When you first go into solo plastic surgery practice, you have one simple goal and that is to bring in revenues!
But a lot of surgeons are surprised to learn that you can bring in a lot of revenues without actually turning a profit. How is that possible?
It happens when you don’t know your numbers.
Maybe you’re making decisions based on bad information.
Maybe there was a problem that you didn’t catch in time.
Or maybe you were so focused on running your plastic surgery practice that the numbers fell by the wayside.
Top 4 Numbers You Need to Know to Run a Successful Plastic Surgery Practice
It’s essential that you “know your numbers,” so you can pinpoint problems, plan for the future, and find all of those little ways to improve.
But you may find financial information intimidating so maybe you are trusting it to your accountant and bookkeeper.
But have you considered how much better you could make your practice if you know your numbers better?
Numbers can help identify where your business is leaking money
When you run regular financial reports you will see how much you are spending on certain expenses and know to question the expenses when they appear higher than what you planned. For example, you may notice how high your advertising expenses are, and once you’ve identified that, you can monitor those expenses.
You would know which services are making you the most money
You can measure the profit margins on each procedure and know which is more profitable and where the weaknesses are in the ones with the lower margins. Set expected margins and make adjustments with the required expenses or price to meet your goals. You will know what price you need to charge to meet your expected profits.
You would have a clear understanding of how much your practice needs to earn to meet your annual goals
When you understand how much revenue you need to bring in to make a profit, it helps with establishing goals. You will understand what revenue level your practice needs to achieve to breakeven, and you will know at the point you have achieved your breakeven for the year.
Here’s the best part … when you keep your numbers in check, it reduces your expenses thereby adding more profit to the net income. And more profit means more money in your pocket.
Business is all about numbers and your numbers are telling you a story.
These 4 numbers should be measured and reviewed regularly since they are the foundation of a cosmetic practice. And, solutions to better these numbers are also included:
Where do the best leads come from? How many do you need to generate and what actually generates them? If you don’t know this, it’s likely you will waste lots of money on things that are generating the wrong kinds of leads or potentially worse, abandoned a lead generation tactic that’s actually working so leave it alone. Of course, this means that you must be tracking what leads convert to procedures and which patients are most profitable. By the way, it’s much harder to increase the number of leads significantly and much easier to double or triple your lead conversion number once you start paying attention to it.
Percentage of leads converted
Do you know what percentage of your leads actually turn into cash paying patients?
The biggest resource killer of all practices is the chasing of leads that are not qualified, not educated about you, and not ready to appreciate the unique value you have to offer. When you start to measure this and discover how low your conversion rates actually are from initial phone call to a patient saying yes, you’ll want to fix it. It’s too painful otherwise when you see how much money you are losing.
Cost per patient acquisition
Every new cosmetic patient comes with a cost. By measuring that cost with some sort of value to your practice over time, you have a metric that can determine what you can actually afford to spend to acquire patients and go to work on lowering that cost while creating more accurate budget forecasts. Look at all of your marketing/advertising expenses and compare it to your new patient revenues for that year. Do those numbers make sense? Through careful lead analysis, you can cut the cost per lead greatly by making better lead spending decisions.
Average dollar transaction per patient
It’s generally much easier to increase your revenues through additional sales to existing patients than to go out and find new ones. You can do this one of two ways: increase the perceived value of your offerings and raise your prices or add on other complimentary services and/or products your existing patients want.
As you can see, there’s no rocket science with this list, but are you really measuring these four significant numbers when it comes to growing your practice?
The bottom line here is that you deserve better, and so does your practice. When you know your business numbers, you make better decisions, avoid unnecessary surprises, and have peace of mind knowing you’re on track to reaching your goals.