WHAT ARE WE DOING TODAY? 1 Business Development with a specific - - PowerPoint PPT Presentation

WHAT ARE WE DOING TODAY?

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Business Development with a specific focus on:

Marketing Financial Management

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In Australia, the new business failure rate in the first four years of operation is?

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ABS data from 2008-2012 show that just

• ver half of new small businesses failed in

their first 4 years

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Why?

Lack of experience Wrong location Poor cash flow

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The 2 primary reasons for poor cash flow:

Lack of effective marketing Poor financial management

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What gets between the average CAM practitioner and business success?

Failure to recognise that we have 2 relationships with a client- a therapeutic relationship and a business relationship Concerns that ethics and commercial success are incompatible and that marketing is dishonest Failure to focus on the business side of the clinic Failure to realise that if we don’t make money, we can’t keep doing what we love- healing people Lack of confidence in our worth Thinking that marketing is about being an extrovert Assuming that people will beat a path to our door just because we open a clinic

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Marketing is about 1 thing and 1 thing

• nly…

COMMUNICATION

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Marketing is critical to the success of a CAM clinic, particularly in the first 5 years of

• peration. BUT, it should never be forgotten

that on average, it costs 6 times more to attract a new client into the clinic, than it does to maintain an existing client. So, while new clients are important, maintaining our existing clients is even more important.

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The tasks for the marketer are to:

• 1. Have an aim
• 2. Work out what you want to communicate
• 3. Work out who you want to communicate with
• 4. Work out how to communicate it
• 5. Work out what it’s going to cost (in time and

money) and if you can afford it

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The aim?

The aim of marketing in most cases is to improve cash flow. But for us this needs to be quantified in terms of increasing our client intake. It also needs to accommodate: Launch strategies Growth strategies Strategies used to: Maintain your current market position Capitalise on new opportunities.

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Before you do any of this it’s useful to conduct market research…

Who is your market? Where are they? What do they want? How can you communicate with them?

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Who is your market?

The primary consumer of complementary medicine services in Australia is female, aged 20-60 (peaking at 35-49), is middle class, born in Australia and are well-educated. Research from 2011 has shown that around half of this population has used or will use the services of a CAM practitioner within a 12 month period. This is our primary demographic segment or target market. The type of data that’s used to determine these statistics is demographics. Secondary consumer segments that we may wish to market to could include people recovering from sporting or other forms of injury, or those with persistent pain such as lower back pain, headache, insomnia, post-operative nausea and vomiting, allergies, fatigue, depression and anxiety, digestive disorders, including IBS, infertility and menstrual disorders . Note that if you’re going to do segmental marketing via email, that you don’t breach the Privacy laws or Anti-Spam laws.

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What do we know about them that will influence our marketing methods? Psychographics:

They’re health conscious They’re time poor They’re the primary decision-maker in the family for healthcare

• ptions

They’re concerned about the health of friends and relatives They’re internet savvy and influenced by what they find there They’re influenced by the healthcare experiences of friends and relatives They use CAM for chronic illnesses and prefer “natural” generally over drugs Prefer prevention to treatment They want a healthcare provider that they can relate to, will listen to them and take the time to get the job done properly They’re motivated to get well and will contribute to the process They usually research their health issue before seeking therapy Is there anything peculiar to the local market you want to work in that you need to know about?

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Is there anything peculiar to the local market you want to work in that you need to know about?

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Where are they?

Everywhere to a greater or lesser degree depending on the geographic location you choose to work in and the nature of your practice. For most clinics, the local area or marketing area can be defined by driving for around 10 minutes in every direction from the clinic, marking these distances on a map and drawing a circle made by these points around the clinic. This is the area from which you’ll source most of your clients and is referred to as your marketing area. Doing any marketing outside this area may be a waste of resources. Do you have enough of the target demographic living locally to satisfy your needs? How do you know?

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Here’s an example

For a clinic being set up in the middle of Parramatta: ABS data from 2011 states that the population within a 10 minute drive from the centre of Parramatta (from places such as Carlingford, Dundas, Ermington, Harris Park, Northmead etc) is 162,000. 22% of these are tertiary educated, 70% were born in Australia, 68% are aged 20-60, 47% are female, 40% are middle class. So around 10% of this population or 16,200 form your primary demographic segment within this region. How many of these people do you need to see per annum to run at a profit? Is this population enough?

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Where do you get demographic data from?

Other businesses dealing in healthcare

Councils ABS

The ABS census statistics can be useful in analysing the population characteristics of the marketing

• area. The national census occurs every four years and provides details on:

Age Background Language spoken Employment status Housing status Family type (couple or single parent etc.) Number of children per household and their ages Level of income Whether the dwelling is owned or rented Numbers of those working and unemployed Numbers of those working full time, part time, or casual Type of occupation Educational background

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What do they want?

