Running a practice is no different to running a business. Remember, your practice is a business. Or at least it will be. This short read will help you account for the basic costs that come along with it.
The Two Types of Costs You Need to Account For
We can talk about the different types of costs all day. Or we can break down the most important ones for you here. We’re choosing the latter. Here’s what you need to know—without the fluff.
1. Fixed Costs
Your fixed costs are pretty much the only reliable thing in business. But don’t let the term ‘fixed’ confuse you. It doesn’t necessarily mean that the cost stays the same. Just because your monthly space rental was $500 this year doesn’t mean it’ll be $500 next year.
A fixed cost is just an expense that you can foresee. There should be no surprises here. If you signed a 2-year lease with a 10% annual increase, then you know you need to budget for it every month for the next 2 years, right?
For an integrative healing arts practitioner (that’s you!), the most common fixed costs would be space rental, liability insurance, website maintenance, and any legal requirements.
2. Variable Costs
These are the ones you’ve got to watch out for. As the name implies, it can be difficult to budget for variable costs. That’s because they fluctuate depending on the number of clients you see—and it can be hard to forecast increases and drops in service demand.
For example, a massage therapist would need to order more massage oil when there’s a spike in demand. Once you start expanding your practice, your new receptionist might have to work extra hours—and that means more money going towards hourly wages..
Remember, the numbers will be different depending on your practice and location. But don’t let them get you down. In fact, there’s no better way to gear up for success than breaking down your expenses, and, more importantly, building a budget.
Need more useful tools and strategies? The Institute of Holistic Integrative Studies’ Business Academy has the answers you’re looking for.