By Terri Ross
Whether you are a plastic surgeon or a manager running a medical aesthetic practice, to get a true grasp on your practice’s overall financial health—performance, people, productivity, revenue, profit, equipment, expenses, etc.—taking a practice assessment is vital. It is one of the most important steps you can take to recession-proof your practice.
Not only will it identify areas of strengths within your practice, but it also highlights areas of opportunity for growth to improve efficiency and profitability. Remember: Being busy does not always mean being profitable. I can’t tell you how many times I’ve spoken with clients on the phone or at conferences who’ve told me they are so busy, yet they want to know:
- “Why are we not growing as fast or generating as much revenue as we would like to?”
- “How come our schedules are not full?”
- “What reports should we be running?”
- “Why isn’t our website generating more leads?”
- “Why are our conversions low when we are getting leads?”
- “What should our revenue per hour be?”
- “How do we know what procedures are the most profitable?”
- “How do I pay my team?”
- “What equipment should I buy?”
As a result of these repeated questions, my team has created a comprehensive practice assessment tool to analyze your business from the ground up.
You Can’t Track What You Don’t Measure
You must know your numbers. Why? Because data doesn’t lie. It is factual and not based on emotion. With an uncertain economy and post-COVID protocols still in place in some areas, it is more important than ever to analyze your data and know your numbers. That way, you can streamline operations and focus on the services that have the highest return on investment, or ROI.
So, let’s address these following questions:
- What is a Practice Assessment and why should you perform one?
- What data should you collect to get an authentic look at your practice?
- How can you create change via concrete action steps?
A ‘Practice Assessment’ Deep Dive
A comprehensive Practice Assessment encompasses a series of questions that helps you identify the gaps in your practice, allows you to course-correct them, and then helps you make the necessary changes right away.
Think about it: You can’t make an accurate diagnosis without the proper information. Just as you would never make a medical diagnosis without a set of diagnostic parameters or tests, you can’t diagnose what’s working and what’s not in your practice without taking what I like to call the “Ultimate X-ray.” A Practice Assessment allows you to take a deep dive and really evaluate your business as well as uncover missing revenue and growth opportunities, so you can pivot and make informed decisions on what to change.
You must focus on the whole wheel, not individual spokes. A Practice Assessment is a tool that asks probing questions and requires you to provide details about your business. You’ll want to evaluate every area of your practice to get the full picture, not just a piece. After all, a wheel does not turn properly unless all the spokes are in good shape.
Before you can accurately find the gaps in your practice and identify areas to improve efficiency, productivity, and profitability, you must have data to analyze.
What Data You Need to Collect
You’ll want to gather what you can from your Practice Management Software, pull out your Profit & Loss statements, and collect any marketing-related information/data you have access to. (Note: Our current APX Platform clients can extrapolate the data they need from our financial calculators and analytics dashboard and translate it into actionable insights within the platform.)
For those of you who don’t yet have APX Platform, here is some key information you’ll want to collect and evaluate:
- Revenue sources (previous year and current year, including retail) and goals
- Facility and overhead costs
- Services offered and profitability of each procedure/treatment
- Equipment
- Strengths and weaknesses
- Patient retention data
- Lead-generation sources and follow-up conversion data
- Consultations and conversion rates
- Operations
- Marketing
- Website and SEO
- Information technology
- Human resources, staffing, and compensation
Creating Change
Once you evaluate all your data points, you must translate your results into concrete action steps. Identify your areas of opportunity and create a step-by-step plan and share it with your entire team so everyone understands and has buy-in. Make sure to include reasonable “by-when” dates and ensure each team member has goals or milestones to hit. Remember: Action creates energy and movement. What doesn’t create change? Information without implementation.
Completing a Practice Assessment can help you to:
- Analyze your cash flow.
- Determine your revenue per hour as a business, by provider and by service category, and compare it to industry benchmarks.
- Know what treatments yield a high or low ROI .
- Evaluate your conversion metrics. They should be 70% or higher.
- Put call tracking into place and evaluate your phone conversions so you don’t lose thousands of dollars.
- Streamline your consultation process, build long-term treatment plans, and create follow-up protocols.
- Understand your cost of goods
- Align your compensation plan with the company’s goals.
- Make sure your payroll is 30% or less of your operating costs and, if not, where to make cuts.
- Channel your marketing dollars in the areas that are most important.
- Optimize and ensure your website is converting leads.
- Implement the proper standard operating procedures, or SOPs, and job descriptions so that you are legally compliant.
While this may seem a bit overwhelming, the APX Platform team and I are here to support you. We have created a free, simple, yet powerful Practice Assessment Tool you can complete right now by clicking here.
After answering a series of questions, you’ll have an opportunity to schedule a follow-up meeting with one of our APX specialists to review your results and discuss how we can help you exponentially grow your business and improve efficiency, productivity, and profitability.
Remember, success starts with: what you think, what you do, and what your results are. If you surround yourself with the right experts, people, experience, and actions, you’ll be surprised by how quickly your practice can become more profitable and efficient—even in uncertain financial times.
Terri Ross is a world-renowned practice management expert, thought leader, and international speaker in the medical aesthetic industry. She is also the founder and co-CEO of APX Platform. Join APX Platform‘s Aesthetic Insights Facebook Group here for ongoing content and interaction with the team, or email them at [email protected].
