Posted By Administration,
Friday, November 16, 2018
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By Terri Ross, Managing Partner of Lasky Aesthetics
In order to maximize the profitability and success of your office, you need to take an accurate and realistic snapshot of where you are by the numbers.
- Do you know your return-on-investment (ROI) for every procedure and treatment you offer?
- What percent of patient leads do you retain?
Patient retention is directly linked to how well your front office staff listens, engages and responds.
In order to become a top-performing practice, every working part of your office or medical spa—the staff, systems, processes and protocols—must be performing at optimal speed. Be diligent and organized in your record-keeping. Take a quarterly snapshot of your office. If you know where you are, you can make a sustainable plan for future optimization and growth.
HERE ARE THE KEY NUMBERS YOU NEED TO KNOW:
- Start-up costs – Property, building, equipment, technology, staff and marketing all go into start-up costs.
- Payroll – When your business is off the ground, payroll makes up a large part of your bottom line. Know how much you pay your personnel, in wages, taxes/insurance and bonuses throughout the year.
- Equipment – This includes initial cost, maintenance and materials required to run, update and optimize equipment.
- Marketing – Any expense targeted toward attracting new patients falls into this category, from pamphlets, to website development and networking events.
ROI = (Gain – Cost) / Cost
- Procedures – Know how much every procedure costs you to perform, including supplies, time and personnel involved. Your potential gain-per-procedure is based on these expenses.
- Technology – Know how much a piece of new equipment costs to acquire and maintain. You’ll need to include maintenance and supply costs in your calculations of ROI for every piece of equipment in your office.
- Marketing – Knowing your ROI on marketing strategies allows you to quantitatively measure how successful a specific marketing tactic is. Know how your patients found your office and why they return—online marketing, networking at the right events, etc. Read more about how to calculate your marketing ROI in this article from Forbes.
- Website position – Know the numbers behind your website—how many people visit the site per day, what page they go to and stay on, what your bounce rate is, and modify from there.
- Conversion/close rate – How many prospective patients do you “land?” How many are retained as long-term patients?
- No show/cancellation rate – On average, how many patients make an appointment and don’t show? Or cancel in advance?
- New patient rate – The number of new patients you bring in per month, year.
Room Revenue Assumptions
- Number of rooms – Total number of procedure rooms.
- Hours of operation – How many days are you open?
- Average treatment price – Taking an average of all procedures offered, what is your average price?
- Average length of procedure – On average, how long do your procedures take? This includes operating preparation.
- Treatments per day – How many treatments do you complete per day? Are any days busier than others?
- Revenue/hour – Based on the numbers above, what is your average revenue per hour?
- New patients – Set a goal for number of new patients retained per quarter. Using the LAER model I developed, you can train your staff to engage, respond to and retain patients.
- Revenue - Based on where you are, what is your projected revenue? Set your revenue goals and make the necessary changes (processes, protocols, staff) to get there.
- Revenue/hour – To reach your revenue goals, how much do you need to generate per hour? Avg room should do between $600-$1000 per hour.
- Price strategy (vs. competitors) – Based on your current and desired revenue, and keeping competitor pricing in mind, develop an informed and realistic price strategy.
How Does Your Office Look By The Numbers?
Do You Have Attainable Revenue Goals And The Infrastructure, Protocols And Staff In Place To Get You There?
CLICK HERE TO DOWNLOAD THE ASSESSMENT BELOW & COMPLETE TERRI'S 10 POINT CHECK LIST.
Terri Ross is managing partner of Lasky Aesthetics & Laser Center, which she transformed from a $500,000 to a $3.5 million business in the span of three years. She is also the CEO of Terri Ross Consulting, providing high-level practice management consulting services and sales training to a number of high-profile physicians, including world-renowned plastic surgeon, Garth Fisher, MD, who started Extreme Makeover, and world-renowned facial plastic surgeon and host of the TV show Botched, Dr. Paul Nassif. Ross is an advisor for Revance Therapeutics, speaks for many companies, and works with venture capital firms to help start up medical spas. Her experience also spans the corporate world, with more than 16 years working as a sales director for several leading medical device companies, such as Zeltiq, launching Coolsculpting in the United States and Canada; Medicis (now Galderma); EMD Serono; and Johnson & Johnson.