Has the cost of operating a practice gone up?
About a year ago, we were struggling with our office space. For several weeks, the coffee maker wasn’t readily available, so I started stopping at Starbucks on my way in.
A venti nonfat latte was $4.86. We soon moved into a new office space, and I was happy to have my coffee machine back in working order, so I started going to Starbucks only occasionally. The next time I went, my latte was $5.14. A few months later, it was $5.26. This past Saturday, it was $5.38. That’s roughly an 11% increase in less than a year.
Not that big of a deal, really. I can make my own coffee for less than a dollar. And I do that most days. But it’s indicative of the way our world is changing. Everything costs more.
Supply chain. Staffing issues. Recovering from COVID-19 restrictions. Just about every business that exists has, or will, experience inflated expenses.
What can you do about it? How do you change the way you do business to account for these increases? Try these suggestions.
Raise your price
This is obvious, but it’s the easiest way to combat the inflation you’re dealing with in your own books. Your clients may not agree that you need to raise their rates, so make it more enticing by adding other services. At my practice, we call it, “You want fries with that?” We look for services they can use that they aren’t currently paying us for. We try to show them the value of the new service, and then add it to their monthly fee.
One of the obvious ways to keep great talent is to increase their salaries. But if you’re worried about the conditions being unstable, try quarterly bonuses instead. If you give someone a raise, you’re committed to that number. If you give a bonus based on revenue or profit, it’s more fitting to your actual finances.
Many people would actually prefer to receive a bonus all at once instead of a slight increase every week. It just feels good to get $1,000 in one check instead of $83 a week. Sure, the math is the same, but the appearance is enticing.
Studies are suggesting that benefits are more important than raises. Some people would prefer more time off. Also, look for benefits out of the standard. Health and life insurance are great, but how about exercise bonuses? Offer a payment for gym memberships or exercise classes.
So many people stopped going to offices that landlords were offering delicious deals to get people into their buildings. That has now changed and rents are increasing, as we return to being out in the world. Sharing space is a good option. Are you a bookkeeping service? Partnering with a CPA or an accountant can be a boost for both of you.
Sharing rent is great, but sharing clients is even better. About three years ago, I got to know a CPA in my building, and now his referrals make up a nice chunk of my revenue. It’s a huge benefit for him as well because when he starts the tax return for our mutual clients, the books are ready. He doesn’t have to do any work in them, and that makes him very happy—as well as saving him time!
There are thousands of time-saving apps available to help run your practice. Analyze the cost of an app against the time well spent on bigger picture items.
Let’s take QuickBooks® Time, for example. Your client has people who are paid by the hour? If there are only one or two, a paper timesheet is not a big deal. But more than that? You definitely need an app that will sync directly to payroll.
“Work smarter, not harder”
My father used to say this to me, and I’ll admit that I didn’t get it when I was young and foolish. But today, I’m eager to find all the smart ways to do things. Anything that saves me time or money is a smarter way to do things. By the way, time IS money.
The world is changing. Prices are changing. The way we do things is changing. Jump on the bandwagon and change your attitude, along with your practice.
And don’t forget to take the time to enjoy a very nice cup of coffee.