Massimo Gaetani writes:
When we consider this concept within private practice we can mention, among cost of sales the hire of a venue to supply your therapies and the direct cost of advertising. Most people in private practice would love to have a queue of clients waiting in front of their door but, most of them, don’t have it.
I was chatting with one of our therapists earlier this week and she was complaining, despite having a fully booked schedule, about the cost of her online advertisement. I was curious so I asked how much the advertising cost was and how much income the advertising was generating. The answer was respectively £240 and £2400 per month, while working one day per week. My immediate answer was that I would love to play a game where I get £10 every time I spend £1.
From her point of view a 10% direct cost of sales was too high and she would love to earn the same amount of money without spending a penny; fair enough, but unreasonable. So I explained that with adequate marketing and the correct image she could probably raise her prices by £5 or £10 per session and further increase her profits. By the end of it she was satisfied that having a medium-high net income, without costs, would be great but it’s just no practically possible and agreed with me that she is in a good position from a business point of view.
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