May 16, 2022
3 KPIs to Track at Your Dental Practice
It’s easy to get wrapped up in the day-to-day responsibilities of running your dental practice, but unless you’re taking stock of the key performance indicators (KPIs) driving your business, you’re likely missing opportunities to grow and diversify. While there are many ways to measure the success of your dental practice that dictate which business decisions to make, these quantitative results will help you improve profitability and increase efficiency.
In addition to knowing what your average patient looks like, it’s important to know how they found your dental practice in the first place. Knowing if they are referrals or came from social media advertising or organic SEO will help you allocate your marketing budget to the right source and medium. How much are you spending to acquire each new patient?
Simple math will then tell you how much your patients are worth each year based on how many visits to your dental practice they make. Finding the average number of visits among all patients will help determine how you compare with the rest of the industry, as well as unearth any underlying problems at your dental practice. You’ll also want to track how much the average patient is spending and the repeat visit rate to see if your hourly rate needs to be adjusted.
To figure out your working capital, you can subtract your practice’s debts and liabilities from your assets to allow insight into what liquidity you have to grow your business and increase profitability. For equity, you’ll want to compare your practice’s assets divided by your liabilities, as well as determine your practice’s effectiveness to convert assets to profits. Likewise, the accounts receivable turnover ratio quantifies how much payment you’re receiving within a certain period of time, and the accounts payable turnover measures the rate your practice pays off its debts. Lastly, you’ll also want to calculate the ratio of full-time employees to part-time employees, freelancers and contractors.
Above all, it’s important to know where you stand with your current patients. You could send out a simple survey via email to rate how likely they are to recommend your dental practice, ask for a Google review or any other way to get your finger on the pulse of your client base. After all, patient care is the reason you got into dentistry in the first place, and your patients are your best salespeople!
Contact the experts at Professional Transition Strategies to keep your dental practice on top of its game.