Test Your Practice IQ

By Les Sweeney and Kristin Coverly
[Business Side]

Quiz time! Put away your phones and textbooks. All small business owners should know the answers to these questions off the top of their head. No looking at your neighbor’s paper!

1. What’s the current balance in your business checking account?
If you know it within $50, 5 points; 2 extra points if you know it within $20.

Les Sweeney: A logical reaction here might be, “What’s it to you?” Don’t worry—Kristin and I aren’t angling for a loan. Actually, the idea here is that as a company of one (in most cases), only you know your business. To be a successful entrepreneur, you must have a handle on the factors that determine your success. Being aware of your profit and loss (P&L) status is critical: if your account is low, it’s time to apply a little elbow grease toward filling your schedule to address the issue. On the other hand, what if you already beat your monthly goal? It might be OK to take the afternoon off.

2. Was your gross income last month higher or lower than the month before?
An answer of either “Yes” or “No” is worth 5 points; “I don’t know” or “What’s so gross about my income?” are worth 0 points.

Kristin Coverly: Gross income is the total revenue you earn before any expenses or taxes are deducted. It’s important to track how this income fluctuates month to month. An isolated one-month decrease is one thing, but a continued decline is an oversized red flag that something needs to change. Put your Sherlock Holmes hat on and investigate the cause of the decrease: is your overall number of sessions down, is the amount you’re receiving per session down (increased number of discounts, shorter session lengths), or both? Once you determine the cause of the decrease, you can create a plan of action. It’s probably time to start a new marketing push, reach out to clients who haven’t booked in a while, promote longer sessions, or add something new like a chair massage gig.

Gross income = total revenue earned
Net income = total revenue after expenses are deducted
Your taxes are calculated on your net income figure, so keep track of all your expenses: they reduce the amount of tax you owe!

3. True or False: You know what expenses you have coming up for your practice, and you have set aside money to pay them.
An answer of “True” is worth 5 points; “False” or “Huh?” is worth 0 points.

LS: So, are you planning for your license renewal, ABMP membership renewal, taxes, or other expenses? Planning and saving aren’t the most popular words in the English language, but they are two of the most important. For example, if you perform 15 sessions a week, ABMP membership and liability insurance costs about 30 cents a session. Your taxes may cost about $10–$15 per session, depending on your tax bracket. Do you put those away after every session, or every week, or ever? One of my favorite sayings is, “Fail to plan, and you plan to fail.” Don’t fail—plan!

4. What is your quarterly estimated tax payment amount and when is the next one due?
You get 5 points for knowing/having an estimated amount, 2 more points if you know when the next one is due, and 0 points for answering, “What are taxes?”

KC: The general rule is if you wrote a check to the Internal Revenue Service (IRS) on April 15 (that is, you didn’t get a refund or break even) and expect to owe more than $1,000 in tax for the current year, you must pay quarterly estimated tax on your anticipated revenue. The goal is to pay enough throughout the year so that you break even come tax time: you don’t owe Uncle Sam any money, and he doesn’t owe you any.
Trust me: these deadlines can sneak up on you and are panic-inducing if you’re not prepared! Implement a good reminder system and set money aside each month so you’re able to make your payment on time. The next estimated payments for the 2014 tax year are due September 15, 2014, and January 15, 2015. Did you already miss the first two, which were due on April 15 and June 16? Whoops! Just make larger September and January payments.

Learn more about quarterly estimated tax payments and calculate yours using the Estimated Tax Worksheet at www.irs.gov/pub/irs-pdf/f1040es.pdf.

5. What is your leading source of new clients?
You get 5 points for knowing; -3 points for not knowing.

LS: Human beings? OK, probably more specific than that. All of these questions are important, but if you can’t give a reasonable answer to this one … oh boy, that’s not going to sit well with your favorite expert business columnist and her dumb sidekick. Here are some answers we’d find acceptable: “The health club down the street,” “My kids’ elementary school,” “My website and Facebook page,” or “The blimp I hired to fly over the city.” These are just examples.
As we’ve mentioned in this column before, clients move, or their life changes, or they take a break from massage for a while. You should always be cultivating new clients, and the best place to do that is the place where you currently get your clients from. Look back at your client list and determine what their source is. What does that tell you? How can you use that information to get more clients?

6. How many clients are on your list? How many total clients do you need to fill your schedule?
Earn 5 points for being within 10 percent of your total; 0 points for saying, “What list?”

