That may seem a harshly-worded question, but many professionals and other business owners focus too narrowly when it comes to growing their practice or business and it costs them dearly.
Often we’re so busy that we just focus on the ‘next thing’ that we can see we need to do. Like ‘get more clients’ or ‘do some marketing’.
Although focusing on one thing at a time has its upsides (you can get it done and implemented without getting distracted or overwhelmed), this approach can be risky.
Risky because you’re putting all your eggs in one basket and relying on ‘one thing’ to sustain and grow your business or improve your profits.
When a new client comes to me to get help and advice to grow their practice, I always tell them that they need to focus on the 3 Essential Elements of a Profitable Practice or Business.
When you focus on all three, you only need moderately good results in each area to get a great result overall. Because the results in each area will work together to have a compound effect on your overall profitability – increasing it significantly more than if you just improve one element.
The 3 Essential Elements of a Profitable Practice
You need to attract a consistent stream of enquiries from the right kinds of clients if you want a more profitable practice or business.
If you don’t have a consistent flow of enquiries from the right kinds of clients then you normally have one of two challenges:
- your enquiries are unpredictable, so it’s feast or famine, or
- you attract too many enquiries from the wrong kinds of clients and spend all your time talking to prospective clients but don’t get many clients as a result. (In this scenario you end up spending too much time trying to get clients and don’t have enough time to do the client work when you do).
But when you have the right kind of business development and marketing activities that attract the right kinds of clients, you get a steady stream of enquiries from potential clients who are prepared to pay your fees and who value your service. This makes converting them into paying clients much easier.
To have a profitable practice you must be able to convert enquiries into paying clients with a good success rate. If you only convert a low percentage of enquiries into clients, then you’ll be wasting the enquiries you’ve worked so hard to get. Good potential clients will be slipping through your fingers. The result is a high cost (in time or money or both) to get each new client.
Too many professionals and other businesses ignore their conversion rate and continually focus on getting more enquiries. It’s a costly mistake.
When you improve your conversion rate, you’ll get more clients from the same number of enquiries, meaning you won’t need to spend so much time or money on business development and marketing activities. And when you have a reliable system for converting enquiries into clients you’ll also eliminate the randomness factor – where you’re never quite sure why someone people become clients and others don’t. You’ll get predictable results.
Once you have clients, you should (ethically and professionally) maximise the profits you make from each one. This doesn’t just mean charging more – there are at least five different ways you can improve the profits from existing clients without raising your fees. Start by asking yourself ‘how else can my existing clients benefit from the services I offer?’.
If you don’t maximise the profits you get from the clients you already have then you’ll be ignoring the biggest opportunity in your business. And if you don’t increase profits from the clients you have, you’llhave to keep your focus on getting new ones – which generally costs 7-8 times more than getting more work from an existing client (and is much harder work).
So why not focus instead on making more of the clients you have. You don’t have to keep chasing after new clients at the same rate and can spend less on marketing to get new clients. You’ll also be be less dependent on getting new clients as a way to grow your business.
Why are all 3 essential?
You can grow your business or practice using any one of the above elements of Attract, Convert and Maximise. But it’s much harder to grow using just one or two, because you need bigger results from each one. That often means taking bigger risks with your time or your money.
It’s much easier, and safer, to make smaller improvements in all 3 areas and see them add up to a bigger result overall.
Of course you have to be able to get clients first, before you can maximise the profits from the ones you have. So if your practice or business is in its early stages, you willneed to start with Attract and Convert. But don’t be short-sighted – the sooner you start to maximise the profits from the clients you already have, the sooner you start to benefit from the compound effect of improving all three elements of your business or practice and the sooner you’ll increase your profits.
When you’re ready to work on all 3 Essential Elements then the first thing you need is a Profitable Practice Action Plan. So you know what to do, in what order, to get the best results.