Creating PASSIVE INCOME in your health practice – is it really possible?
If you have ever been to a wealth creation seminar, you will have no doubt heard the term “passive income” bandied around, and yet rarely do we ever actually meet someone who actually has it, let alone hearing about it for a natural health practitioner!
Over the years we have developed a number of passive income strategies and “recurring income” sources specifically applicable to a small natural therapies practice, and I’ll outline one of the most effective of them here.
First up, lets define a few terms so we know what we are really talking about:
What is passive income?
Passive income is income produced with no direct exchange of your work or time.
What is continuity income?
Monthly or weekly recurring income, usually billed and collected via direct debit.
What is Pre-sold income?
Income received from services paid for in advance, usually in bulk.
What is Leveraged income?
Servicing or selling one to one becomes one to many – same time investment, higher return, usually via technology and reproduction of information
As a business coach, my goal for my clients is to build passive or continuity income equal to or exceeding monthly outgoings (including owner’s salary). This situation alleviates the constant nagging worry of “will there be enough money this week” and puts the business owner into a different money mindset.
So what does passive or continuity income look like in a health practice? How does this apply when you are in a fee for service business?
Here’s one solution that a number of my clients have put into place to great effect:
The VIP Program
This works on the principle that roughly 20% of your client base would prefer a premium option, if only it was available to them. So, why not offer it to them?
The VIP option is normally paid monthly by direct debit, applies to services like monthly massages, beauty treatments, chiropractic and even preventative Health treatments such as acupuncture or naturopathy.
Benefits to the client can include priority bookings, pre-booked or guaranteed bookings, a discount for bulk booking, additional services “thrown in” as bonuses, plus free products, special event invitations or additional access to you and your time (eg. Free follow up consults/calls)
VIP programs should be exclusive by nature, ie. Only a certain number of people can join, and should be offered only to your “A class” clients.
Clients are asked to pay either in advance or via the convenience of direct debit, and are usually then given the option to keep the direct debit rolling over indefinitely on the “grandfather rate”, and therefore avoid any fee increases down the track.
The real benefit for the practitioner in having a VIP list such as this is the sense of developing a closed client list, and being pre-booked and therefore always in demand. It’s great for the confidence and a real boost to the headspace every week to know that your bills are covered, your clients booked in, and your practice is thriving!