UK research via the NHS has shown that acupuncture is most frequently used to treat:

Sporting or other forms of injury Persistent pain such as lower back pain Headache Insomnia Post-operative nausea and vomiting Allergies Fatigue Depression and anxiety Digestive disorders, including IBS Infertility and menstrual disorders

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What do they want?

Australian research data from 2011 tells us that CAM users generally are afflicted with the following health complaints at least once every 6 months: Headaches 48% Colds 45% Stress 37% Musculo-skeletal pain 34% Weight issues 28% Hay Fever 28% Allergy 25% Flu 23% Anxiety 23% Diarrhoea 23% Depression 19% Hangover 17%

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What do they want?

Treatment that either has a long history of successful use or is perceived as such

• r has had widespread fame for success in clinical trials

Cost-effective treatment Safe treatment- free of risk or side effects Preference for natural or perceived as such Fast treatment Clinically effective treatment- cure vs palliation Convenience of treatment- local, easy parking, easy to find, located near some other reason to be there, e.g. shops, school, gym, uni etc Healthcare delivered by a qualified and experienced practitioner Some sort of familiarity or feeling of connection with the practitioner or the practice

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How can you communicate with them?

To determine this we need to know about their habits. If you want to market your services you need to know where to present your marketing. How are you going to get their attention? It’s useful to be aware that the average Australian is exposed to around 5000 marketing messages every

• day. So, yours needs to stand out.

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Marketing Tools- which ones to use?

TV Commercial radio/Community radio Letterbox flyers Newspaper ads- print and digital Magazine ads- print and digital Community notice boards Signage- fixed and mobile Clinic brochures Business cards- a portal rather than a tool Yellow pages/White pages- print and digital Local lectures Local promotional activity Website Internet forums Email (as long as it doesn’t breach the Anti-Spam laws) Internet-based business directories (Natural therapy pages, Yelp etc) Youtube/Vimeo/Webinars etc Social Media- in 2013 69% of Australia were on social media SMS Blogs- make them relevant, brief, use grabbing header, sub-headers and a hook, remember keywords, use content curation Ebooks Podcasts Face to face/networking groups etc- the elevator speech

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A couple of things about websites

Don’t expect anyone to click past your home page Have your contact details on your home page Keep your home page download size to a minimum to avoid slow downloads- Google ranking punished slow downloads Road-test your content with your demographic Monitor activity regularly with Google analytics and act on what it tells you- know your landing and exit pages, time spent per page, bounce rate etc Keep changing it Keep your downtime to a minimum Check your links regularly to ensure they’re not broken Keep it topical Test your website across all browsers- most websites are written on Firefox or Chrome and may not necessarily open on Internet Explorer Make it easy to navigate Avoid spelling or grammatical errors Make it relevant- use your content to answer questions your demographic are asking Don’t be afraid to use testimonials Display your pricing

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Don’t duplicate content from another website- it’ll drop your Google search ranking Use images and video- research has shown that 65% of a viewer’s time is spent looking at graphics and 35% is spent on text If you use video, keep it brief Use your photo and a relevant biography Use keywords through your home page content Use all the elements discussed in the construction of your marketing message SEO rules! Know your keywords and use them Breed links Do an SEO audit of your site- Google your keywords, see who comes up and it it’s not you, why not? Add your site address to your YP and WP listings Add your site address to all marketing tools Construct your own site only if you know what you’re doing Don’t leave it at just a web page but if you must do this, make sure you have CMS control

• ver it

Register all versions of your domain name

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What’s the average website viewer looking for?

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A couple of things about Yellow Pages

Once someone starts looking in the YP, they’ve already decided that they want to see an Acupuncturist, so a large part of your marketing job is now done. So make the ad visible and just use the essentials- suburb, address, phone number and web address. Hours/days that the clinic is open are good if you have the space Single line entries are free, any more than this will cost you Bigger is better Online YP rules but its effectiveness is directly related to how much you pay for it Make sure your web address and phone number are enlarged

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A couple of things about social media

Facebook, Google+, LinkedIn, Tumblr, Twitter, Instagram and Pinterest. They are generally free As at 2013, only 27% of small businesses had a social media presence and 12 million Australians had a Facebook account, spending an average of 6 hours a week on it US research from 2013 showed that 24% of respondents had bought a product after reading about it on social media. The key is knowing which platform your demographic “hang out” on. Use search facilities to find posts you can interact on- e.g. Google search for “is acupuncture ?” and reply via social media Know who you are and what you want to say before you say it Check out the competition Always fill out the ‘About’ or ‘Information’ and “Category” sections of any social media

