Key Performance Indicators - What three KPIs you should be tracking to make better business decisions
Objectives: Key Performance Indictors (KPI’s) provide us with valuable information to make better, more informed business decisions. These can be used to establish revenue targets or goals, evaluate provider performance, treatment profitability and overall clinic profitability or productivity. Although there are multiple KPIs to measure within medical aesthetics, the top three that every owner should track monthly and yearly is revenue per provider, revenue per patient and profit per treatment. These three are the most impactful KPIs to track to measure performance, efficiency, and profitability.
Introduction: Understanding how to effectively run a medical aesthetic practice can be overwhelming when you are not equipped with the tools, resources, and information to be successful. Although many aesthetic owners are experts in achieving optimal outcomes, most have little or no experience in how to operate a successful business. Creating key areas of focus can simplify the how and where owners can impact their clinic’s revenue, profitability and/or efficiency. Key performance indicators (KPIs) can be defined as what we measure to understand where to focus our time and attention on within our business.
Materials / method: Revenue per provider
This is the amount of total revenue generated by one provider divided by the number of hours they worked.
Revenue per patient
This is the amount of total revenue generated in a certain period divided by the number of patients seen within the same time period.
Profit per treatment
This is the amount of revenue generated (after expenses) for each treatment or service provide at the clinic. This is determined by adding the treatment expenses and dividing that by the patient cost of the treatment.
Results: Revenue per provider is used to measure how productive your providers are at generating revenue each hour they are working at your clinic. This will allow you to know how much money we are making from each provider. This will also allow you to compare providers to each other to know who is generating the most amount of revenue. Revenue per patient will give you an average patient spend to determine what you may need to improve on with your cost of services, consultation process or staff performance. Profit per treatment will determine the profit each treatment brings in for the clinic.
Conclusion: As a business owner, it is important to have clear and concise understanding of where and how your clinic generates money. This allows you to know how to market your business, support your staff as well as invest time, resources, and energy. Not only do Key performance Indicators (KPIs) allow for business owners to create revenue targets and goals but they also allow for benchmarks and measurements for tracking their business growth and development.