Are you Investing in Growth?
Understanding the language of money can be a difficult process. You started your practice to help people but maybe didn’t realize how many business and financial choices you’d be faced with on a daily basis.
As a business owner, you should be reviewing your profit and loss statement at least once per month. This statement allows you to spot check the financial decisions you made over the past month for the organization. Below are 4 key categories every business needs to invest in and properly categorize on their profit and loss statements. If you have transactions that do not fit into one of these categories then you might be spending money instead of investing money.
Category 1: Leadership
Ensure you’re investing into leadership and developing new skills as a leader on a monthly basis. An organization rises and falls based on leadership. Therefore, you should see investing in yourself and your company leaders as an investment that can make you more money over time.
For example, you or someone on your team should be investing into 1 piece of training collateral per month. This could be something as simple as a leadership audiobook or online course. Either way, investing into this category is giving you the new resources and ideas you need to grow your business!
Category 2: Brand Awareness
You are likely doing some amazing work by improving the lives of every client you work with. If this is true, then more people need to know about you and your business! This is brand awareness.
Brand awareness is the consistent process of marketing yourself using various platforms so that more and more people come to know the amazing business that you run. Investing into this category on a monthly basis should make your business more and more money over time.
For example, try to pay yourself or someone else to spend 4 hours per month creating and posting content that help your clients (or potential clients) address their daily pain points in a meaningful way. A small investment that pays off in the long run.
Category 3: Customer buy in
You may not think about yourself or your staff as a sales team but in order for patients to keep returning week after week for therapy, you’re doing an excellent job at sales! Creating brand awareness isn’t complete without a plan to turn people who are knowledgeable about your business into faithful, paying customers. There are numerous techniques to help you close sales faster and at higher rates. Spending money on resources, systems and sales trainings is an investment into your entire business!
For example, analyze the amount of leads (new referrals) you received this month who also converted to active patients. Try to determine where those leads might be dropping out of the process and not converting into full time patients.
Category 3: Products & Services
Your products and services are what allow your business to run. As a business owner, you’re always in the process of assessing ways to increase revenue or decrease the cost. Make sure this is a monthly activity based on real data.
For example, you could pay an outsourced financial consultant or CFO-minded bookkeeper a monthly fee to analyze your P&L in such a way that you can see the following:
● Your most profitable product
● Your cost of obtaining new leads
● Your cost of obtaining new clients
● The amount of money it takes to collect revenue from each client
Learning to structure your P&L in a way that helps you see how you are investing into all of the categories listed above can really help you get a clear picture on how your business is doing and set you up to ask the right questions that could lead to actions you can take to grow your company and help more people!
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