• platform. Use words or phrases that describe your business and are also terms

individuals would use to search for your business and always include your clinic address Don’t always talk about yourself- use 20% promotional, 80% non-promotional Use your business name or web address when signing social posts Add social share buttons to individual pieces of content on your website or blog Be consistent Post daily Avoid spelling and grammatical errors

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Be shareable Always focus on your marketing message Use your business name as your Facebook page name or Twitter name Keep it interactive Link it back to your website, podcasts, blogs, Youtubes etc Be honest Don’t feed the trolls Communicate in the same way as your demographic- write comfortably not formally Use images when it’s appropriate Respond immediately Keep it topical- see what’s trending and comment on it in a way that highlights your marketing message Make it relevant- voice an opinion on relevant breaking news and why what you’re saying is important Make it attractive- make the experience valuable

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Costs of various advertising media

TV Channel 7 Sydney Sunrise $2305 for 30 seconds Sunday night football $512,000 for 30 seconds Channel 10 Oprah $1300 for 30 seconds Radio 2KA (C&W) Western Sydney $20 for 30 seconds ROS Newspapers Local paper classifieds- $40/issue News Corp Digital Editions

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What’s your marketing budget?

Industry experience has found that just to maintain your market position in a moderately competitive commercial environment you should consider investing 6-8% of your gross income in marketing, and during times when you wish to grow the business, this investment should increase to around 12-14% of gross income. Industry research has shown that every dollar spent on advertising generates 3 dollars in revenue.

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If you’re going to advertise, remember that on average it takes 7 repetitions to get noticed and 3 more to generate action

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Work out what you want to communicate- constructing the marketing message

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The marketing message needs to focus on your competitive advantages

These may consist of things like: Your qualifications The results you’ve had in practice Membership of professional associations and what that means Any helpful affiliations or associations you have Books you’ve written or any affiliated work you’ve done How long you’ve been in practice Anything that’s attractive about your clinic location- proximity to points of attraction etc The modality you practice and anything unique about it that makes it attractive Anything that makes your use of that modality uniquely attractive Anything you do that overcomes any fears that people may have about the modality you practice- e.g. needles They need to be demonstrable and measurable

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The marketing message needs to be relevant to your demographic, not to you. Go back and think about what they want, not what you think they want or what you’d want if you were them. The view you should take with your marketing is from the outside in, not the inside out.

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Don’t focus on the process you use in practice- focus on its advantages to a potential client. Sell the result, not the process. If you’re working in hardware, you don’t market an electric drill, you market the hole it makes. If you’re selling real estate, you don’t market a house, you market the lifestyle it offers the buyer.

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So, don’t sell acupuncture.

Use what you know about what the demographic want. Sell a system of healing… that’s been good enough to not only survive but flourish

• ver more than 5000 years

that works faster than just about anything else that’s drug free that’s been clinically proven all around the world that won’t interact with drugs that can be used at any age that’s painless that’s economical compared to the cost of orthodox medical treatments that won’t produce side effects

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Anticipate any potential concerns that clients may have and address these in your marketing message. For example, potential clients may have concerns about

Cost of treatment (including healthcare rebates) Needles- pain, infection risk etc Safety of treatment- free of risk or side effects Speed of treatment Effectiveness of treatment- cure vs palliation How easy is it to get to you Your qualifications Regulation of your profession Local issues- parking etc

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In summary, an effective marketing message will combine the advantages of the modality with your

• wn competitive advantages, address any

potential concerns, and be matched against the needs of your demographic. Keep it simple, direct, relevant, and use the language of your demographic.

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Match what you can deliver with what your target demographic needs- ensure that you’re the only

• ne who can meet those needs

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The marketing message doesn’t need to be stuck

• n a fixed issue.

You may have a core message regularly transmitted e.g. primary competitive advantage and slogan You may also market messages of a more seasonal nature e.g. hay fever season In general, your marketing needs to be constructed to do four things: Get the person’s attention Appeal to their needs Offer an attractive solution to those needs Provide a means of contact Remember to use the same language of the demographic, reflect the attitudes

• f the demographic and aim your marketing at the lowest level of

understanding within the demographic sector

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Road-test your marketing BEFORE you use it and be prepared to modify it

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Monitor your marketing- what’s working and what’s not?

