Does my online practice really need a business plan? | The Practice Activator

Here’s a transcript of the video for those readers out there 🙂

 (00:01):

Hello there everyone. In this Facebook live session, I’m going to be answering a question we’ve had from one of our group members in the boosting online practice group. And his question is, do I need a business plan for my online business and business in general? So let’s start with me saying, first of all, you definitely do not need one of those traditional dusty 25 to 50-page docents, which people call a business plan, and that is pretty old school.

 (01:09):

Whether you have an online health and wellness business (an online practice), or you have a traditional practice, a brick and mortar practice there will be situations, of course, where you would want to have a business plan. And that’s because someone else requires it, to get something over the line. So, for example, banks sometimes require this for a loan and lawyers sometimes require this if you’re entering into a really significant lease arrangement. Typically though you don’t need this, usually you’re just getting an accountant to sign a form saying that you’re in really good financial standing and you can pay your bills. But sometimes you will need one of those really dusty old-school docents. Now, if that is ever the case I would suggest doing what you need to do to make it happen.

 (02:06):

I wouldn’t be doing more than what I had to because of course what happens if you have a 50 page docent on either your computer or filed away somewhere? That’s just going to be buried. You’re never going to look at it again. So what’s the point? Okay. Now, while you don’t need a traditional business plan you do need to plan. So I’m going to be diving into this. And the reason why you need a plan is that if you don’t know where you want to go, then your business is going to stay exactly how it is right now. You can’t expect anything to change if you don’t know where you want to take it and where you want to go. So I’m pretty sure the person who’s asked me this question has been in business for a bit.

 (02:58):

Because of that, I’m just to spend maybe two minutes on what to think about if you’re just starting out in your online health and wellness business and then I’ll spend most of my time on those who have an established business that’s already up and running. Okay. So if you’re a newbie or if you’re planning to move into a second niche market these are some things you need to think about in terms of your planning. Okay. So first of all what is the need for my anticipated service? What problem are you actually solving? How big is the market for that problem? And of course, with an online business, your market is automatically a lot bigger than if you’re having to rely on a geographical area. Understand and plan for how you’re going to reach those customers in that marketplace.

 (03:54):

And think about why would someone go with you compared to someone else who’s already doing something similar, but they’re far more established than you are? And of course, the way to solve that is, well, how are you differentiating yourself in the market? When you’re just starting out, focus on how are you motivating people to go with your offer? How painful is the problem for your potential customer, client, patient? Is it painful enough because don’t forget that the other competitor to consider is just doing nothing at all. That’s a real option for many people, and it’s often the easiest option!. Is their problem painful enough to motivate them from doing nothing to buying what it is you’re offering?

 (04:57):

The thing to consider particularly when you’re just starting out, is what value are you actually creating? And what can you charge based on that value that you’re creating? So remember, it’s not about a session number. It’s not about one session = $200. It’s actually about the value you’re creating, because if you are just making up a figure and you’re actually overcharging people because you’re not creating enough value, people won’t come back and, you’ll feel pretty bad about that. So we need to make sure the value you’re creating is enough and that you can charge appropriately for the value you’ve created. And also what does your business and your solution look like from a ramping up perspective. And is that actually viable? So for example, if you’re just starting out, how long is it going to take you to have your books at 50% full? And how long is it going to take you before you’re running at full capacity?

 (06:01):

Then, how long is it going to take you before you’re running at full capacity and now have a six-week waiting list? And while you’re ramping up your business, do you need to supplement your income, your business income, your personal income in the short term, and is that viable? I’m going to speak a little bit more about this towards the end. Because I see people doing a whole bunch of dodgy things in this area where they actually forget to get rid of all of the crappy things they signed up for in the beginning. Also when you’re starting out or you’re moving into your second or third niche area, niche market you need to consider whether or not the buyers and the benefactors of your services are different people. In that case, your messaging needs to be different.

 (06:50):

So an example of this would be where your client, the patient/customer is a school kid. But the buyer is the parent. So the kid is benefiting. The parent of course probably is as well, but the buyer is the parent. So your messaging needs to be tailored accordingly. Some of the things that I do personally is I’ll have different landing pages depending on who the buyer is. So I’m directly appealing to the correct person and I drive traffic specifically to those landing pages. If I use this analogy, the school kid is not ending up on the parent’s landing page because your conversion rates will decrease considerably. So all the work you’re putting in all the money you’re spending, driving traffic to a particular page,won’t really be worth it for you. So you’ve got to make sure you’re being really conscious about who you’re appealing to.

