“What you measure, you can improve.” —Tracy Dowdy, CVPM
Yes, I just quoted myself in my own blog post. Well, kind of… there are a number of similar quotes out there in the business world. And, these quotes are said so often because they are true. If you truly know where your business stands, you can take steps to improve where improvement is needed. If you don’t know there’s a problem, how do you even begin to address it?
To have the complete picture of where your business stands, you must monitor key performance indicators (KPI) regularly. A key performance indicator is a quantifiable measure used to evaluate success in meeting objectives for performance. But, how do you know which KPIs to track? Before you can choose the metrics you want to measure, you need to determine your practice’s goals. Do you want to increase revenue? Trim overhead expenses? Bring in new active clients? Based on your practice goals, you can choose the KPIs that are most useful for you to monitor.
That being said, there are some KPIs that every veterinary practice should track, regardless of their goals.
Top 10 KPIs every veterinary practice should monitor
- Total practice revenue
- Revenue centers as a percent of total revenue
- Expenses as a percent of total revenue
- Total practice transactions
- Practice average transaction charge
- Total active clients
- New clients
- Client and patient visitation ratios
- Doctor and staff production
- Staff/doctor ratio and operational productivity
These KPIs are like your practice’s pulse rate and blood pressure—they are tangible signals that help you make important decisions regarding fees, workflow efficiency, and the services you offer your clients. By measuring them and comparing them to other practices similar to yours throughout the country (check out Financial and Productivity Pulsepoints, 10th Edition, from AAHA Press), you’ll be able to identify ideal targets for revenue, expenses, and profit margins.
Many practice owners run and hide from data measuring because they think it’s too time consuming or complicated, or they don’t understand the various numbers. Remember: Keep it simple. Key performance indicators should be evaluated monthly and quarterly, and you can choose the KPIs that apply to the goals you want to meet as a practice.
To learn more about how to effectively manage your practice with metrics, join the waiting list for my Relationship Centered Practice Academy.