I hope you’re well and your week has been a good one.
Radiant Business School is half-way through and this week we had a workshop on the topic of money.
Money is such a hard topic to talk about, and we had two whole hours on it.
There are several truths that always come up when talking about business finances with a group of homeopaths.
Here are the two most important ones.
High overheads reduce our profits.
We find it hard to charge a fair price for what we do.
Today I’m going to talk about how to pay yourself more by reducing your overheads. :-)
How to pay yourself more Part 1: the truth about overheads
Business overheads include room rental, remedy purchases, books, courses, stationery, wifi, phone, networking lunches etc.
Last year I read a very inspiring book, Profit First by Mike Michalowitz.
Mike Michalowitz talks about businesses being ‘cash eating monsters’.
He states that if you are not taking home at least 50% of what you are making, then your overheads are too high, or your prices are too low, or both.
When I read the book I realised this was absolutely true for me.
While I was building my business I had allowed my overheads to creep up so I was only taking home around 40% of my earnings.
This had to change.
I started by reducing my overheads.
I realised that books were a huge weakness so I removed my bank card details from Amazon. I started a list of books I want to read instead. (Saving, around £70 per month.)
I banned myself from buying any more stationery until I’ve used what I have. (Saving, around £20 per month.)
I removed subscriptions that weren’t absolutely necessary. (Saving, around £50 per month.)
I cut back on my room rental by reducing my prepaid clinic hours and moved my ‘discovery calls’ on my schedule to a time when I was at home. (Saving, around £150 per month.)
I resisted the temptation to attend conferences or sign up for seminars unless they were directly related to my niche, and set myself a budget of £400 per year. (Saving, around £500 per year.)
I asked clients to return their 30ml dropper bottles so I could sterilise and re-use them. (Saving, around £30 per month.)
I reduced my mobile phone plan to a SIM-only contract. (Saving, around £10 per month.)
I paid the annual ARH subscription as an early bird, all in one payment. (Saving, around £50 per year.)
Closed my Lloyds Business Bank Account which was incurring £15 per month bank fees. I switched to Starling Bank.
Total Savings
£375 per month
(based on previous spending)
These savings were not quite enough to bring me back into a 50% profit so I knew I still needed to increase my income.
(More on that next week.)
Valuable overheads
Gettimely booking system*. I use it to set up invoices, send a link for card payment, offer packages, keep track of my income, send SMS messages to clients as well as email, and automatically add client email addresses to my Mailchimp. (£30 per month.)
I like working from a clinic as I don’t have an office at home. I currently have 20-25 hours per month at my local clinic that has re-opened. (£270 per month.)
Xero online book-keeping system. (£24 per month.)
I love the paper mailing bags from Kilby as everything that my client touches is important to me. I stopped using plastic in my practice several years ago. (30p per envelope.)
Branding and web design. I invested in new branding and website last year because I knew my old website was really out of date and not looking good on mobile devices. I had new photos taken too. This helped me find the confidence to work in the city and I started to attract more people working in law and financial services and through looking at the reports inside Gettimely I can see the investment has already paid for itself many times over. (£2000 invested last year - as a ‘one-off’ payment, this is not an on-going expense.)
Professional accountancy fees. Every year I complete my accounts and my accountant submits my tax return for me. She gives me great advice and saves me money. When I remortgaged a few years ago I was able to use my official accounts and that was very helpful. (£384 this year.)
*Affiliate link to Gettimely - if you use this link, you receive 2 months half price.
Over to you
Total your income from the last six months.
Total your outgoings on your business.
Calculate the percentage of your income spent on overheads.
Is it more than 30%?
If so, it’s too high, according to Mike Michalowitz.
Questions to ask yourself
How much of your overheads was spent on essential ‘cost of sales’ such as remedy envelopes etc?
How much was spent on nice-to-haves such as books, further training or equipment?
How much was spent on hiring expert services to save you time or money?
How much was invested in elevating your business such as having professional photos or website?
It is tempting to justify business expenses but ask yourself which are non-essential if you are not able to pay yourself at least 50% of what you earn?
Your overhead saving options may not be the same as mine.
Just remember, the percentages tell the truth about where your earnings are going.
Q: In case you are wondering where does the other 20% go?
