This is a follow up story for Space To Be You. If you're interested in reading how they got started, published over 1 year ago, check it out here.
Hello again! Remind us who you are and what business you started.
Space To Be You is a mental health clinic in London, England that was started two years ago in the middle of the Covid lockdowns, just as therapists were only seeing clients online.
Here’s our original story showing before and after pictures of our space.
Having weathered lockdowns and entered the post-Covid world, we've recently signed a five-year lease to stay on the same premises and are on track to be averaging $12,000 in monthly revenue this year.
Tell us about what you’ve been up to. Has the business been growing?
We’ve had plenty of ups and downs. The hardest was the third UK lockdown in early 2021 which we knew might happen but hoped wasn’t going to happen.
While we were legally allowed to be open, we had no new therapists join for several months and our existing therapists weren’t using the space to see their clients. The place was like a ghost town, our cash was dwindling, rent was due and we were close to having to fund the business from our credit cards.
Fortunately, we managed to get a rent reduction from the landlord (it’s always worth asking as landlords generally don’t want bankrupt tenants) and a six-month freeze on our business loan payments (again, if you don’t ask, you don’t get it!).
Having come out of the other side of that, the biggest milestone was the cash flow break-even early last year. While we still have a start-up loan to pay off, at least our revenue has covered our expenses since then.
Since then we’ve gone from strength to strength and have new therapists joining every month. Some naturally leave which is frustrating, but every business must accept churn. Our advice is to always ask why customers are leaving you. Luckily for us, it has almost always been personal circumstances. But it’s always a great opportunity to gather feedback and make your business better.
In terms of marketing, we have tried paid Facebook ads, Google PPC, and Bing PPC, but our current strategy is to focus on SEO by writing regular articles on the site and building links where possible.
We also think it’s important that whatever sites are on page one when people are searching for your product, you should try to get traffic from those sites (assuming they aren’t competitors). In our case that is directories that list therapy rooms for rent, which is another source of leads at a low monthly cost to us.
After we receive inquiries from our website or directory sites we then invite therapists for a viewing of the space. We feel it’s really important to show off the benefits of the local market in terms of demographics of potential clients (of therapists), what our competitors are offering (without being negative), what our USPs are, and explaining that we offer a sense of community for those wanting to join us.
On top of that, we try to be genuine and transparent as we want to build relationships with our paying therapists. We do follow up after viewings, but we try to take a hands-off approach rather than being too pushy.
We also regularly ask our customers if we could be doing better. You don’t want to leave it until someone complains as there are probably several others not saying anything.
Lastly, each month we actively do several things to improve the business. Sometimes that doesn’t cost anything. Just staying in touch and being pleasant counts for a lot.
What have been your biggest challenges in the last year?
The biggest challenge was negotiating a new five-year lease with our landlord. Unfortunately, that started in mid-2022 right when inflation was in the daily headlines and energy prices were through the roof in the UK.
Of course, our landlord knew this and wanted to increase our rent, but they were also facing higher energy bills. We gathered as much information as we could about the commercial property market in London so that we were in the best position to negotiate. We then presented this data to the landlord which did help them understand the local market.
After a few weeks of back and forward, we managed to settle for something that both parties were comfortable with. I wouldn’t say we were thrilled with the eventual increase, but our research did help with the negotiation. As the saying goes, there’s a reason the word landlord had “lord” in it and the tenant has “ant”. The power is normally pretty lopsided towards the landlord so make sure you fight your corner.
What have been your biggest lessons learned in the last year?
Occupancy and pricing have been something we’ve been learning about, although I don’t think we’ve necessarily solved it.
For example, the clinic can get very busy on certain days. This causes a problem for therapists needing to book sessions for their clients. In contrast, mornings are often quiet so we would love to be able to incentivize therapists to use rooms at quieter times. Ideally, we would have some kind of demand-based pricing, but that isn’t practical.
It’s always a great opportunity to gather feedback and make your business better.
Inflation is also running high which has increased our costs so we would like to put our prices up, but we don’t want to lose customers, so that’s a problem we need to resolve soon.
We plan to use these two factors and change our pricing to spread occupancy more evenly while alleviating some of the inflationary cost increases.
What’s in the plans for the upcoming year, and the next 5 years?
We would love to open another clinic, but we’re also conscious of time pressures in our personal lives. We both have significant work and family commitments so we don’t want to take on more than we can handle.
As we’ve just signed a five-year lease, our five-year plan is to pay down the company debt, optimize our room occupancy levels, increase the number of referrals we generate for our therapists, and ultimately put us on a sustainable path of growth.
Within that same five-year horizon we would also expect to have decided on expanding to another clinic, most probably somewhere in north or east London where demand is high.
What’s the best thing you read in the last year?
Bryan: While not relevant to the average non-billionaire running a business, the best book I read last year was Elon Musk by Ashlee Vance. The biggest lesson I learned from the book is simplifying things and stripping problems down to first principles.
Izabela: A book called No Bad Parts by Richard Swartz - As a practitioner of the Internal Family Systems (IFS) model of psychotherapy, this book is an incredible introduction to this way of understanding the human mind. It’s great for therapists and laypersons alike.
Advice for other entrepreneurs who might be struggling to grow their businesses?
The thing that helps us stay focused on growing the business is to make charts!
We track the usual KPIs such as revenue per month, profit per month, new signs up per month, customer churn, growth forecasts, and so on. We run a relatively straightforward business so each month we chart this to stay focused on the core metrics. If they’re trending in the right direction it’s a great feeling and gives you motivation to do more.
But equally important, if they start trending in the wrong direction, it helps you understand what to fix and how that might be impacting your bottom line and sometimes your very survival.
As Peter Drucker used to say: “what gets measured gets managed”. Keep it simple and don’t make it a chore though.
Where can we go to learn more?
To learn more about us, please visit our website.
If you have any questions or comments, drop a comment below!
Hey! 👋 I'm Pat Walls, the founder of Starter Story.
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