Do You Know Your Numbers? (Ep.181)

Do You Know Your Numbers?

So, the big question is, when you first go into solo practice, is “do you know your numbers?” 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. And how is that even possible? Well, it happens when you don’t know your numbers.

Now 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 practice that. Fell by the wayside. Now it’s essential that you grasp the question of, do you know your numbers. So, you can pinpoint problems before they get out of hand, and you can more easily plan for the future.

But you may find financial information intimidating. So maybe you are trusting it to your accountant and bookkeeper, but think about how much peace of mind you would. If you knew your numbers were in good shape and your practice was strong and healthy, because numbers help identify where your practice is leaking money.

Now, when you run regular financial reports, you see how much you’re spending on certain expenses and you 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 question if that’s money well spent or money down the drain.

You would also know which services are making you the most money. Now, you can measure the profit margins of each procedure to know which is more profitable and where the weaknesses are in the ones with the lower margins that. You can make adjustments with the expenses and fees for that procedure to decide if it’s worth focusing on, and you would have a clear understanding of how much your practice needs to earn to meet your annual goals, which is pivotal to the question of, do you know your numbers.

Now, when you understand how much revenue you need to bring in to make a profit, it helps. Establish goals. You will understand what revenue level your practice needs to achieve to break even. Now, here’s the best part. When you keep your numbers in check, it reduces your expenses, thereby adding more profit and more profit means more money in your pocket.

Business is all about the numbers (do you know your numbers?) and your numbers are telling you a story. So, these four numbers should be measured and reviewed regularly since they are the foundation of a cosmetic practice. Now, here’s number one, lead generation. 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’re going to waste lots of money on things that are generating the wrong kinds of leads. Or potentially worse, you’ll abandon a lead generation tactic that actually is working, so you want to leave it alone. Now of course this means that you must be tracking which 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 just saying, here’s number two, percentage of leads convert, converted. Do you know what percentage of your leads actually turn into cash paying patients? This is why the question of, do you know your numbers, is so important.

Now the biggest resource killer of all practices is the chasing of leads that are not qualified, not educated about you, and they’re not ready to appreciate the unique value you have to offer. So, when you start to measure this and discover how low your conversion rates actually might be from initial phone call to a patient saying yes.

You want to fix it, it’s too painful. Otherwise, when you see how much money you are losing, when callers don’t book appointments and consults, don’t book paid procedures. Now, here’s number three, 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. A key aspect to the question of, “do you know your numbers?”

And then go to work on lowering that cost while creating more accurate budget forecasts. So, look at all of your marketing and 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.

Spending decisions. And then lastly, number four, average value of a patient. It’s generally much easier to increase your revenues through additional sales to existing patients than to go out and find new ones. Now you can do this one of two ways. You can increase the perceived value of your offerings and raise your fees.

Or add on other complimentary services and or products your existing patients also might want. So, as you can see, there’s no rocket science with this list (do you know your numbers?), but are you really measuring these four significant numbers when it comes to growing your practice? Because the bottom line here is that you deserve better and so does your practice.

When you grasp the question of “do you know your numbers?”, you make better decisions, avoid unnecessary surprises, and have peace of mind knowing you’re on track to reach your goals.

Everybody that’s going to wrap it up for us today, a Beauty and the Biz and this episode on the do you know your numbers.

And if you have any questions or feedback for me, you can go ahead and leave them at my website at www.CatherineMaley.com, or you can certainly DM me on Instagram @CatherineMaleyMBA.

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And we will talk to you again soon. Take care.

-End transcript for the “Do You Know Your Numbers?”