A: Saving for profit (holiday pay etc.) and to pay taxes.
Money is one of the topics I’m always happy to talk about, and you can ask me anything you like on the monthly paid-subscriber-only webinar for just £7 per month. :-)
This week’s links
How to tidy your desk
Short and cute video with Marie Kondo showing us how it’s done.100 couples share their secrets to a successful relationship by Polina Marinova
This brilliant article with crowdsourced advice for happy relationships has a reference to the 5 Love Languages, listening and emotional intelligence. All highly useful skills to build client relationships also.Why cutting prices is a bad idea from Fortune.com
This article talks about ‘maintaining price integrity’ which is interesting.Feminine energy: What productivity is missing by Lauren Valdez
As a creative person, I’ve really had to work on my logical, technical side so it is good to read this article which values intuition. You might also like to read this post from her husband.This week’s just trust me.
YRB School Save the date (s)
Thursday 13th August, 9 am
Free webinar to find out more about YRB school
Thursday 13th August 10 am
Early bird opens
Saturday 5th September 10am
Early bird closes
Saturday 26th September 10 am
Doors close
Monday 28th September 9am
YRB School begins
New! Effective Homeopathy for Hayfever (revisited) Save the date
Thursday 10th September
If you have previously attended one of my Hayfever webinars, you will be invited to attend free of charge.
Thanks so much for reading!
In case you didn’t know, you can also find me on Instagram.
And, if you are new, or curious, scroll down to read more about who I am and what I do.
Have a great week!
Tracy
FAQs
The YRB website is being re-designed which is why it’s not easy to get the answers to your questions. I’m hoping for it to be ready by the end of August.
Who are you? I’m a homeopath with a background in teaching and mentoring. My B.Ed. and M.A. were both in education and my first career was in primary teaching. I was an assistant headteacher with responsibility for mentoring newly qualified teachers.
What is Your Radiant Business? I set up Your Radiant Business initially as a blog with my friend Lulu Kitololo who is a graphic designer. She and I were both interested in how to develop branding and marketing for therapists. We are still friends, but she is no longer involved as she moved back to Nairobi and has her own business there.
What is Radiant Business School? It’s a course I designed over four years ago. My goal was to offer guidance for homeopaths who want to get started/be busier/modernise their practice. RB School covers boundaries, money, basic SEO, and how to find more ideal clients. In the last four years, more than 100 homeopaths have completed the course in its varying forms. I have rewritten it entirely this year and the current group is trialling the new format. I always ask for feedback and it evolves in response to that. Radiant Business School will run once more in 2020, starting on September 28th. Doors open in August, and there’s an early bird, with a free mentoring session for the first 10 people who join. I will set up a webinar for you to find out more in the next few weeks.
Do you have a membership? What’s that about? Meaningful Marketing is a one-year membership with an online community (not Facebook) and it has courses on writing, photography, newsletters, and blogging. It is a very lovely space with a group of warm and supportive homeopaths. We have regular webinars together, which feels like an on-going conversation as we have all got to know each other. It opened for the first time in 2020 and there will be another one in 2021. Places will be limited and in order to join, you must you have completed Radiant Business School during 2020. If you think you may be interested in joining the membership for 2021, you will need to have completed the Radiant Business School, or if you previously took the course, you will need to have repeated it by November when the doors open. I will set up a webinar to find out more in the next few weeks.
I’ve heard you do homeopathy webinars? Yes, I do, on topics that I feel I have some knowledge worth sharing. Here are the links. You can pay and watch, and email me for the notes. Hayfever, Acne, Chronic Fatigue, Women’s Sexual Health, Miasms and Nosodes.
What is mentoring? Mentoring is one-to-one support for you and your homeopathy business. For new people, I ask for a commitment to a minimum of three monthly sessions. At the moment, I don’t have any spaces, but I keep a note of anyone who is interested and get in touch when space opens up.
Why do you write so many newsletters? I love to write and I also believe that I can reach people best in this way. I am willing to share things I’m learning in my practice, in the hope that others can benefit.
What is the paid option? There is a £7 per month paid option with a monthly ‘ask me anything webinar’ for paid subscribers. I currently have four paid subscribers and this month I received questions about preparing for a photoshoot, among other things. I’m happy to talk about anything!