An email this week comes from one of our APHA members, who I will call Bernice, who reminds me of how easy it is to lose sight of what is important to us when it comes to building our advocacy practices.
Bernice is in the process of entering a business plan competition which, if she wins, will provide her with a $10,000 grant to help her grow her practice.
Her concern is, that in order to win the money, she is going to have to write a business plan that’s about “going big.”? From her email to me:
“We have retired execs who are mentors, and they
just don’t see how I’m going to go “big” with this business.”
So she wanted to know if I have suggestions for how to build that in.
“So, as I push forward to make this a “winning” business plan entry, what do you see as the most viable way to monetize our businesses to take it up several notches?”
A few important points for all of us to consider:
Bernice is asking about two aspects of growing a business: monetizing and scaling. Monetizing simply means finding more ways to maximize the income from the work she is doing. Scaling refers to the growth of a business – more products or services, more employees, more customers and of course, bigger income to support all of that (and hopefully more profitability too.)
To which I say… whoa! Wait a minute! Who says any of that is important?
Now, at first I expect you’re reading those words and laughing. Of course they are important! (you’re thinking.)? Who doesn’t want their business to make more money and to grow bigger?
To which I will respond… Making more money? Of course. But growing bigger> Maybe you DO and maybe you DON’T.
The answer lies within your own goals.
When you decided to become an advocate, what picture of your own work did you have in your head?
- Did you picture yourself as the advocate – the person doing the advocating> Do you see yourself working hand-in-hand with your client to improve his or her outcomes?
- Or do you see yourself as the business administrator> You take the calls, make the sale, negotiate the contract, send the invoice, call to collect if it hasn’t been paid, handle the marketing, attend the networking events…
Any advocate who has been in practice for any length of time knows that when you are starting out, you are both the advocate and the administrator, in almost equal measure. When you have one, two, or three clients, you spend almost as much time doing administrative things as you spend doing advocate things. Your billable hours – vs – your non-billable hours are fairly close to each other. That means that in a 40 hour week you spend maybe 20 -25 hours doing work you get paid for.
Now say you charge $125/hour (and I’m not saying that’s what anyone should charge, but it’s a good, round, number for doing this math) – in a week you’ll make $3,125 – times 50 weeks in a year = $156,000+? for that year. No one can deny that making that much money would be great! Even after you take out expenses, you’ll still do quite well.
You may be able to further monetize your work and eek out some more income – raise your rates, charge for an outstanding weekly newsletter, get paid for speaking… bottom line…. Once you are up and running and have a steady clientele, you should be able to do quite well with a one-person practice – that one person being YOU – IF your goal was to be the person who does the advocate work yourself.
Now let’s look at those retired executives and their “go big” approach.
Going big – or scaling – creates a major shift in how the work is done. You, as the business owner, will bring in others to do the actual work with clients while you lead the orchestra to coordinate the work they do. At first, you may bring in a handful of independent contractors, let them do the work while you do the billing, and it will add some administrative time to your week. Now instead of working 20-25 hours with clients, you may work only 15-20 – which reduces your billable hours (and income), but which you will (hopefully) make up in income because you’re making some money from the others who are working with your clients.
The more contractors (and eventually employees) you have working for you and your clients, the more time you’ll spend on administrative tasks, and the fewer billable hours you’ll work yourself. You can grow your business – “go big!” – as big as you want it to be… You will most definitely bring more money into your enterprise. But you’ll need many more people working in it to end up with that same $156,000 – net – by the time you’ve paid all those other people and their expenses.
So let’s go back to that statement, “The answer lies within your own goals.”
- When you started your practice did you do it so you could work with clients yourself?
- Or did you do it so you could run and grow a big enterprise where others did the core advocacy work?
I would say that easily, 98% of the people who join the Alliance as PACE members do so because they want to do the advocacy work themselves.
And as you can see from my math, the answer for most advocates as they get involved in establishing a practice, should not automatically be an assumption that the bigger the business the more successful they will be or the more money they will make…
So let’s go back to Bernice and her question….
The answer for her is that she needs to think through her own goals. Does she want to build a large enterprise and conduct the orchestra of other people doing the work> If so, then by all means, she can look at ways of doing that, build them into her business plan, submit it to the competition, and cross her fingers that it stands up against all the others who will submit their plans, too.
But if she wants to be doing the advocacy work herself then “going big” may not be the right answer for her, no matter what those business execs / mentors / judges tell her she needs to do.
Is it the right answer for you?
(Find more on this topic in The Health Advocate’s Start and Grow Your Own Practice Handbook –
how to figure out what to charge, and how to grow your practice, too.)
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