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Do you make data-driven decisions in your business? Are you worried that there might be some financial leaks in your business? What can you do today to make a change to build a business that’s financially sustainable and strong from the inside out?
In this podcast episode, Joe Sanok speaks about money leaks and what to do about it with Lauren Colson.
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Meet Lauren Colson
- Common money leaks in practices
- Stay on top of your cash flow
- Financial growing pains to be aware of
- Lauren’s advice to private practitioners
Common money leaks in practices
If you’re going to understand where there are money leaks, you first need to understand numbers, which is essentially the story behind your business … In order to know your numbers, you have to have timely and accurate financials. (Lauren Colson)
Some of the places where practices commonly have money leaks are in: 1
– Software expenses: perhaps you tried a free trial of the software and they started billing you after some time, and it just keeps running quietly from your bank account until you cancel it.
If you have a team and you’re using different systems, make sure you have something in place for your off-boarding process to remove licenses from different software because you don’t want to pay for 10 licenses a month if you’ve only got eight people on your team. (Lauren Colson)
2 – Not paying in full: sometimes if you make bulk payments for software, you can get up to a 40% discount for the year, instead of paying monthly.
3 – Unoptimized marketing systems: if you are not tracking your ROIs on your marketing strategies, you could be spending hundreds or even thousands of dollars a month on marketing that may not even be converting efficiently.
Make sure that when you are spending marketing dollars, you understand what you’re going to get in return, and sometimes in the beginning especially if you’re doing it yourself you may not know, [so] you gotta test the waters … But you’ve got to come back to the data and you’ve got to see what’s working and what’s not, and if things are not working then you’ve got to shut ‘em down. (Lauren Colson)
Stay on top of your cash flow
Another major way that many businesses and practices lose out on money is by not being fully on top of their cash flow.
Either they are losing money by not requesting payments owed to them, or they are losing money by having to pay late penalty fees if they don’t stay up to date with any payments that they need to make.
You also need to make sure that you know what your future estimated cash flow looks like so that you can plan.
You want to know if you’re growing; “Do I have enough cash to invest in the next team member?” Or if you’re a seasonal business; ”We have a lot of cash now but is that going to get us through our slow period over the coming months?” (Lauren Colson)
Your cash flow is a massive indicator of what is possible, and what decisions you can make for the business.
Financial growing pains to be aware of
As your practice grows and becomes bigger, money can also get lost in the admin. Keeping good systems also means getting better at tracking money. When your practice grows, be sure that you keep track of the money that is owed to you.
Follow up with clients and insurance businesses alike so that you receive your payments so that you can pay your staff and keep the business running smoothly.
Remember that financial literacy is the key to your ability to pivot and make needed decisions that relate to the sustainability of your business.
There’s so much power in being able to look at a bad month and learn from it, and see; “What can we do better?” (Lauren Colson)
First, try to understand what is causing it to be a bad month and what you can do about it before trying to plug up the leaks by just hiring more staff and signing up more clients.
When it comes to money in your business, work from the inside out, otherwise, all the money that comes in will just leak through.
Lauren’s advice to private practitioners
Know your numbers! And then use them to make the best decisions for your business.
Sponsors Mentioned in this episode:
- Find out more about the Seven Figure Club!
- Visit practiceofthepractice.com/mentaya to learn more and get started for free!
- Save the date for Level Up Week: March 11-14, 2024!
Useful links mentioned in this episode:
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Visit Colson Strategies and connect on LinkedIn.
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Email Joe at [email protected] to suggest guests for the show
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Meet Joe Sanok
Joe Sanok helps counselors to create thriving practices that are the envy of other counselors. He has helped counselors to grow their businesses by 50-500% and is proud of all the private practice owners who are growing their income, influence, and impact on the world. Click here to explore consulting with Joe.
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