Practice Management: Systems Thinking

Bridges The Gap Between Therapist & Entrepreneur
Timothy Feher, RMT
November 30, 2007
By Timothy Feher, RMT
The habits and characteristics of the successful business entrepreneur may be very different from those of a massage therapist, but is there really a difference in the way the two disciplines approach a problem or challenge?

Consider the therapist’s approach to health and wellness. It’s based on holistic strategies. Holistic health prevention and treatment strategies are informed by looking at the bigger picture of the  systems of the body and mind, within the greater systems of their environment.

Similarly, the therapist’s business or practice exists within a bigger system of the marketplace. Without a good understanding of the anatomy of their business, or the extended anatomy of the marketplace, a therapist would soon be without clients, or without sufficient financial resources to continue operating their practice. Massage therapists have to be business entrepreneurs. In fact therapists and business entrepreneurs have much in common. They are both systems thinkers. They understand the connections and interdependence within the complex anatomy of systems.

Here are some simple rules of system theory that I use to help my clients, in the health sector, understand the management systems of their organizations and businesses:Like the human body, the relative system health of a business can be measured and monitored easily.

Like the human body, when something changes in a given system it also will affect other systems in the business.

You can map out the anatomy of your business in just the same way you can map out the anatomy of the human body. You can see the systems at work and learn where you can make preventative or treatment interventions.

There are six key systems which form the anatomy of any business:.
1. Self awareness, mission, vision, and values of the entrepreneur.
2. Business idea and concept, the unique selling proposition, and the business model.
3. Fit, creative positioning, and branding in the chosen market.
4. Creative, niche communications with new customers, customer service and loyalty management.
5. Financial performance measures.
6. Business planning for growth and investment in your business.

These systems are all interdependent. The entrepreneur who is able to understand the anatomy of these systems can design interventions to help them function at full capacity. As we look at an overview of these systems, assess your own awareness and progress for managing each of them in your own business.

System 1: Self-Awareness, Mission, Vision, Values

Successful entrepreneurs have an honest relationship with themselves. They know their fears and what slows them down. They also know what motivates or turns them on.

These two key areas of self-knowledge help entrepreneurs to have honest conversations with themselves. As a result problem solving is easier and distractions are fewer.

The entrepreneurial mind is then able to maintain a sharp focus on the objectives of the business. With honest self-knowledge, entrepreneurs can harness the energy to do battle with fear or inspire action. Entrepreneurs often begin as one person operations. They have to learn to harness extraordinary energy, motivation, and tenacity. Entrepreneurs have and a personal mission to succeed.

Entrepreneurs have a clear picture in mind for what success looks like. It’s a unique vision particular to the entrepreneur’s circumstances and business concept. Vision serves as your road to the future. The more foggy the vision, the more likely you are to get lost along the way.

Values are at the heart of your journey. Your beliefs, and the way you conduct yourself and your business will have a profound affect on your success, your customers, your community and the marketplace. Values are a common link in this system. Linking your values and ethics to your business mission can offer powerful benefits.

System 2:The Business Concept, Unique Selling Proposition, Business Model
To compete in a crowded marketplace you need a worthy business concept which not only meets the needs of consumers, but is able to differentiate your business from others.

It is the unique selling features of the business that make the business concept special. Entrepreneurs exploit these unique features and enhance their presence and value to consumers.

Entrepreneurs understand that a good business idea means nothing if it cannot compete effectively for the attention of customers in the marketplace. Successful entrepreneurs know also know that a good business idea means nothing if it is not built around the right business model designed to make profit.
The business model is the heart of your business. It can shut down the whole system if it has not been designed or calibrated correctly.

The business model is the system of your sales volume, price point, service capacity, and cost per client. These variables are extremely sensitive to each other and will either leave you in the red or the black at the end of the month. For example if your business has too much capacity and not enough sales, your cost per service will be too high.

As you design your business model and monitor its performance you will see how a change in each variable will produce different financial results.

System 3:The Fit, Creative Positioning, randing In The Marketplace
Successful entrepreneurs do their homework. They have done the market research in the communities where they have set up shop.

They have assessed the need for their business, and have estimated the size of the customer base, while factoring in the competition.

Entrepreneurs are tireless sales people – always looking for fresh and compelling ways to position their businesses in the marketplace. They often set  trends or ride the wave of current trends which are popular with consumers.

Entrepreneurs understand the power of the brand and the importance of building the brand. The brand of your business is more than a name or a logo. It is the loyal relationship you have with your customers. It is customer satisfaction and reputation for quality.

When your brand is really working it offers something that people want to belong to, or be associated with.

Brand is your creative presence in the marketplace; the way your business makes people think and feel. Master the art of positioning your business and
your brand and people will beat a path to your door.

System 4:Creative, Niche Communications With New Customers, Customer Service And Loyalty Management
The entrepreneur knows all to well the struggle to find new customers. The marketplace is a noisy and cluttered environment where everyone competes for attention.

To be heard above the din, you need to find creative ways to communicate to new customers using language, imagery, and incentives that grab their attention or even capture their imagination.

Small businesses have very limited resources. Rather than expensive mass advertising, learn strategies for “niche” marketing to find the right audience for your business.

By partnering with other businesses which offer products or services to a similar kind of customer, you can design cross promotional efforts and share the costs.

Successful businesses have learned the economic importance of creatively maintaining the loyalty of customers, and “upselling” them to other products and services.

System 5:Financial Performance Measures
Money may not be the prime objective of your therapeutic practice but it will always be the primary means of your business. Here are some ways to measure the financial system health in your business.
  • The Budget. Your business model is based on revenue and expenditure projections. Your monthly or annual budget incorporates itemizes these projections. You’ll want to make it a discipline to follow your monthly and annual budget.
  • Total customers and transactions. Your business model and budget have set a target for how many new and returning customers you will need to make the business model work. You’ll want to monitor this weekly and monthly, and step up your marketing or loyalty initiatives when the numbers are short of your plan.
  • Cash Flow. This is your plan for ensuring available cash on hand during any given week or month. You’ll want to learn your cash cycles and plan to pay your bills and make purchases in certain time sequences so that you always have enough cash to keep your business going.
  • Profit/Loss. Your enterprise is about making money. You’ll want to design a simple spreadsheet so that you can determine if you are making profit (revenues exceeding expenditures).
Measure the profitability of different parts of your business to determine where you get the best bang for your buck.

System 6: Business Planning For Growth And Investment
Your chances of success are much greater if you take the time to draft a detailed business plan. The business plan is your tool to write down how your business operates within each of the systems described above.

The Business Plan shows how you will achieve financial growth. By acquiring more customers, revenue and brand equity in the marketplace, you are able to invest further in the resources and capacity of your business.

By tending to the health of these six business systems, massage therapists use their system thinking skills to become successful business entrepreneurs.

About Timothy Feher
Timothy Feher is an organizational and business development consultant. He operates M2V Strategic Consulting and Communications in Ottawa and Toronto. He is also a Professor on the Part Time Faculty at Algonquin College where he teaches Entrepreneurship to 3rd year massage therapy students.


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