isn’t working and try something else. It’s better to bail on an idea that sounded great but isn’t producing results than to throw money away while hoping things will turn around. Taking the time to evaluate how a new expense will affect your business will increase your confidence and decrease regrets.
Cath Cox has been a licensed massage therapist in Colorado since 1999 and is the creator of the Booked and Busy in 90 Days System™. Her mission is to heal the world by inspiring independent massage therapists to build thriving practices of their own so they can work authentically for as long as they desire. She currently provides Ashiatsu barefoot deep tissue massage exclusively in her private practice. You can learn more about Cath and her journey at cathcox.com.