 (07:42):

Now for people who are in a more established business let’s move into some categories for you to consider planning for. So where are you now and where do you want to be by the end of this quarter? The end of the year and the end of the next five years start at the end, start at the five-year mark, and then work your way backward. And obviously it’s very important that this gets written down for a couple of reasons. One – it’s really nice. When you get to the three-year mark and the five-year mark and look back at that little plan and go, “Wow, look at all, look at all the things I’ve accomplished.” This is awesome. But if it’s not written down, it’s far to easy to lose motivation and not achieve the goals that you actually really want and desire.

 (08:37):

So you might be wondering why I say five years and not two years? And the reason is really important actually. So some you want to plan for five years because some situations require you to actually plan really well. And then you can break that particular goal across the five year period. So what do I need to do today, tomorrow this year to make sure that goal in five years is actually achieved? So let me give you some examples of when you would need to do this. So say you wanted to have a baby and once baby is born, you want to be able to see 10 clients online via video as you’re working from home. And you want to be able to do that for 6 to 12 month period. This means that two years out from that occurring, you will want to have implemented all of your online marketing strategies so that you have inquiries freely coming into your life from qualified leads, this part super important.

 (09:46):

What I mean by qualified leads is leads from people who actually want to see you because of your niche because of you as a human being and because you’re online and you’re offering a very convenient way for them to see you that way, you definitely need to have the 10 clients you require while you’re on maternity or paternity leave. 

Another example, say you want to move in five years to a different state. Now you also want to be planning for that. Doing very very similar using a very similar strategy is what I’ve just described for the maternity leave. Ensure that your revenue doesn’t decrease. And in fact, I would challenge you to increase your revenue with the move to the new location. People fail really hard by not planning for stuff that is definitely going to happen.

 (10:53):

Let me give you another example. And I’m positive that you’ve experienced this. Say you get sick or you have a sick kid or a sick partner, and you need to look after them. You will absolutely need to take a sick day. This is a fact, so you need to plan for it. Let’s say the worst-case scenario is that you had to take four weeks off from work for whatever reason. The four weeks are unexpected yet expected, right? 

And over that four week period, you yourself are not generating income from your one to one client or patient sessions. But you still need to get a weekly wage. You know, you’d have to do this with an employee. If they have to take some weeks off work and they’re entitled to sick leave, you can’t say I’m not paying you because I don’t have any money in my bank account. So why wouldn’t you do this for yourself? And if you’re thinking “my weekly wage sucks”, PLAN plan to double it.

 (12:12):

This is the type of stuff that you want to be having written down. Not in a gigantic business plan, think a 3-pager plan. Include your big goals, such as How am I going to double my own personal income? And then how much revenue does my online practice or online health and wellness business need to bring in to make that happen? So I know there’ll be some people who are thinking, “Oh my gosh, double my double, my personal income. Like, is that possible?” Yeah, it absolutely is possible. I see people do it all of the time. Probably the biggest issue I see is people don’t think big enough. Okay. So now you also need to think about the skills that you need to reach these goals that you’re setting. So your five year goals, three year goals, quarterly goals. Now, are you going to acquire those skills yourself?

 (13:09):

Or are you going to outsource them or are you going to outsource some of them? Cause of course, that can end up costing a lot of money. So you need to put out a plan for that. So let me give you some examples. I heavily invested in learning the ins and outs of Facebook ads. And because the Facebook algorithm continues to change, I have to invest in Facebook advertising and upskilling myself until Facebook isn’t a thing or until another platform has a better conversion rate over Facebook. Now I can do this because I’m actually really fascinated by data and testing different marketing messages via using Facebook ads. So I’m happy to continue learning, but I’m not going to be a Facebook expert as well as a LinkedIn expert, as well as a YouTube expert. I focus on what I like and what I’m good at and I recommend you do something similar.

 (14:10):

There’s only one of you, right? So you’ve got to choose the thing that you’re naturally more happy to do and you need to consider outsourcing the rest (or eventually). So that’s my Facebook example. And if you look at TikTok, you’re not going to see me breaking out into a lip sinking dance routine. And I dare say I wouldn’t find any of my customers – you – on the platform, but, if I discover that you are on there, and TikTok has a higher conversion rate than Facebook, then for sure I’ll be on it, but I’m going to be outsourcing the whole thing. So have this in your plan.