Always ask clients where they heard about you and record this

Do any marketing media need an overhaul or retirement? Are you getting referrals from an unexpected source? Review your strategy regularly Monitor events within your marketing area for any threats or opportunities and adjust your marketing counter the threats and capitalise on the

• pportunities

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Week Website Y/P Facebook Twitter WOM Total 1 10 5 2 1 3 21 2 8 6 3 4 21 3 5 4 1 2 5 17 4 9 2 3 3 17 Total 32 17 6 6 15 76

Get acquainted with the advertising regulations:

It’s an offence to: Falsely represent that goods are of a particular standard, quality or value. Falsely claim that goods or services have the sponsorship or endorsement of an individual or organisation. Falsely represent the price of goods or services. Falsely represent the origin of goods. Falsely represent the need for any services or goods. Falsely represent any warranty or guarantee relating to goods or services. Charge the higher price when more than one price appears

• n an item held out for sale- the item must be sold

for the lowest price shown.

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For the first 12 to 24 months of practice, marketing will generate most of your new client

• intake. After this, word-of-mouth referral will

become more dominant but your marketing will still bring in around 50% of new clients. So, referrals from existing clients need to be encouraged and need your focus.

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Maintaining current clients- Climbing the Loyalty Ladder

The ladder of loyalty model involves the following: Target market - a business’s most valuable target market starts at the bottom

• f the ladder.

Prospects - the next rung on the ladder lists actual prospects within the target market. Clients – advertising and promotion of a business to the target market and potential prospects attracts clients. These are first time buyers of the products/services of a business. Repeat clients – moving up the ladder of loyalty, satisfied clients become repeat clients. Loyal clients – by rewarding clients, they may eventually become loyal clients (i.e. they would not choose to buy your product or services from any other supplier). ‘A’ grade client – the last rung to the ladder. Loyal clients with continued satisfaction become ‘advocates’ for a business (‘A’ grade clients). They are the most profitable form of marketing in that they are literally an unpaid salesperson for a business.

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For most small businesses, 80% of their income is generated by 20% of their clients (Pareto principle). These 20% are your A grade clients and you need to focus your efforts on building their

• numbers. Know who they are and treat them very

well!

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Getting Clients up the Loyalty Ladder

Treat every client as if they’re the only client you have Make the clinic experience rewarding and valuable Get them involved in their treatment- engagement is critical Ask them for feedback about their clinic experience Enquire about the health of friends or relatives Reinforce your marketing message Check up/tune up reminders Give them something to take home Reward clients for referrals and increase the reward value with increasing referrals Generate a loyalty program Maintain contact and make it valuable- birthday calls and Christmas calls or emails, emails or social media contact with items of interest to them, emails with material that’s relevant to their condition Segment your existing client base based on their condition, location, interests etc and email or tweet items that’ll be attractive to this segment ALWAYS deal courteously, professionally and thoroughly with client complaints

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Financial Management

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Financial management is about 5 things: Maximising your income Minimising your expenses/debt/inventory Monitoring Avoiding nasty surprises Budgets

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Maximise your income

Get good clinical results Prioritise your time Make every marketing dollar work Increase your prices annually Keep your clients and walk them up the ladder Minimise cancellations- always remind clients 24-48 hours before Check your mark-up

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Minimise your expenses

Unless you employ staff, the biggest considerations here, are: Tax Inventory if you sell medicines or other products Rent or other costs associated with the place you practice from Technology and utilities Debt servicing

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Minimise your tax liability

Superannuation Pay all outstanding bills before 30 June so you can claim them for that year Home office Vehicle Self education Professional library Trading stock- write off expired stock If you’re cashed up this year, prepay next years insurance, rent etc Ensure that your records are accurate and reliable- check that you’ve recorded all expenses and income Asset register

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Inventory management

Buy from one supplier- less time managing accounts, better negotiation power Check your order when it arrives as well as the use-by dates Email or fax rather than order over the phone Be wary of buying “specials” Buy stock just in time Outsource your inventory to local pharmacies or health food stores

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Debt management

Consolidate debt- business loan, student loan, personal loan etc- consolidate to reduce admin costs and make it easier to manage Shop around for a better interest rate Think about interest-only repayments in the short term Work out a debt minimisation plan and stick to it

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Technology and utilities

Lease rather than buy Check your phone and internet data plan Do you need a land line? Shop around for power plans

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Monitoring

Of all of the aspects of financial management, a detailed awareness

• f your current financial position is probably the most important.