KC: Call me crazy, but my guess is your goal is to have a full schedule every week, right? Whether “full” to you means five sessions or 30 sessions, simple math tells us that unless every client comes every week, you’ll need more clients on your list than available sessions. The overall number you need will vary based on how clients fit into these categories:
• Regulars: your core clients who book consistently.
• Periodic-but-faithful: they may only book sessions a few times a year, but when they do want a massage, you’re the one they call.
• Yeti: clients you haven’t seen in so long, you’re not even sure if they still exist.
To keep your schedule full, you want to keep your regulars happy by offering great hands-on work and customer service, increase the frequency of your periodic-but-faithfuls’ visits through education and incentives, and send long-time-no-see messages to the yeti.

Your goal is to have more clients in the regulars category than periodic-but-faithful and yeti.

7. What is your clients’ preferred day and time to receive a massage?
Add 5 points if you know most of your clients’ preferences; 0 points if you answer, “But what
about me?”

LS: “Now!” That’s my preference as a client. But the end of the workday works for me. And fortunately, that works for my therapists as well.
Do you know your regular clients’ preferences? Do you log it? You should have a little database—a contact manager, spreadsheet, or notebook—that you keep this info in, so you can examine your schedule and also know who to reach out to should you have an opening.

8. What are the top three reasons each of your clients receives massage? What are their favorite techniques? Least favorite?
You get 5 points if you keep a list of this information; 0 points if you answer, “Because they booked it.”

KC: We know that one of the keys to client retention is tailoring every session to your clients’ ever-changing needs and preferences. My suggestion: ask for three goals for each session; often their second and third goals end up being just as important to them as the first.
Techniques make a difference, too. A 10-year client recently told me she loves a particular stroke that I sometimes, but not always, use and she misses it when I don’t do it. I never would have guessed she loved that little technique so much. The light bulb went on, and I asked all of my clients what their “love it” strokes are and which are “leave it.” A few extra “love its” each session equals a happy client! Moral of the story: never assume you know what clients like or want, or that they’ll tell you on their own—ask!

9. If you’ve been in practice for more than a year, what is your busiest time of year? What is your slowest? Do you know why?
Add 5 points if you know what month and/or season; 0 points if you answer, “I give massage at the same speed all year.”

LS: This is a great example of making your life manage your practice, rather than letting your practice manage your life. If you know that you always get busy in May and June, but slow in July, schedule your time off for July. When my kids were born, I remember people telling my wife and me, “Sleep when the baby sleeps.” I learned the hard way what that meant. Rest when your clients rest; although, really, your clients rest when they see you, so maybe that doesn’t truly make sense. Make hay while the sun shines. Strike while the iron’s hot. Be the ball, Danny. You know what I mean.

10. What’s the next live or online continuing education (CE) course you’re going to take?
Add 5 points if you have one scheduled; 0 points if you don’t.

KC: We’re surrounded by incredible opportunities to learn new modalities, theories, techniques, and marketing skills to grow our practices—take advantage of them! Every time you learn something new, you expand your ability to help your clients and you make your practice even more interesting for yourself. Attend a live workshop for extended training and networking with other therapists. Do an online course or webinar for shorter bursts of inspiration on your own timeline. The key is to put continuing education on your schedule in advance so it doesn’t get lost on your long to-do list behind going to the dentist and buying groceries. Aim for at least one CE growth moment each quarter. Before you tell me that’s not doable, I’m going to remind you that webinars are only about an hour long. I’ll put money down that you have an hour (or more) available every three months.
Want immediate education? Keep flipping the pages of this award-winning magazine!

Visit ABMP’s Career Development Center at
www.abmp.com/members/career_development.php to choose your next CE experience. Bonus: ABMP members watch archived webinars for FREE! 

How Did You Do?
35–50+ points: Congrats! You know your business. We’re surprised you had time to read this—oh, that’s right, you are managing your practice and allowing for free time. Good job
by you!
20–34 points: You’re getting there, but you need to work on your practice management skills.
0–20 points: Thanks for reading this. Now put the magazine down and get to work!

Les Sweeney is ABMP’s president and resident blogger. Contact him at les@abmp.com and read his blog on www.abmp.com. Kristin Coverly, kristin@abmp.com, is the manager of professional development at ABMP and teaches workshops for therapists and instructors across the country. Both are massage therapists with business degrees who care about you and your practice. Want more? Check out their ABMP BizFit video tips on www.abmptv.com.

To read this article in our digital issue, click here.