 (15:11):

You need to plan for some of the BS that happens in business. So if I needed to switch from Facebook to something else, I need to have a pocket of money somewhere that’s going to allow me to easily do it without getting stressy. We perceive some events as being ‘unexpected’, but they are actually to be ‘expected’. And therefore, we can plan for them. Now in addition to all of that, these are some other things you need to think about in terms of your planning.

 (16:03):

If you’re currently struggling with paying yourself a decent, consistent wage every single week that at least covers like your bills, your personal bills, that needs to be addressed, doesn’t it? So who can you work with to help you fix that? So you might work intensely with your accountant for six months, until you get your finances and your accountability with your finances under control. The skills that got you to where you are right now are not going to be the same skills that you need to reach those higher level goals. It just doesn’t work that way. And this is fine, but you do need to identify what your goals are and who you need to change into to make sure that you have the skills required to be effective.

 (17:04):

Some of those skills you’ll personally gain. You’ll upskill yourself. At other times you’ll be outsourcing and someone else will, will bring those skills into your business. Most of the people I work with are solo practitioners. They’re in a business of one. Maybe they’ve got an admin. Occasionally I work with people who are in a small group practice. So I am talking about spending five grand over here, and 10 grand over there to outsource a giant skill to somebody else. You need to know what that skill is and how much it’s going to be. So you can plan for it effectively in terms of how am I going to expand my revenue this year, this financial year to make sure I’ve got the funds for that? 

 (18:03):

Plan to upgrade yourself. So many times I see people saying that X, Y, Z doesn’t work, and I can tell you that it’s not the tactics fault, it’s because that person hasn’t invested in gaining the knowledge that they need to do it correctly. You don’t become a therapist or an exercise physiologist in a day. So why do people think that they can watch one YouTube video and now become a Facebook ads manager? Plan to need different skills, because you do. Now you also need revenue goals. Your revenue must be increasing year on year. Let me say that again. Your revenue must be increasing year on year.

 (18:59):

The only time it doesn’t increase year on year is when you have grown and grown, and now you are consolidating and making your systems more efficient. You’re homing back in on who your ideal client is. So you’re not burning yourself out. You want to continue to love what you’re doing. You are likely the biggest shareholder of your business of your company. And as a shareholder, you need to expect more from your business. So why else do I say that it’s your revenue needs to increase year on year? If you did nothing else different except increase all of your rates by $3 to $10 a year across your revenue streams, your revenue would still increase. And, you must increase your rates each year to account for inflation and rising business expenses.

 (20:14):

Now, if that’s not motivating this next bit will get your motivation flowing. I know there will be people out there who is thinking “I’ve not increased my rates in like 5 years!”. Now, when I work with health and wellness business owners, nothing makes them feel more uncomfortable than having to increase their rates by 20 to 30 bucks because they’ve been putting off these smaller annual rate increases for years, there is really nothing worse. So please save yourself the pain and the discomfort and have your rate increases in your plan. Have a date every year where without fail, the rate increases. The only question is by how much? Be aiming for something like $3 to $10 unless you’re living in an area which has seen a significant economic increase.

 (21:12):

Even in a pandemic, most online practitioners need to increase their rates. And this is a big benefit of seeing people online – you’re not stuck in a low socioeconomic area – you’re able to spread your business risk more effectively.  You don’t want to be going back to someone after five years of being with you and increasing the rate by $30 a session.  As you become even more established don’t forget to review all of the ways you clients are coming into your life. That crappy insurance provider that you signed up with two years ago, when you were just starting out, which pays you like $10 after you account for all the BS, like paperwork, they need to go – now. You need to plan for that. Remember you’re the biggest shareholder your business has. If I came into your business and I saw that you’re making $10 profit for a service that you were providing, we would be ditching that immediately because you can go and work at Starbucks for $15 an hour.

 (22:56):

In wrapping up, you don’t need a gigantic business plan. But you do need to plan. I like to have these categories that I’ve mentioned in no more than a three page document. I look at mine every single week. If you don’t look at it, it just won’t work. And I literally say out loud as I’m reading, scanning this document “What am I doing this week to move a step closer to these goals?” 

 (23:54):

It’s about focusing your efforts. So please let me know if you have any questions. Pop in the comments, if you liked what you’ve heard if it gave you some food for thought, and if I was able to challenge maybe some of your old school business beliefs and thinking. 

 (24:49):

I encourage you to pick two items we’ve spoken about today to action. Get a post it and stick it on your wall and look at it every day and ask yourself: 

What am I doing today in terms of my actions or the skills that I’m acquiring to move myself and my business towards my goals?

By Alexandra Whitehead, Founder of The Practice Activator

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