Priorities

Gross income Imminent expenses Profitability Liquidity of the business Expenditure per client Break even Stock levels Stock expenditure Performance against budgets

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Cash flow- income and expenses

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Expenses Date Income* Stock Misc** Wage Marketing Tax Total Bal. Aug 1 600 250 50 300 300 Aug 2 785 785 1085 Aug 3 320 320 1405 Aug 4 450 450 1855 Aug 5 560 525 590

• 555

1300 Aug 8 750 250 50 450 1750 Aug 9 150 150 1900 Aug 10 1125 1125 3025 Aug 11 225 225 3250 Aug 12 600 100 590

• 90

3160 Aug 15 825 250 50 525 3685 Aug 16 375 450

• 75

3610 Aug 17 600 600 4210 Aug 18 675 675 4885 Aug 19 525 1650 590 3750

• 5465
• 580

Aug 22 1050 250 50 750 170 Aug 23 750 750 920 Aug 24 750 750 1670 Aug 25 900 900 2570 Aug 26 750 400 590

• 240

2330 Aug 29 600 250 50 300 2630 Aug 30 975 975 3605 Aug 31 375 375 3980 Total 14715 2175 2200 2360 250 3750 3980 3980

*Includes medicine sales and consultations ** Includes rent, loan payments and utilities

Expenditure per client

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Week Beginning No. Clients Seen Expenses Expense per Client % Change on Previous Year 1 Aug 2012 15 726 $48.40 100 1 Aug 2013 24 1008 $42.00 86.8 1 Aug 2014 35 1415 $40.43 96.3

Break Even

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Break Even

Say, for example, that you charged $70 for an initial consultation and $50 for a follow-up. Without any consideration for therapeutic goods sales, this would mean that your average income per client was $60. To continue the example, say that your total weekly expenses were $480. This would mean that you’d need to see 8 clients ((480/60=8) to break even, or cover your costs. If you wanted a gross weekly salary from the business of $1000, you’d then need to see 24.6 (1480/60=24.6) or 25 clients per week.

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Cash Flow Forecasting- Avoiding nasty surprises

Know what’s due to go in and out and when Record forward requirements for training, rent, phone etc and estimated income Track your income and calculate forward for your GST and tax liability and make sure that these amounts are available when required Calculate forward for rent, utilities expenses, personal expenses and any large expenses that may be required for the next 12 months and ensure that these amounts are available when required

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Cash Flow Forecasting- Avoiding nasty surprises

Macro

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Income Expenses Goods Consult Total Total Expenses Net Cash Flow Opening Balance Closing Balance July 5350 10700 16050 8550 7500 4350 11850 Aug 4960 9755 14715 9990 4725 11850 16575 Sept 4750 9500 14250 6240 8010 16575 24585 Oct 4275 8550 12825 6990 5835 24585 30420 Nov 6750 13500 20250 9990 10260 30420 40680 Dec 1475 2950 4425 6240 (1815) 40680 38865 Jan 2375 4750 7125 7509 (384) 38865 38481 Feb 4500 9000 13500 9990 3510 38481 41991 Mar 5500 11000 16500 6240 10260 41991 52251 Apr 5750 11500 17250 6990 10260 52251 62511 May 4625 9250 13875 9990 3885 62511 66396 Jun 6500 13000 19500 6240 13260 66396 79656

Cash Flow Forecasting- Avoiding nasty surprises

Micro

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Wage Marketing Misc.* Stock Insurance Rent Total July 2557 1200 2233 2000 560 1083 8550 Aug 2557 200 1483 2000 1083 9990 Sept 2557 200 1483 2000 1083 6240 Oct 2557 200 2233 2000 1083 6990 Nov 2557 200 1483 2000 1083 9990 Dec 2557 200 1483 2000 1083 6240 Jan 2557 200 2233 2000 560 1083 7550 Feb 2557 200 1483 2000 1083 9990 Mar 2557 200 1483 2000 1083 6240 April 2557 200 2233 2000 1083 6990 May 2557 200 1483 2000 1083 9990 Jun 2557 200 1483 2000 1083 6240 Total 30684 3400 20796 24000 1120 12996 95000

*Includes utilities, loan, tax, and sundries

Budgets

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Month Gross income Eexpenses Gross profit Budget target % of Budget* July 16050 8550 7500 7000 107 Aug 14715 9990 4725 5000 95 Sept 14250 6240 8010 8000 101 Oct 12825 6990 5835 6000 97 Nov 20250 9990 10260 10000 103 Dec 4425 6240 (1815) 3000

• Jan

7125 7509 (384) 2000

• Feb

13500 9990 3510 3000 117 March 16500 6240 10260 11000 93 April 17250 6990 10260 10000 103 May 13875 9990 3885 5000 78 Jun 19500 6240 13260 11000 121 Total 170265 94959 75306 81000 93 *this is the gross profit expressed as a percentage of the budget target