About six months into my first private practice, I took a rare day off and went to the fair with my friend Mary Lou. Mary Lou had been a big-time consultant and really understood business. While I was enjoying her company that day, I must admit I was peppering her with small business owner questions.
“Business has been really slow. I’ve decided I will stop the bottled water delivery and the fresh flower delivery to my practice. I spent about 10 hours over the weekend trying to figure out what else I could cut in order to meet my expenses,” I told her.
Mary Lou took a bite of her chocolate covered cheesecake, smiled a knowing smile, and gave me some of the best advice I’ve ever received.
“Casey, I’m delighted that you are looking at your expenses. It’s important to review and evaluate your expenses and see what type of return on investment you are getting. With things like fresh flowers and bottled water, it’s a little hard to tell but I’m guessing that these things make your clients feel special and it makes coming to your office a nicer experience.” She went on…
“I think once a year it’s a great idea to look at every single expense and decide what type of value – joy or money – that expense brings to you. Once a year.”
I was stunned. I had been doing this exercise weekly if not daily for the last few months.
Then I understood when Mary Lou said, “take the energy you’ve been focusing on reducing your expenses and spend that time and energy on increasing your income. That’s the real secret. You can only reduce your expenses so far before either you or your clients feel deprived. Spend your time – at least 30 minutes to one hour a day – focusing on new business. Do your networking. Do your speaking. Do what you know works to get new clients. And if you don’t know, go learn it.”
That was in 1996 and I’ve never forgotten it. So how do we implement this advice today?
Once a year my Operations Director, Amber and I take our entire list of expenses and a big sheet of paper and basically start over. We ask ourselves which expenses we absolutely must pay in order to run the business. This usually includes the office rent, our credit card processor, our Internet hosting, and the two of us.
We then evaluate every other expense (or expense category) from last year and decide if it brings us enough money and/or joy in order to keep it in our spending plan for the upcoming year.
And after that? Time to walk our talk and get marketing.
How about you? What is your next step to increasing your income – especially if business is slow?
Love and blessings,
PS Mary Lou was also instrumental in introducing me to my-then-future-husband Bob. But that’s a story for another day.