THIS POST INCLUDES:
1. Calculating your Reiki practice profit
2. Increase income
3. Reduce expenses
4. Develop a strategy to make a profit
5. Free Download Expenses Worksheet
CALCULATING YOUR REIKI PRACTICE PROFIT
The topic of this article is about increasing PROFIT which is different to INCOME.
Income refers to the exchange of money from a customer for the exchange of your products or services that you offer in your Reiki practice. If you are selling Reiki sessions then your income refers to what your client gives to you at the end of their session.
In business, you will also incur expenses, which are the costs associated with running your business. Examples of expenses are rent, advertising, internet, wages etc.
Now that we have a definition for income and expenses, you can calculate your profit which is what you have left after deducting your expenses from your income.
Now that we have these terms explained, the rest of this blog post will explain more about how to focus on increasing your profit. As previously explained, the calculation of profit involves both income and expenses. Therefore, to increase profit we need to adjust either the income or expenses in the equation to increase the profit amount.
Below are a few ways you can increase your income:
- Diversify your income – introduce new types of products or services. If you currently sell Reiki sessions, you could offer group sessions, workshops, Reiki training sessions, ebooks, physical products, or products associated with Reiki.
- Seek new clients – finding new clients can involve exploring new networks for referrals. You should understand how your current clients found your Reiki practice and pursue those pathways to find more clients.
- Seek new markets – if you only work with individual clients currently, you may want to provide group Reiki sessions, or undertake corporate and community based wellness sessions.
- Increase your prices – determine if your pricing for your Reiki services are reasonable. Maybe you are undervaluing your work and can look to increase your session rate. If you’re not comfortable increasing your session rates, you could raise your rates for after hours work or charge premium rates for specialized services eg. corporate.
- Eliminate unprofitable products or services – eliminate any products or services that are not profitable from your Reiki practice. For example, if you currently offer night sessions but have to pay higher rates of childcare or costs to keep your office open, then this time slot may not be profitable. You might consider removing the after hours service and use that time to develop other profitable products or services.
- Improve your client experience – this can include offering flexible payment options, car parking, flexible hours. All of these things may keep your clients coming back to you as well as result in word of mouth referrals that bring you more clients.
Collaborate – consider collaborating with other Reiki practitioners or wellness professionals to offer workshops.
Below are a few ways you can decrease your expenses:
- Review all expenses – set a goal to achieve a 5-10% reduction. Some examples:
- Review merchant fees on credit card processing
- Review insurance requirements for office equipment and consider raising your excess to reduce premiums
- Review any salary related costs eg. Insurance, retirement, health insurance etc
- Review any monthly subscription costs and decide whether an annual payment will save you money or whether to cancel or suspend the services for a specific period. You can subscribe again when your profit improves.
- Review ongoing admin costs such as rent, internet, communications, cleaning, office supplies etc.
- Call all of your suppliers to negotiate costs or ask for early payment discounts. You won’t receive unless you ask!
- Redesign workflows – review the process of how you book a client. Is there a way to save your time or staff costs? Any time saved can be directed to tasks that will produce additional income.
- Eliminate tasks – Examples include running your business electronically, and save printing and paper costs. This is especially relevant if you print receipts, invoices, or intake forms.
DEVELOP A STRATEGY TO MAKE A PROFIT
Trying to improve your business profit can feel like an overwhelming task when there are so many components to managing your Reiki practice.
If you have an office manager or other staff member, you can share some of the tasks mentioned above to help increase your income or reduce your expenses. If you are a sole practitioner with no staff assistance, then the task of improving profit levels rests with you.
As your time and energy are limited, you should plan to review your income and expenses strategically so that you can make the most significant impact on your profit in a short period of time.
If you have a set of financial statements work through each item on your profit and loss statement and write a priority number against each expense or income item that you feel contributed the most to your profit levels. The priority number you allocate should be based on both the financial impact as well as the ability to improve the item. An item might have a significant financial impact, however, you may not be able to make changes to the cost of an item and therefore that line item will remain a low priority.
A simplified example is shown below with the priority number written in front of the item name (1 being the highest priority) :
- (7) Client sessions – this item was prioritized as low as the Reiki practitioner felt they had already reached their maximum load of clients and their rates were already reasonable. Even though this item is rated as a low priority to make changes, the business owner should still review if any smaller changes can be made such as ensuring no money is outstanding from client work.
- (1) Group work – this item was prioritized high as an additional income stream. Set a goal to add one group Reiki session per month and build upon this depending on the impact to profit in 6 months.
- (6) Internet – this item was ranked low in priority as it was recently reviewed and had already been changed to reduce the costs.
- (2) Rent – this expense was the most significant cost. Ideas to reduce rent were to rent out any unused space to other professionals. Review commercial rents in the surrounding area as a comparison and use this to negotiate the next lease.
- (3) Insurance – even though the cost of insurance wasn’t high, this item was rated as a high priority as the amount could be reduced by paying an annual premium (discounted rate), increasing their excess/deductible and decreasing their coverage.
- (4) Software subscriptions – this item was ranked in the middle as the cost could easily be reduced by paying annual subscriptions and cancelling some subscriptions.
- (5) Advertising – this item was ranked low in priority as the current advertising spending was accurate. A review can still be conducted to determine if any improvements can be made.
Once you have ranked the priority of each item, you can set a goal over a month and review one item at a time to see if you can make any improvements to your profit.
As a business owner, the above process of reviewing your income and expenses should be done on a regular basis. At a minimum, an annual review is suggested, however, quarterly or semi-annual reviews provide you with an opportunity to make changes sooner.
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