As with all industries, tracking KPIs (Key Performance Indicators) is vital to accurately gauge the health of your veterinary practice. Here are 7 KPIs your practice should be tracking:
Every business wants to know the amount of revenue they bring in and vet practices are no different. This KPI is central to creating other KPIs, so it’s an important one to follow.
It is important to track your revenues received by source rather than in total. This is the foundation of comparing expenses to revenues. Knowing whether your revenue is generated from professional services, an online retail store, boarding, or renting space to a groomer can provide insight into the quality of revenues.
This metric is especially relevant for non-owner veterinarians. For most practices, veterinarians typically produce 4.5-5x their wages. This is true regardless of experience level. For example, if a DVM is paid $100,000 in salary, you’d expect to see their gross charges, before adjustments, to be at least $450,000 - $500,000 annually.
Practices can skew higher or lower depending on the veterinarian's specialty certifications and whether the practice is small animal, large animal, or blended.
Every company has expenses as part of conducting business. The ultimate goal is to keep costs down while keeping revenue high. By monitoring this KPI, you will be able to see your total expenses and determine if there are areas you can optimize to keep expenses to a minimum.
You may want to break this down into different categories to get a more granular look. For example, how much labor cost goes into each transaction? While you want this number to be low, you don’t want to sacrifice good service by not having enough staff to handle clients. What about the cost of supplies? If supply costs appear to be high, are there other vendors you could buy from at a reduced price?
In most cases, a transaction results in revenue. Do you track how many transactions you have each month? Tracking this KPI will give you a barometer of how your practice is fairing financially.
Even if you have a good number of transactions, are you still turning a profit? If your average transaction charge is low, it takes more transactions to meet your financial goals. In this situation, look for ways to upsell services to clients or look for new services or products your practice can offer. Look at your competitors and listen to your customers to see if there are additional ways to generate revenue.
How many of your clients bring in their pets on a regular basis? Monitoring this KPI will help you predict future income and determine if you are projected to bring in enough income to be profitable.
If you see your numbers dropping, create a process for sending appointment reminders to clients at certain intervals prior to a client’s appointment (e.g., say 3 months, 1 month, and one week. You may be surprised how many owners forget about yearly check-ups until they get reminders from postcards, emails, or texts.
Are you bringing in enough new clients each month? It’s inevitable that customers will come and go. Know what your customer capacity is so you can ensure you are maintaining a customer base for profitability.
If you don’t already have one, make sure you have a website. An online presence is essential for potential clients to find your practice and to learn more about your services, products, and the veterinarians themselves. Showcase not only your services but also any community involvement or volunteer work done by your vets. These last items will endear potential clients and show you care about the community you work in.
While the KPIs above are the more obvious ones to track, there may be others not listed here that you want to set up for your practice. Some of these are simple to set up and track while others may require the assistance of an experienced professional.
SVA’s veterinary industry experts have experience helping practices develop, set up, and track various KPIs. If your practice is interested in learning more about KPIs and how they can help your practice grow, please use the button below to contact one of our professionals.